Honda welcomed the US government’s decision to extend loans to US automakers yesterday, but said the problems of the companies highlighted their slow response to soaring gas prices.  “It is totally proper for the US government to help out US automakers,” Honda chief executive Takeo Fukui told reporters in Tokyo, adding that Honda also relies on the same parts makers in the US.

Last month, US President George W. Bush signed a sprawling spending bill that included US$25 billion in subsidized loans to the troubled US automakers.

General Motors Corp, Ford Motor Co and Chrysler had lobbied for the government loans, which will help them develop a broader lineup of fuel-efficient models.

Honda Motor Co, whose models are reputed for good mileage, has avoided some of the major sales battering that US rivals have taken as gasoline prices soared.

“The times have changed,” Fukui said. “Their response was too slow.”

Fukui said Honda benefited by refraining from expanding into the once lucrative pickup truck sector.

“We didn’t dabble in that, and that worked out well for us,” he said at a Tokyo hotel.

Fukui said Honda sales were holding up despite the gloomy outlook for the industry and he foresaw no major revisions to fiscal year sales forecasts.

Tokyo-based Honda has been nimble in adjusting production to boost output of in-demand models, like the Accord, to keep inventory low and respond to changes in consumer tastes.

While Honda is seeing sales fall in some markets, they are gaining or holding up in others including China and India.

Honda posted year-on-year sales growth through August in the US, but reported a 24 percent drop last month as US sales fell below 1 million vehicles.

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A new carmaker has a plan for cheap, environmentally friendly cars to be built all over the country An air-powered car? It may be available sooner than you think at a price tag that will hardly be a budget buster. The vehicle may not run like a speed racer on back road highways, but developer Zero Pollution Motors is betting consumers will be willing to fork over $20,000 for a vehicle that can motor around all day on nothing but air and a splash of salad oil, alcohol or possibly a pint of gasoline. Read the full story

The discovery of excessive levels of the industrial chemical melamine in Chinese eggs has prompted the Hong Kong authorities to expand health tests to include meat products imported from China, a senior official said Sunday.

The move follows the announcement late Saturday that Hong Kong testers had found 4.7 parts per million of melamine in imported eggs produced by a division of China’s Dalian Hanwei Enterprise Group. The legal limit for melamine in foodstuffs in Hong Kong is 2.5 ppm.

Hong Kong Secretary for Food and Health York Chow said the melamine may have come from feed given to the chickens that laid the eggs. “The preliminary opinion experts have given us is that there is a problem with the (chicken) feed,” Chow told reporters Saturday.

The egg results have prompted officials to expand food testing to meat imports from China, Chow told reporters Sunday.

Chow said Hong Kong officials will step up checks of eggs imported from China.

Calls to Dalian Hanwei Enterprise Group, based in the northeastern port city Dalian, Sunday went unanswered.

In an earlier egg-related food safety scare in Hong Kong and China the banned cancer-causing industrial dye, Sudan Red, was used to color egg yolks.

Dow down 400 points as U.S. joins global market swoon on recession fears.

U.S. stocks joined a worldwide selloff at Friday’s open, with the Dow down about 400 points, as a wave of anxiety about a global recession sent investors heading for the exits.

The Dow Jones industrial average (INDU) fell 4.5%. The Standard & Poor’s 500 (SPX) index tumbled 5.2% and the Nasdaq composite (COMP) lost 5.3%.

Stocks followed the lead of plunging markets worldwide, with Japan’s Nikkei index ending down 9.6%. European markets down almost as sharply, with major indexes down 8% in France and Germany and 7% in London.

Markets were down 14% in Moscow when the exchange there suspended trading until Tuesday.

“Today might be the day where everybody throws in the towel,” said Peter Cardillo, chief market economist for Avalon Partners. “People are saying ‘I’ve had it, I can’t take it anymore, I’m selling everything.’”

Markets were so jittery early Friday that the New York Stock Exchange felt it was necessary to post a statement on its blog confirming that trading would open as normal at 9:30 a.m. ET, saying it felt it was necessary to answer widespread rumors that the open would be delayed.

The NYSE also posted updated details of so-called circuit breakers, which would halt trading for certain periods of time if the Dow Jones industrial average falls 1,100 points during the trading day. It said it was posting that information with “the fervent hope we won’t need them.”

Futures trading limits were imposed before 7 a.m. ET, when Dow Jones industrial average futures were down 548 points. The futures for the S&P 500 were down 60 and Nasdaq 100 futures were down 84. Futures measure current index values against the perceived future performance and can indicate how markets open when trading begins in New York.

Economists said that even commodities were selling off, including a $18 drop in gold and a 6% decline in copper, with oil trading below $65 a barrel. The dollar rose against the euro and the British pound, but plunged against the yen.

“It’s across-the-board global liquidation of stocks,” said Art Hogan, chief market strategist at Jefferies & Co.

Hogan cited a 0.5% drop in the United Kingdom’s third-quarter GDP as one key reason for the selloff. That drop was from the previous quarter’s level of economic activity, making it much more severe than the typical measure of U.S GDP, which is reported as an annual rate of growth or decline.

A 0.5% quarter-to-quarter decline works out to nearly roughly a 2% drop in annual GDP.

Andrew Sentance, a member of the Bank of England, told the BBC early Friday that the chance of a severe recession there had increased, and that the central bank would have to adjust interest rates according.

Expectations that the Bank of England and European Central Bank would have to make sharp cuts in interest rates in the weeks and months ahead sent the pound and euro plunging versus the dollar in early trading.

The yen was the strongest of the major currencies, as the Bank of Japan’s rate is already down to 0.5% and thus it has little room for additional cuts.

The gloom followed a positive Thursday for Wall Street. The Dow and S&P 500 both advanced while the Nasdaq slipped. But trading has been volatile lately amid uncertainty about how deep the economic crisis will be and how long it will last.

Stocks to watch Friday included software giant Microsoft (MSFT, Fortune 500), which reported solid quarterly results late Thursday but issued a cautious outlook.

Oil. The Organization of Petroleum Producing Countries, which controls 40% of the world’s oil supply, announced Friday that it would cut production by 1.5 million barrels a day, from its current level of 29 million.

OPEC had intended to raise prices by reducing production. But after the announcement, oil prices dropped $3.60 a barrel to $64.20 in electronic trading.

Housing market. At 10 a.m. ET, the National Association of Realtors will announce the September tally for existing home sales, an important measure in the real estate market. A consensus of estimates from Briefing.com projects an annual sales rate of 4.95 million units, up from last month’s figure of 4.91 million. 

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Japan’s Nikkei fell more than 10 percent before reeling back Thursday, as Asian and Pacific stock markets dropped dramatically a day after Wall Street took a tremendous tumble amid a series of bad news.Hong Kong’s Hang Seng slumped 6.5 percent in early trading, as did as did South Korea’s KOSPI index. Australia’s All Ordinaries index fell nearly 6 percent. The Shanghai Composite fell 3.5 percent. At midday, Japan’s Nikkei was down more than 9 percent.

On Wednesday the Dow Jones fell 733 points, or 7.9 percent, to 8,577, the second largest daily point loss ever, behind the 777-point loss on September 29. The Nasdaq lost 8.5 percent and the S&P nine percent.

The drop on Wall Street came amid the worst U.S. retail sales figures in three years, a surge in UK unemployment and predictions that recessions were unavoidable in the U.S. and Europe.

The FTSE 100 closed the day 7.16 percent down, while the CAC 40 in Paris lost 6.82 percent of its he falls came as EU leaders met in Brussels to hammer out the details of their $2.7 trillion banking bailout. Leaders from the 27-nation European Union were meeting Wednesday and Thursday in the hope further agreement on their approaches will give markets more confidence

Proposals include a guarantee on bank deposits worth up to €100,000 ($136,760).

Britain, Germany, France, the Netherlands, Spain and Austria have already agreed to buy shares in banks and pump huge sums of money into lending markets in an effort to restore confidence and make credit readily available againBefore the meeting, British Prime Minister Gordon Brown said the world had to work together to solve the economic crisis and called for global talks this year to reform the world’s financial system.

He said a global summit could be held in the next few months despite lack of agreement among international leaders.

Brown appealed to the other countries to join Europe’s bailout plan, which he said was key to unfreezing bank lending and softening any economic downturn stemming from the difficulties banks were having.

The U.S. federal government has a similar plan to get capital directly into banks by buying their stock.

U.S. Federal Reserve Chairman Ben Bernanke warned Wednesday the economy will take some time to recover even if the credit markets return to normal soon.

“Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away.” he said.

European Commission head Jose Manuel Barroso has called for supervision of hedge funds and private equity, and action against “short-termism” and “perverse incentives.”

Barroso said some governments still opposed a more coordinated European approach. “I hope that now the spirits are more open to the need for that more coordinated approach.”Leaders of EU nations outside the euro-zone — such as Sweden, Denmark and Poland — are being asked to endorse the banking rescue package.

Oil prices fell to $78 a barrel Wednesday in Asia on concern a massive bank bailout by the U.S. and Europe won’t keep the global economy from slipping into a severe slowdown that would erode crude demand.

Light, sweet crude for November delivery was down 72 cents to $77.91 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell overnight $2.56 to settle at $78.63.

“People are worried that the world economy is heading for recession,” said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney. “The bailout may save the banks, but companies are still laying off workers and demand is going to suffer.”

The U.S. plans to spend as much as $250 billion this year of a $700 billion bailout buying stock in private banks, President George W. Bush said Tuesday. Governments across the globe have pledged more than $3 trillion to prop up ailing banks in a bid to stabilize a credit crisis that began last year in the U.S. sub-prime mortgage market.

Former U.S. Federal Reserve Chairman Paul Volcker said Tuesday the U.S. and Europe face a “considerable recession.”

“The banks might be OK, but the rest of the economy needs help as well,” Rigby said.

Investors are watching for signs of slowing U.S. demand in the weekly oil inventories report to be released Thursday from the U.S. Energy Department’s Energy Information Administration. The petroleum supply report was expected to show that oil stocks rose 3.1 million barrels last week, according to the average of analysts’ estimates in a survey by energy information provider Platts.

The Platts survey also showed that analysts projected gasoline inventories rose 3.1 million barrels and distillates went down 850,000 barrels last week.

Crude stocks have grown as oil installations in the Gulf of Mexico that were shut down by Hurricane Ike last month begin operations again.

“There is some demand destruction in that forecast, but there’s also hang over from the hurricane as refineries come back on line,” Rigby said.

In other Nymex trading, heating oil futures were steady at $2.26 a gallon, while gasoline prices fell 1.23 cents to $1.87 a gallon. Natural gas for November delivery dropped 2.7 cents to $6.70 per 1,000 cubic feet.

In London, November Brent crude rose 78 cents to $73.75 a barrel on the ICE Futures exchange.

Guyana News Today-The US government is to buy stakes in some of the country’s largest banks in an act regarded by many economists as contrary to the principles of free-market capitalism. In an effort to restore confidence in the ailing global financial sector, the US president on Tuesday unveiled a plan to inject $250bn of the $700bn bailout into financial institutions. George Bush also said the US government would temporarily guarantee all non-interest bearing transaction accounts, providing some relief for small businesses. It will also temporarily guarantee most new debt issued by insured banks and that the Federal Reserve would take steps to become the “buyer of last resort for commercial paper”.

“These measures are not intended to take over the free market, but to preserve it,” Bush said.

Executive pay limited

Nine banks have agreed to join the government programme, including Citigroup, Goldman Sachs, Morgan Stanley and Bank of America.

Banks joining the programme will have to agree to limits on executive pay and other benefits, Henry Paulson, the US treasury secretary, said.

Paulson, left, has defended the intervention as a necessary if objectionable action [EPA]

Other banks will have an option to accept the programme, in which the government gets “senior preferred shares” which the treasury says will not give them voting rights.”Today’s actions are not what we ever wanted to do,” Paulson said, delivering his comments alongside Ben Bernanke, the Federal Reserve chairman, and Sheila Blair, the head of the government’s Federal Deposit Insurance Corp.

“But today’s actions are what we must do to restore confidence to our financial system.

“Government owning a stake in any private US company is objectionable to most Americans - me included - yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.

“When financing isn’t available, consumers and businesses shrink their spending, which leads to businesses cutting jobs and even closing up shop.”

Market rallies

John Terret, Al Jazeera’s correspondent in New York, said the changes were “pretty momentus …  the whole landscape is really changing”.

He said the plan “marked a change in strategy for the US bailout” and added there would be “consderably less risk-taking after the government takes a stake in the banks”.

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“Instead of putting all that money into buying the illiquid assets that are held by banks and other companies, they’re going to do what the Europeans have done - and the British as well,” Terret said.”That is, they will inject money directly into the banks by buying up preferred shares and the government will get an interest payment on those preferred shares.”

The Dow Jones industrial average closed about 76 points, or around one per cent, lower at 9,310 - a day after its 936-point jump.

Profit-taking had taking started creeping into the market after the Dow surged more than 400 points at the opening.

Stock markets in Europe, however, saw gains on Tuesday, recovering from severe losses incurred over the past week.

Britain’s FTSE closed 3.2 per cent up, Germany’s DAX rose 2.7 per cent, and France’s CAC added 2.8 per cent.

The stock exchange in Iceland, which is teetering on the edge of bankruptcy after its financial sector crashed, opened on Tuesday with a 76 per cent loss, but the massive drop was due mainly to the removal of three ailing banks nationalised last week by the Icelandic government.

When adjusted to reflect that, the index showed only a 0.5 per cent loss.

Asian stocks

The gains in Europe’s major indices came after Asian stock markets rallied for a second straight day following schemes by Western governments to give cash to ailing banks in an attempt to encourage bank-to-bank lending.

The Japan’s Nikkei index closed 14.15 per cent up on Tuesday, its biggest-ever gain in a single day’s trading.

Banks that get bailout cash will have to agree to limits on executive pay [GALLO/GETTY]

Tuesday’s gains erased most of the losses the Nikkei took on Friday and went some way towards reversing the 24 per cent plunge it has suffered over the course of the week.Hong Kong’s Hang Seng index closed 3.2 per cent higher while Australia’s benchmark S&P/ASX 200 index climbed almost six per cent before paring some gains.

All bank deposits in Hong Kong will be fully guaranteed until 2010, John Tsang, the territory’s financial secretary said on Tuesday.

Australia’s government unveiled a A$10.4bn ($7.3bn) emergency stimulus package on Tuesday to guard the country’s economy from a global recession.

The move to make one-off state payments to low-income earners and pensioners came two days after the government guaranteed all bank deposits for three years.

It also made wholesale funding to Australian banks to protect them from the fallout from the global credit crisis.

‘Virus killed’

Following Europe and Asia’s strong stock market performances Jamie Chisholm, a journalist for the Financial Times, said it appeared that the immediate banking crisis had been stemmed.

“We have killed the virus, but the problem now is that we have to deal with the infection. The infection is the effect that all this has had on Main Street; people who go about their daily lives [and] businesses who make and produce things,” he told Al Jazeera.

“We are going to be faced with at least a downturn, maybe a recession, possibly a technical global recession. Once this market bounce has sorted itself out, the markets will look to that [possibility].”

“This sort of [crisis] has not happened to such a degree in the past - everyone gives the example of the 1930s but this is very different from then.”

Arab stock markets also rose on Tuesday, with emirate Dubai gaining nine per cent at the opening of trade and Abu Dhabi and Oman each gaining six per cent.

The jump in Gulf markets came after the United Arab Emirates announced that it had set aside $19bn for local banks to encourage bank-to-bank lending and stave off a credit freeze.

The funds bring the total amount set aside by the UAE in the last month to prop up banks to $32.6bn.

Government intervention

The markets’ surge follows co-ordinated moves over the weekend by European nations including the UK, France, Germany and Italy, to firm up banking systems.

Walden Bello, a senior analyst and former director of Focus on the Global South, said that a complete overhaul of the global financial system was needed to restore people’s trust in it.

“I think we are talking about drastic overhauling and the reinstitution of capital controls. The lifting of those controls between countries and financial sectors has been one of the causes of this financial mobility that has brought us 100 crises over the past 25 years,” he told Al Jazeera.

“I think we are going to be talking about severe regulation of the banking sector. Among this will be the banning of trading in derivatives, which Warren Buffet [an American investor and businessman] has called a financial means of mass destruction.

“I think we need to bring a whole new social criteria, in terms of lending and financial operations, [which] will mean channelling money into health and things like that.”

Bobby Maxwell kept a close eye on the oil industry for more than 20 years as a government auditor. But he said the federal agency he worked for is now a “cult of corruption” — a claim backed up by a recent government report.

Bobby Maxwell, a long-time auditor of the oil industry, says his former agency is corrupt "top to bottom."

Bobby Maxwell, a long-time auditor of the oil industry, says his former agency is corrupt “top to bottom.”

“I believe the management we were under was showing favoritism to the oil industry,” Maxwell told CNN.

Maxwell is referring to a tiny agency within the Department of the Interior called the Minerals Management Service, which manages the nation’s natural gas, oil and other mineral resources on federal lands.

A report, conducted by the Interior Department’s inspector general and released earlier this month, found that employees at the agency received improper gifts from energy industry officials and engaged with them in illegal drug use and inappropriate sexual relations. It looked at activities at the agency from 2003 through 2006.

Maxwell said the report doesn’t surprise him. The agency, he said, is corrupt “top to bottom.”