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Remember $4 gasoline? Remember $3 gasoline? And now, most of the nation can be asked, remember $2 gasoline?

The average price of gasoline is below $2 a gallon in 46 states, according to a survey compiled for motorist group AAA and reported on its Web site. It is lowest in Missouri, at $1.541 a gallon, followed by Kansas at $1.652.In only 4 states and the District of Columbia does the price remain above $2 a gallon. Two of those states, Alaska and Hawaii, are well above $2 - Alaska the highest at $2.778 and Hawaii next at $2.716.

Also above $2 a gallon: New York, at $2.208; Washington, D.C., at $2.066; and Vermont, at $2.009.

The national average price of regular unleaded gasoline fell 0.8 cent Saturday to $1.827 a gallon, according to a survey compiled for motorist group AAA. The price has fallen for 73 consecutive days, and is the lowest it has been in about four years.

The average price has fallen nearly 56% from the record-high $4.114 set on July 17. It is down 72 cents a gallon in the past month, and more than $1.26 a gallon from a year ago.

Information in the survey is compiled by Oil Price Information Service and is taken from credit card transactions at more than 85,000 filling stations nationwide.

Economy boost for Spain and Italy

Spain and Italy have announced plans worth billions of euros to kick-start their economies.

Italy approved an 80bn euro ($102bn;£66bn) emergency package that included tax breaks for poorer families, public works projects and mortgage relief.

Spain unveiled an 11bn euro plan aimed at creating 300,000 jobs.

The announcements are the latest in a series of attempts by EU governments to shore up their economies as the financial crisis bites.

Italian Prime Minister Silvio Berlusconi called on to Italians to keep on spending.

"We have helped citizens, the less well off, so that they can continue to consume," he said.

"The intensity and duration of the crisis depends on all of us."

Spain's Prime Minister, Jose Luis Rodriguez Zapatero, said the money will be mainly invested in infrastructure and public works.

Spain's unemployment reached 12.8% in October - the highest in the eurozone.

Construction crisis

The Spanish government said it would invest 0.8bn euros in the ailing car industry, which has been through a severe downturn and seen sales plummet 54.6% since the beginning of the year.

The construction industry has also been severely hit by the financial crisis, with property prices falling and companies slashing thousands of jobs.

The Spanish economy shrank by 0.2% in the third quarter, putting an end to 15 years of continuous growth.

The European Commission has demanded that each EU member must spend about 1.2% of Gross Domestic Product (GDP), or economic output, to fight the economic slowdown.

Spain's plan is worth 1.1% of its GDP.

Germany launched a similar 50bn euro package, while next week France is expected to unveil economic measures worth 20bn euros.

Wal-Mart worker dies in sale rush

A shop worker has died after being knocked to the ground by bargain-hunters who stormed into a superstore in New York's suburbs as it opened.

The 34-year-old man, along with several other workers and shoppers, was trampled in the rush at the Wal-Mart store in Valley Stream, Long Island.

US stores opened early and offered steep discounts on Friday.

The day after the Thanksgiving holiday is seen as the start of the Christmas shopping season.

It is regarded as an important test of how willing consumers are to spend.

Crowds of shoppers turned up at dawn at stores across the US to snare the best deals.

Wal-Mart, along with electronics retailer Best Buy and department stores Kohl's and Macy's, opened their doors at dawn.

Toys R Us offered up to 60% discounts from 0500 to 1000.

Several major retailers indicated that crowds were at least as large as last year's, but deep discounts are likely to hurt retailers' profit margins.

Many retailers have suffered as the US economy nosedives although value chains like Wal-Mart have fared better.

US retail sales recorded the biggest monthly decline since 1992 in October as consumers cut back on spending.

China's first home-made jet flies

China successfully flight tested its first home-grown commercial airliner.

The ARJ-21's maiden flight lasted one hour and the aircraft did not rise above 900 metres in altitude due to safety reasons.

The 90-seat jet flew out of a local Shanghai airport and its manufacturer expects it to fly distances up to 3,700km.

Each jet will cost $27m (£22.6m) and first deliveries are expected to take place within 18 months.

Secured Orders
The jet was normal and the flight was smooth

Zhao Peng, Pilot

The plane is being manufactured in Shanghai.

The Commercial Aircraft Corporation of China say they have secured over 200 orders and last month gained five firm orders from GE Commercial Aviation Services who have an option for a further 20 jets.

It's general manager Jin Zhuanglong said: "With less fuel consumption and longer flight hours, the ARJ-21 will reduce air fares by 8% to 10% for Chinese airlines, most of whom currently use large aircraft above 140 seats on short and medium routes."

One of the three pilots on board, Zhao Peng, said "The jet was normal and the flight was smooth."

The jet will face competition from international manufacturers such as Bombardier, Embraer, Airbus and Boeing.

Drug firms 'block cheap medicine'

Drug companies are blocking or delaying the entry of cheaper generic medicines into the EU, pushing up medicine bills, the European Commission has said.

Their actions cost EU healthcare providers 3bn euros ($3.9bn; £2.5bn) in savings between 2000 and 2007, it said.

It added that drug firms used legal action and multiple patents to stop rivals getting to market.

Drug firms said the "perfectly lawful" measures were justified to protect investment in research and development.

Market access

Generic drug companies - which sell cheaper versions of drugs once the patent has expired - have long complained that it is difficult to get their drugs to market in Europe.The Commission said that innovators filed multiple applications to stop generic drugs getting to market - in one case, there were 1,300 patents for a single drug.

The report found that owners of original drugs often intervened in national approval procedures for generic medicines.

There were nearly 700 cases of reported patent litigation and more than 200 settlements between brand name drug companies and generic companies.

More than 10% of these settlements limited the entry of the generic drug to the market.

Fine threat

"Market entry of generic companies and the development of new and more affordable medicines is sometimes blocked or delayed, at significant cost to healthcare systems, consumers and taxpayers," said Competition Commissioner Neelie Kroes.

"It is still early days but the Commission will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached," she added.

The Commission could impose large fines on drug companies if they have engaged in unfair practices.

In 2005, AstraZeneca was fined 60m euros for blocking cheaper rivals to Losec, its heartburn and ulcer pill.

Pressure mounts

Drug firms use "perfectly lawful practices - such as patent portfolios, patent litigation and the release of improved medicines," the European Federation of Pharmaceutical Industries and Associations (EFPIA) said.

"These [practices] are essential for innovators to protect their huge investment in R&D [research and development]," it said, adding that the 17% of turnover industry spent on R&D exceeds any other sector in Europe.

The EFPIA - which said the Commission's report missed the opportunity to tackle the real issues facing the industry - called for a more competitive market for generic drugs, pointing out that Europeans pay more for generic drugs than US citizens.

In response to claims that the delayed or blocked sale of generic drugs was pushing up healthcare costs, the EFPIA said: "A single member state, the Netherlands, achieved greater savings - up to 400m euros - in one year, on only 33 medicines, simply by promoting greater price competition between generics."

The Commission report increases the pressure on the global pharmaceuticals industry.

Barack Obama, the US President-elect, is also expected to try to cut costs as part of the reform of healthcare coverage in the US.

Government to own majority of RBS

The government is to own 57.9% of Royal Bank of Scotland after shareholders bought only a tiny proportion of the new shares being offered by the bank.

The small take-up had been expected as the offer price of 65.5p was about 10p higher than the price at which the shares were trading.

The share issue by RBS, which owns NatWest, was part of the government's plan to recapitalise banks.

The government will pay about £15bn for the majority stake in the bank.

It will also buy £5bn of preference shares in the bank.Existing shareholders agreed to buy almost 56 million shares, which represents just 0.24% of the new shares on offer, at a cost of £36.7m, making an immediate paper loss of £5.6m.

The remainder of the shares are being purchased by the government, which means that taxpayers have made an immediate paper loss of £2.4bn based on Thursday's closing share price.

"We regret that existing shareholders did not take up their pre-emptive rights but understand that market sentiment toward the banking sector made this uneconomic in the short term," said RBS Chief Executive Stephen Hester.

"There remain substantial uncertainties and challenges outside our control but for our part the job is underway."

Strings attached

RBS shareholders voted to take the government money at a meeting last week.

There will be strings attached, with the bank losing freedom in areas such as executive pay and dividend policy.

RBS also had to agree to return to "normal" lending practices, and last week it announced that it would guarantee overdraft rates and contracts for its business customers for at least a year.

The government's shares will be held by a company called UK Financial Investments Ltd, which is supposed to maximise value for taxpayers and prevent politicians making business decisions about banks.

Its chair will be Philip Hampton, chairman of Sainsbury's and former finance director of Lloyds TSB.

Lending problems

RBS is one of the many banks that has been hit by its exposure to debt based on US sub-prime loans.

It has also struggled with the collapse in inter-bank lending as the whole industry worried about which of their peers they could afford to lend to.

Critics say that RBS paid too much to buy ABN Amro last year.

It led a consortium that paid 71bn euros ($91bn; £61bn) for the Dutch bank in October 2007.

OPEC ends Cairo meeting without new output cuts

OPEC ends Cairo meeting without announcing new cuts in crude output

CAIRO, Egypt (AP) -- OPEC has ended a meeting in Cairo without announcing new output cuts.

The oil producing group's president, Chakib Khelil, says OPEC will wait until a meeting in Algeria on Dec. 17 to decide whether to cut additional crude supplies from the market.

Khelil says oil ministers of the Organization of Petroleum Exporting Countries "agreed to take any additional action on 17th of December to balance supply and demand."

His comments Saturday came after the group convened what it called a consultative meeting in Cairo to take stock of market situations and to asses whether members were complying with a 1.5 million barrel per day output cut announced Oct. 24 in Vienna, Austria.

Khelil said preliminary data indicates members are complying.

Mumbai attacks seen denting business confidence

Mumbai attacks seen denting investor confidence but not derailing India's growth prospects

MUMBAI, India (AP) -- The terror attacks that rocked India's financial capital may depress stocks, dampen tourism and slow new investment, but are unlikely to inflict long-term damage on the nation's economy, analysts and business people said Thursday.
"This is a challenge for the government to maintain law and order in the country," said Takahira Ogawa, director of sovereign ratings at Standard & Poor's in Singapore. "At this stage, I don't think there will be any major impact on the macroeconomic or fiscal position of the government."

The attacks, which began Wednesday night when gunmen invaded two posh hotels, a restaurant and several other sites in downtown Mumbai, came as India was struggling to contain fallout from the global financial crisis.

Foreign investors have already pulled $13.5 billion out of the nation's stock market this year, driving the benchmark Sensex index down 57 percent and punishing the rupee. Liquidity has dried up, economic growth is slowing and people are spending less money.

The attacks are "a challenge to the economic resurgence in India," said Habil Khorakiwala, chairman of Wockhardt, an Indian pharmaceutical company.

"The targets identified clearly demonstrate that the intention is to create panic and shatter the confidence in the minds of investors in India and global investors coming to India," he said in a statement. "This war has to be fought together by all across, to protect the safety of Indian people, for economic resurgence and growth of the Indian nation."

A previously unknown Islamic militant group calling itself the Deccan Mujahideen claimed responsibility for the carnage, the latest in a series of nationwide terror attacks over the past three years that have tarnished India's image as an industrious nation galloping toward prosperity.

In an address to the nation, Indian Prime Minister Manmohan Singh said Thursday it was "evident" that a "group based outside the country" carried out the attacks.

The gunmen singled out Westerners for punishment and struck two spots -- the Oberoi hotel and the historic Taj Palace & Hotel -- at the symbolic heart of Mumbai's growing, global financial class.

Just last week former U.S. Secretary of State Henry Kissinger sat with top executives from Goldman Sachs and the Tata Group for a chat about American politics in one of the Taj's many opulent meeting rooms.

On Thursday, that wing of the building was engulfed in flames.

Throughout the day, explosions and gunfire were heard as Indian commandos tried to free hostages trapped by the militants. Officials said 104 people had died and more than 300 were wounded.

Anglo-Dutch food giant Unilever said that a number of senior executives, including group Chief Executive Patrick Cescau and his successor Paul Polman were in Mumbai at the time of the attacks. The company said all were safe and accounted for.

Mumbai's stock market was closed Thursday, and it was unclear when trading would resume.

Vishesh Chandiok, a partner at global consulting firm Grant Thornton, said he was supposed to fly to Mumbai and stay in the Taj Thursday night. His company indefinitely postponed plans to hold a global conference in Mumbai next week.

"It is a shock," he said. "There will be some short-term postponement of people's investment plans, and perhaps people thinking of relocating to Mumbai will reconsider."

But medium- to long-term corporate investment would likely remain on track, he said.

"India is no bigger a risk than anywhere," he said, adding: "Mumbai is a very resilient city. Saturday everything will be running as normal."

Indeed, Mumbai has a long history of terror attacks -- and has managed to bounce back from them. A series of bombings in July 2006 killed 187 people.

Chandiok said Indian companies are going to have to take security issues more seriously going forward, and Grant Thornton's India office has already begun a review of its policies.

Manjit Rajain, chairman of Tenon Services, a facilities management and security company whose clients include Accenture, Intel Corp., automaker Maruti Suzuki, the Tata group, and Vodafone, said he was up all night Wednesday, speaking with overseas clients.

"Yes, people will be scared," Rajain said. New investors may balk, but he said most of the companies he works with are too big and well entrenched to consider a hasty exit.

Online retailers ramp up deals to capture dollars

As the online shopping season begins with 'Cyber Monday,' retailers ramp up promotions, deals

NEW YORK (AP) -- Online retailers are ramping up heavy-duty deals to turn skittish shoppers into buyers during the crucial Thanksgiving weekend and "Cyber Monday" -- but even so, online sales are expected to be fairly flat after years of strong growth.Free shipping is virtually a given, and many are offering financing options such as no payments for 90 days and deals like $10 off purchases of $50 or more, along with traditional discounts on products.

"Last year, people were spending a lot more money on gifts and products," says Jeff Wisot, vice president of marketing for online retailer Buy.com. "With the economic challenges arising this year, people are definitely spending less."

"Cyber Monday," a term coined by the trade group National Retail Federation in 2005 to describe the Monday after the Thanksgiving holiday, is the unofficial kickoff for the busy online retail season.

However, this year, consumer spending has dropped dramatically -- down 1 percent in October, the largest amount since the 2001 terrorist attacks -- as consumers grapple with a shaky economy, mounting job losses and a prolonged housing slump.

During the holidays, the trade group expects overall holiday spending will total about $470.4 billion, a 2.2 percent rise from a year ago and the slowest growth since 2002, and online retail is being hit along with brick-and-mortar stores. ComScore, a digital technology monitoring company, said Tuesday it expects online retail spending for November and December to be flat compared with the same two months in 2007. Last year's growth rate was 19 percent.

The expected slowdown in online growth is "dramatically different than what we've seen," says Marshal Cohen, chief industry analyst at NPD Group. "Consumers are not in a rush to shop."

In an effort to entice them, online retailers are offering a bounty of deals.

Wisot of Buy.com says his site is offering free shipping on most items, instant rebates and deals on TVs, GPS devices and other items.

Online jeweler BlueNile.com sent out a targeted e-mail promotion offering $100 off a $500 engagement ring, valid until Tuesday. And through Bill Me Later, an online payment site eBay.com is acquiring, BlueNile.com is offering 0 percent financing on purchases of $500 or more for six months. Bill Me Later has similar promotions for other online retailers.

Meanwhile, Amazon.com will take up to 65 percent off watches and offer one-day deals such as knife set that is usually $157 on sale for $49.99.

"We're bringing prices down as low as we can get them," Berman says. "These are great deals."

Online auction site eBay.com is holding what it calls the largest sale in its history, with $1 holiday doorbuster items hidden on the site that consumers hunt for, including a 65-inch Panasonic plasma HDTV and a 2009 Chevy Corvette. EBay also will offer items typically in demand for the holidays for bids starting at $1.

Toys "R" Us is offering more online promotions on Cyber Monday than last year, including 70 percent off Star Wars figures, $50 off the normally $59.99 Guitar Hero wired guitar controller from Activision and other deals.

And PayPal, another online payment site that eBay owns, is partnering with several retailers on deals. At Toys "R" Us, customers get $10 off purchases of $50 or more. Elsewhere, customers using PayPal can receive cash-back incentives ranging from 5 percent to 30 percent off at retailers including American Eagle Outfitters Inc., Overstock.com and Blockbuster.

Whether all the deals, rebates and discounting offers will help remains to be seen, says Dr. Michael Belch, a professor of marketing at San Diego State University.

"There's little doubt the consumer is still going to be very price sensitive," he says. "They're going to be looking for values."

Obama asks urgent action on 'historic' econ crisis

Obama presses new Congress for urgent action on economic 'crisis of historic proportions'

CHICAGO (AP) -- Citing an "economic crisis of historic proportions," President-elect Barack Obama urged Congress to pass a costly, job-creating stimulus bill as quickly as possible, a rare pre-inaugural call to action delivered as the outgoing Bush administration approved fresh billions to bail out one of the nation's largest banks.Stock prices surged -- the biggest two-day percentage gain for the Dow Jones industrials in 21 years -- as investors took heart Monday from the actions and words of the incoming and departing chief executives.

"If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," said Obama, 57 days shy of taking office in the shadow of the worst economic crisis since the Great Depression.

He blended criticism of Detroit's beleaguered Big Three automakers -- General Motors Corp., Ford Motor Co. and Chrysler LLC -- with a pledge of support for government aid to help them survive. "We can't allow the auto industry to ... vanish," he said, although he added that a blank check for an industry resistant to change was not the solution to its long-term decline.

At a news conference in which he introduced New York Federal Reserve President Timothy Geithner as his treasury secretary and named other top economic officials, Obama said restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for "meaningful cuts and sacrifices" to restrain federal spending.

The president-elect was expected to stress that pledge at a second news conference on Tuesday. Democratic officials said he intended to name Peter Orszag, currently the head of the Congressional Budget Office, to be his budget director.

Obama and President George W. Bush spoke by telephone during the day, their first disclosed conversation since a visit at the White House more than a week ago, and each man appeared eager to show a transition proceeding smoothly.

At the same time, the juxtaposition of the outgoing and incoming chief executives grappling -- publicly and simultaneously -- with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large spike in mortgage foreclosures and crippled the credit markets.

Bush said his administration's dramatic overnight rescue of Citigroup Inc. was necessary to safeguard the nation's financial system and help the economy recover. He said more such moves might follow if other institutions need help. Officials said the government might invest $20 billion in the firm, and guarantee $306 billion in risky assets.

Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday's gain, that mean an 891 point increase over two trading days, the biggest percentage rise since October 1987.

Obama made a point of saying his administration "will honor the public commitments made by the current administration to address this crisis," words of reassurance to the financial markets.

Remarkably for a president-elect, he said he wanted Congress to act "right away" on a stimulus measure that would blend spending and tax cuts. Asked for details, he said without elaboration that he wanted a measure "of a size and scope that is necessary to get this economy back on track."

Democratic officials in Congress said the stimulus plan could include aid to cash-strapped states to provide health care to the poor, along with road and bridge funding. More money for food stamps is also likely, they said.

Obama renewed his campaign-long call for middle class tax cuts but said he would let his advisers make a recommendation on whether to roll back Bush-era tax cuts for the wealthy.

He offered few details about the economic stimulus measure he wants from the new Congress, saying he would ask his new team of advisers to consult with lawmakers.

As a candidate, he supported a $175 billion measure, but the economy has worsened since then, and many lawmakers and economists argue for a more robust jolt. Obama said his goal is to create 2.5 million jobs by "rebuilding our infrastructure, our roads, our bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century."

His forecast was sober. He said there are neither shortcuts nor quick fixes.

"The economy is likely to get worse before it gets better. Full recovery will not happen immediately," he said. At the same time, he coupled those sentiments with optimism. "I know we can work our way out of this crisis because we have done it before."

The new Congress comes into session on Jan. 6, two weeks before Obama takes the oath of office as the nation's 44th president.

Democratic leaders have said they are eager to spend the time before then working on the legislation he wants, and Obama had scarcely made his remarks when political jockeying broke out over the details.

Senate Majority Leader Harry Reid, D-Nev., issued a challenge to Republicans to join Democrats in sending legislation to the White House as soon as possible.

House Republican Leader John Boehner of Ohio said he hoped the new administration would listen to those "who do not believe increasing government spending is the best way to put our economy back on track."

Nominally, Obama called the news conference to introduce the top members of the economic circle of advisers who will join his administration.

As treasury secretary he turned to Geithner as well as Former Treasury Secretary Lawrence Summers to head his National Economic Council.

In recent months, the 47-year-old Geithner has worked closely with the Bush administration on the bailout of the financial industry, and earlier in his career was involved in responding to international financial crises overseas.

Obama named Christina Romer, an economics professor, as chair of his Council of Economic Advisers. Melody Barnes, a former aide to Sen. Edward M. Kennedy, was named director of the White House Domestic Policy Council.

The appointment of Geithner was the first Cabinet selection Obama has announced, a distinction meant to underscore the economy's importance as he prepares to take office.

Democratic officials have said previously the president-elect is on track to name former rival Hillary Rodham Clinton, the New York senator, as secretary of state, and former Clinton administration Justice Department official Eric Holder as attorney general.

Robert Gates, defense secretary during Bush's last two years in office, is a possible holdover, at least for several months, aides to Obama have said.

David Espo reported from Washington. AP Writer Jeannine Aversa contributed from Washington.

Obama asks urgent action on 'historic' econ crisis

Obama presses new Congress for urgent action on economic 'crisis of historic proportions'

CHICAGO (AP) -- Citing an "economic crisis of historic proportions," President-elect Barack Obama urged Congress to pass a costly, job-creating stimulus bill as quickly as possible, a rare pre-inaugural call to action delivered as the outgoing Bush administration approved fresh billions to bail out one of the nation's largest banks.Stock prices surged -- the biggest two-day percentage gain for the Dow Jones industrials in 21 years -- as investors took heart Monday from the actions and words of the incoming and departing chief executives.

"If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," said Obama, 57 days shy of taking office in the shadow of the worst economic crisis since the Great Depression.

He blended criticism of Detroit's beleaguered Big Three automakers -- General Motors Corp., Ford Motor Co. and Chrysler LLC -- with a pledge of support for government aid to help them survive. "We can't allow the auto industry to ... vanish," he said, although he added that a blank check for an industry resistant to change was not the solution to its long-term decline.

At a news conference in which he introduced New York Federal Reserve President Timothy Geithner as his treasury secretary and named other top economic officials, Obama said restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for "meaningful cuts and sacrifices" to restrain federal spending.

The president-elect was expected to stress that pledge at a second news conference on Tuesday. Democratic officials said he intended to name Peter Orszag, currently the head of the Congressional Budget Office, to be his budget director.

Obama and President George W. Bush spoke by telephone during the day, their first disclosed conversation since a visit at the White House more than a week ago, and each man appeared eager to show a transition proceeding smoothly.

At the same time, the juxtaposition of the outgoing and incoming chief executives grappling -- publicly and simultaneously -- with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large spike in mortgage foreclosures and crippled the credit markets.

Bush said his administration's dramatic overnight rescue of Citigroup Inc. was necessary to safeguard the nation's financial system and help the economy recover. He said more such moves might follow if other institutions need help. Officials said the government might invest $20 billion in the firm, and guarantee $306 billion in risky assets.

Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday's gain, that mean an 891 point increase over two trading days, the biggest percentage rise since October 1987.

Obama made a point of saying his administration "will honor the public commitments made by the current administration to address this crisis," words of reassurance to the financial markets.

Remarkably for a president-elect, he said he wanted Congress to act "right away" on a stimulus measure that would blend spending and tax cuts. Asked for details, he said without elaboration that he wanted a measure "of a size and scope that is necessary to get this economy back on track."

Democratic officials in Congress said the stimulus plan could include aid to cash-strapped states to provide health care to the poor, along with road and bridge funding. More money for food stamps is also likely, they said.

Obama renewed his campaign-long call for middle class tax cuts but said he would let his advisers make a recommendation on whether to roll back Bush-era tax cuts for the wealthy.

He offered few details about the economic stimulus measure he wants from the new Congress, saying he would ask his new team of advisers to consult with lawmakers.

As a candidate, he supported a $175 billion measure, but the economy has worsened since then, and many lawmakers and economists argue for a more robust jolt. Obama said his goal is to create 2.5 million jobs by "rebuilding our infrastructure, our roads, our bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century."

His forecast was sober. He said there are neither shortcuts nor quick fixes.

"The economy is likely to get worse before it gets better. Full recovery will not happen immediately," he said. At the same time, he coupled those sentiments with optimism. "I know we can work our way out of this crisis because we have done it before."

The new Congress comes into session on Jan. 6, two weeks before Obama takes the oath of office as the nation's 44th president.

Democratic leaders have said they are eager to spend the time before then working on the legislation he wants, and Obama had scarcely made his remarks when political jockeying broke out over the details.

Senate Majority Leader Harry Reid, D-Nev., issued a challenge to Republicans to join Democrats in sending legislation to the White House as soon as possible.

House Republican Leader John Boehner of Ohio said he hoped the new administration would listen to those "who do not believe increasing government spending is the best way to put our economy back on track."

Nominally, Obama called the news conference to introduce the top members of the economic circle of advisers who will join his administration.

As treasury secretary he turned to Geithner as well as Former Treasury Secretary Lawrence Summers to head his National Economic Council.

In recent months, the 47-year-old Geithner has worked closely with the Bush administration on the bailout of the financial industry, and earlier in his career was involved in responding to international financial crises overseas.

Obama named Christina Romer, an economics professor, as chair of his Council of Economic Advisers. Melody Barnes, a former aide to Sen. Edward M. Kennedy, was named director of the White House Domestic Policy Council.

The appointment of Geithner was the first Cabinet selection Obama has announced, a distinction meant to underscore the economy's importance as he prepares to take office.

Democratic officials have said previously the president-elect is on track to name former rival Hillary Rodham Clinton, the New York senator, as secretary of state, and former Clinton administration Justice Department official Eric Holder as attorney general.

Robert Gates, defense secretary during Bush's last two years in office, is a possible holdover, at least for several months, aides to Obama have said.

David Espo reported from Washington. AP Writer Jeannine Aversa contributed from Washington.

Obama asks urgent action on 'historic' econ crisis

Obama presses new Congress for urgent action on economic 'crisis of historic proportions'

CHICAGO (AP) -- Citing an "economic crisis of historic proportions," President-elect Barack Obama urged Congress to pass a costly, job-creating stimulus bill as quickly as possible, a rare pre-inaugural call to action delivered as the outgoing Bush administration approved fresh billions to bail out one of the nation's largest banks.Stock prices surged -- the biggest two-day percentage gain for the Dow Jones industrials in 21 years -- as investors took heart Monday from the actions and words of the incoming and departing chief executives.

"If we do not act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," said Obama, 57 days shy of taking office in the shadow of the worst economic crisis since the Great Depression.

He blended criticism of Detroit's beleaguered Big Three automakers -- General Motors Corp., Ford Motor Co. and Chrysler LLC -- with a pledge of support for government aid to help them survive. "We can't allow the auto industry to ... vanish," he said, although he added that a blank check for an industry resistant to change was not the solution to its long-term decline.

At a news conference in which he introduced New York Federal Reserve President Timothy Geithner as his treasury secretary and named other top economic officials, Obama said restoring the economy to health took priority over deficit concerns. Still, he said he would be looking for "meaningful cuts and sacrifices" to restrain federal spending.

The president-elect was expected to stress that pledge at a second news conference on Tuesday. Democratic officials said he intended to name Peter Orszag, currently the head of the Congressional Budget Office, to be his budget director.

Obama and President George W. Bush spoke by telephone during the day, their first disclosed conversation since a visit at the White House more than a week ago, and each man appeared eager to show a transition proceeding smoothly.

At the same time, the juxtaposition of the outgoing and incoming chief executives grappling -- publicly and simultaneously -- with the economy underscored the severity of a crisis that has sent joblessness rising, caused a large spike in mortgage foreclosures and crippled the credit markets.

Bush said his administration's dramatic overnight rescue of Citigroup Inc. was necessary to safeguard the nation's financial system and help the economy recover. He said more such moves might follow if other institutions need help. Officials said the government might invest $20 billion in the firm, and guarantee $306 billion in risky assets.

Encouraged by the action, investors sent the Dow Jones industrials up 397 points. Coupled with Friday's gain, that mean an 891 point increase over two trading days, the biggest percentage rise since October 1987.

Obama made a point of saying his administration "will honor the public commitments made by the current administration to address this crisis," words of reassurance to the financial markets.

Remarkably for a president-elect, he said he wanted Congress to act "right away" on a stimulus measure that would blend spending and tax cuts. Asked for details, he said without elaboration that he wanted a measure "of a size and scope that is necessary to get this economy back on track."

Democratic officials in Congress said the stimulus plan could include aid to cash-strapped states to provide health care to the poor, along with road and bridge funding. More money for food stamps is also likely, they said.

Obama renewed his campaign-long call for middle class tax cuts but said he would let his advisers make a recommendation on whether to roll back Bush-era tax cuts for the wealthy.

He offered few details about the economic stimulus measure he wants from the new Congress, saying he would ask his new team of advisers to consult with lawmakers.

As a candidate, he supported a $175 billion measure, but the economy has worsened since then, and many lawmakers and economists argue for a more robust jolt. Obama said his goal is to create 2.5 million jobs by "rebuilding our infrastructure, our roads, our bridges, modernizing our schools and creating the clean energy infrastructure of the 21st century."

His forecast was sober. He said there are neither shortcuts nor quick fixes.

"The economy is likely to get worse before it gets better. Full recovery will not happen immediately," he said. At the same time, he coupled those sentiments with optimism. "I know we can work our way out of this crisis because we have done it before."

The new Congress comes into session on Jan. 6, two weeks before Obama takes the oath of office as the nation's 44th president.

Democratic leaders have said they are eager to spend the time before then working on the legislation he wants, and Obama had scarcely made his remarks when political jockeying broke out over the details.

Senate Majority Leader Harry Reid, D-Nev., issued a challenge to Republicans to join Democrats in sending legislation to the White House as soon as possible.

House Republican Leader John Boehner of Ohio said he hoped the new administration would listen to those "who do not believe increasing government spending is the best way to put our economy back on track."

Nominally, Obama called the news conference to introduce the top members of the economic circle of advisers who will join his administration.

As treasury secretary he turned to Geithner as well as Former Treasury Secretary Lawrence Summers to head his National Economic Council.

In recent months, the 47-year-old Geithner has worked closely with the Bush administration on the bailout of the financial industry, and earlier in his career was involved in responding to international financial crises overseas.

Obama named Christina Romer, an economics professor, as chair of his Council of Economic Advisers. Melody Barnes, a former aide to Sen. Edward M. Kennedy, was named director of the White House Domestic Policy Council.

The appointment of Geithner was the first Cabinet selection Obama has announced, a distinction meant to underscore the economy's importance as he prepares to take office.

Democratic officials have said previously the president-elect is on track to name former rival Hillary Rodham Clinton, the New York senator, as secretary of state, and former Clinton administration Justice Department official Eric Holder as attorney general.

Robert Gates, defense secretary during Bush's last two years in office, is a possible holdover, at least for several months, aides to Obama have said.

David Espo reported from Washington. AP Writer Jeannine Aversa contributed from Washington.

Chrysler calls for cash lifeline

The boss of struggling US car firm Chrysler has warned that it would be "very difficult" for the company to survive without government support.

Bob Nardelli's comments come as Chrysler and fellow "Big Three" US car firms Ford and General Motors (GM) seek a total $25bn (£17bn) in federal aid.

House Speaker and leading Democrat Nancy Pelosi said this week that she wants Congress to approve these funds.

Chrysler, Ford and GM have all been hit by falling US sales and growing losses.

Equity stake?

Mr Nardelli said that while Chrysler "cannot assume we are going to get financial assistance", he said that if it was forthcoming, the government would likely take an equity stake. Whether state aid is given to the three firms is complicated by the change in US presidency, which will be completed when Barack Obama is sworn in on 20 January.

However, most analysts expect the firms to get some form of financial assistance at least by the spring, saying it is highly unlikely that President-elect Obama will want to see any of the country's iconic carmakers fail so soon into his presidency.

Chrysler, GM and Ford have already received support from President Bush, who at the start of October signed legislation that gives them access to $25bn of cheap government-backed loans to help them develop less-polluting cars.

Ms Pelosi has suggested that $25bn for the three carmakers could come from the $700bn bail-out package for the financial sector.

However US Treasury Sectary Henry Paulson has appeared to rule out such a move, saying the funds are only for financial firms.

Job cuts

Last month Chrysler announced thousands of job cuts as it continues efforts to establish a firmer financial footing.

It said it would cut a quarter of its 18,500 white collar positions and 1,825 manufacturing jobs.

Mr Nardelli said at the time that the US car industry was facing "truly unimaginable times".

"We continue to be in the most difficult economic period most of us can remember," he said.

Private equity firm Cerberus bought 80% of Chrysler for $7.4bn (£5bn) in May 2007. Since then Chrysler's share price has plummeted.

The party may be over in Singapore

By Mariko Oi
BBC Asia Business Report, Singapore

For many business people in Singapore, swinging a golf club is the perfect way to end an exhausting trading day. This time last year, Dilip Ghosh was a currency trader who spent much of his personal time on golf courses.

He then decided on a career change - he quit the financial services industry to set up the city state's first indoor golf lounge.

"After 13-and-a-half years in banking, I was not enjoying going to work," he says.

"I then realised how quickly I got replies from my clients when I emailed them about golfing. A lot quicker than when I emailed them about currency movements."

'A sexy job'

He admits it was a big adjustment to make - not having a stable salary. But he is glad he got out when he did.

"For 20 years, a financial market has been a great job to be involved in. It pays well, it's a sexy job to have, it's interesting and exciting.

"But suddenly if you find that there is a lot less jobs and not getting paid the huge bonuses, of course it's not going to be as interesting."

In recent months, many more people have been leaving the financial industry - though not by their own choice.

It is very difficult to persuade people who have been laid off to speak publicly.

Many of them have signed a contract agreeing not to talk to the media, and others are scared to jeopardise their chances of scoring another job in the future.

Getting worse

Mark Ellwood has been working for professional recruitment firm Robert Walters in Singapore since 1999.

He says things are only getting worse.

"What we're seeing now is job cuts within the financial services industry. But it will start to then have an impact on the larger mainstream market.

"Most organisations are coming up to the budget time and they are very cost conscious, which makes them focus on head counts." And some impact on the service industry is also inevitable. Out of the 4.6 million people who live in Singapore, almost one million are expats.

Over the last few years, many flash bars have been popping up around the city state to keep them entertained.

"I think one of the big things that will come out of this crisis is that people have been living beyond their means for a long time," says Dilip.

"People are getting upset now but for the last 20 years, we've all been prosperous and we've all had a good time. So it's time for a reality check."

For years the financial district of Singapore has been a magnet for thousands of expats seeking big bonuses and a glamorous lifestyle.

But now with job losses spreading to Asia and the city state in recession, the party could very soon be over.

Apec upbeat over global downturn

Leaders of Asia-Pacific nations have closed their annual summit by declaring their belief that the global economic crisis can be overcome by 2010.

The 21 leaders meeting in Lima, Peru, said they supported economic stimulus to ward off the threat of recession.

They signed a final declaration backing free trade and insisting that the economic crisis could be overcome.

The meeting was US President George W Bush's final summit before leaving office on 20 January.

In their closing declaration, the leaders of the Asia-Pacific Economic Co-operation (Apec) nations backed emerging global plans to boost spending in the face of lower economic growth rates.

"We are convinced that we can overcome this crisis in a period of 18 months," the statement said."We have already taken urgent and extraordinary steps to stabilise our financial sectors and strengthen economic growth," Peruvian President Alan Garcia said on behalf of the delegates.

"We will act quickly and decisively to address the impending global economic slowdown."

Apec members account for more than half of all world trade and include nine members of the G20 group of leading industrialised and developing nations, which met in Washington last weekend to formulate their own response to the crisis.

No barriers

The leaders also agreed to seek a solution to the deadlock in the current Doha round of the World Trade Talks, saying they would send ministers to Geneva next month to try and restart the process.

"A prompt, ambitious and balanced conclusion to the World Trade Organisation - Doha Development Agenda negotiations would deliver substantial improvements in market access and reduce market-distorting measures in global agricultural trade," they said.

The final declaration followed a statement made at the half-way point of the summit on Saturday, in which the leaders agreed to avoid protectionist measures and keep trade free despite the economic climate.

Mr Bush received warm applause on Saturday when he used a summit speech to call for a renewed commitment to free trade.

Despite the upbeat statements and rhetoric, the BBC's Dan Collyns in Lima says there was a sense that concrete action would not be taken until US President-elect Barack Obama took office in January.

Mr Bush used the summit to say farewell to several of the major world leaders he has dealt with regularly during his time in office.

He held meetings with the leaders of Japan and China, and was honest about his working relationship with Russian President Dmitry Medvedev.

"We've had agreements and we've had disagreements," said Mr Bush.

The final declaration of the Apec meeting is likely to please Mr Bush, who has consistently pushed for open markets, our correspondent says.

But there were some voices of caution, including those of Mexican President Felipe Calderon and Canada's Prime Minister Stephen Harper.

Mr Calderon said the prospect of ending the economic problems was more of an estimate than a prediction, while Mr Harper stressed his concern that fiscal stimulus packages should not leave countries with unmanageable budget deficits.

Wall Street braces for another pivotal week

Investors brace for a week expected to bring key Obama appointments, no deal for automakers

NEW YORK (AP) -- Wall Street faces another pivotal week, with investors enmeshed in a stock market knocked to 11-year lows amid growing fears about the fate of the nation's ailing automobile industry and banking system.The market, considered a forward-looking gauge of the economy, appears to lack any catalysts for buying. The triggers of last week's massive stock losses continue to hang over the market, with no bailout seen for Detroit's three automakers and Citigroup Inc. shares plunging to all-time lows.

And, that's just the start of it -- even more uncertainty is expected to come in a week shortened by the Thanksgiving holiday. A stream of economic reports, the start of the holiday shopping season, and more clues about the job market will keep investors scrambling in the coming days.

One thing investors can expect is more volatility in a fractious market, where thin volume exacerbates the market's wild swings. Last week, the stock market slumped to lows not seen since 1997 on Thursday before recovering with a big rally the next day.

The question analysts pondered over the weekend is whether investors can find a way to build on Friday's rally. The answer could come Monday afternoon when President-elect Barack Obama is scheduled to introduce his economic team.

"It seems to me that President-elect Obama has a chance to do something important that could improve people's psychology," said Peter Cohan, principal of Peter S. Cohan & Associates. "If Obama can reverse the psychology -- make people believe that he understands the problem and will do what's needed to solve it -- then they will start to engage again with the economic system."

Obama is expected to name Timothy Geithner, president of the New York Federal Reserve bank, as Treasury Secretary; Lawrence Summers, a former treasury secretary under President Bill Clinton, is expected to be named as director of the National Economic Council.

There were some preliminary signs Sunday evening that investors were in a cautiously optimistic mood. Dow Jones industrial average futures were up 33 points, or 0.41 percent, at 8,069.00. Standard & Poor's 500 index rose 5.70 points, or 0.72 percent, at 797.70, while Nasdaq 100 futures added 4.50, or 0.41 percent, at 1095.50.

On Friday, the stock market got a jolt of confidence after talk that Geithner would become Treasury Secretary began to float around trading floors. The Dow Jones industrial average surged nearly 500 points.

However, the big gain finished a pretty dismal week in which the Dow lost 5.3 percent, the Standard & Poor's 500 index fell 8.4 percent, and the Nasdaq composite lost 8.8 percent. The Dow is off nearly 14 percent for the month of November, and has plunged 40 percent from last year.

Obama's news conference might also provide details about some of his plans to help right the economy.

Over the weekend, Obama's top aides said he wants the new Congress to approve massive spending and fresh tax cuts in January, probably far distancing a $175 billion campaign proposal, so he can sign it after taking office. He also outlined the framework of a plan to save or create 2.5 million jobs by the end of 2010.

Obama could also face questions about what should be done about Ford Motor Co., Chrysler LLC, and General Motors Corp. Congress postponed debates on aid to the automakers, and that caused even more fears about how steep the U.S. recession would be if one of those companies were to go bust.

There are also concerns about the fate of Citigroup, the leading U.S. financial services company whose stock price has been halved because of a crisis of confidence in its future. Citi has seen its market value plunge to about $21 billion on Friday from more than $270 billion at the end of 2006.

The company's board met Friday to discuss the situation, and management maintains that it is adequately capitalized and doesn't plan to break up the company. On Sunday, the Treasury Department and the Federal Reserve was weighing a plan to stabilize Citigroup, according to people familiar with the talks. They spoke on condition of anonymity because the discussions were ongoing.

One option being considered is taking some of the risky assets held by Citigroup off its balance sheet, a move that would give the company more breathing room and put it in a better position to raise capital. It was unclear, however, exactly how that option might be structured, the people said.

A spokesman for New York-based Citigroup declined comment.

Investors are also expected to pay close attention to a number of economic reports due to be released during the week, including readings on existing and new home sales for October, and weekly U.S. jobless claims data. But the most-watched reports are those focused on consumers, whose spending drives more than two-thirds of the U.S. economy.

Wall Street will again look to Black Friday, the day after Thanksgiving that kicks off the holiday shopping season. The day, typically the busiest shopping day of the year, is used as a gauge for consumer spending.

There are also a number of retailers that will report quarterly results, including Tiffany and Co., Talbots Inc., American Eagle Outfitters Inc., and Dollar Tree Inc.

AP Economics Writer Jeannine Aversa contributed to this story from Washington.

Sources: Government working on Citigroup rescue

Sources: Government working on plan to aid New York-based Citigroup

WASHINGTON (AP) -- The government was weighing a plan on Sunday to rescue Citigroup Inc., whose stock has been hammered on worries about its financial health.

The Treasury Department and the Federal Reserve have been in discussions over the weekend to devise a strategy to stabilize the company, according to people familiar with the talks. They spoke on condition of anonymity because the discussions were ongoing.One option being considered is taking some of the risky assets held by Citigroup off its balance sheet, a move that would give the company more breathing room and put it in a better position to raise capital. It was unclear, however, exactly how that option might be structured, the people said. Another option would be for the government to make another cash injection into the company.

A spokesman for New York-based Citigroup declined comment.

The company has seen its shares lose 60 percent of their value in the past week, reflecting a crisis of confidence among skittish investors. They are worried all the risky debt on Citigroup's balance sheet will turn into losses as the economy worsens and the markets stay turbulent -- losses that could be nearly impossible to reverse.

Citigroup is such a large, interconnected player in the financial system that if it were to collapse it would wreak havoc on already fragile financial and economic conditions. The company has operations stretching around the globe in more than 100 countries.

Analysts consider Citigroup the most vulnerable among the major U.S. banks -- especially after it failed to nab Wachovia Corp., which was bought instead by Wells Fargo & Co. That was a missed opportunity for Citi to gets its hands on much-needed U.S. deposits that would bolster its cash position.

Citigroup was especially hard hit by the meltdown in risky, subprime mortgages made to people with tarnished credit or low incomes. Foreclosures on those mortgages spiked, leaving Citi and other financial companies racking up huge losses on the soured investments. The company has failed to turn a profit during the past four quarters.

The company has already received $25 billion from the Treasury Department's $700 billion financial bailout program. In return for the cash infusion, the government gets a partial ownership stake.

Sen. Charles Schumer, D-N.Y., said Sunday he is confident the government and Citigroup "can come up with a plan that ensures Citigroup's viability, which is really important for the whole economy. ... If you let it go down, millions of innocent people are hurt, and the economy suffers at a time when it's terribly, terribly fragile," he said on ABC's "This Week."

Sen. Richard Shelby, R-Ala., a free-market advocate who opposes government intervention, said he thought any effort to aid Citigroup was a mistake.

"Citi has got to save itself," Shelby said. "And, can they do it by a merger with somebody else or going to somebody else? I don't know," he said on ABC.

AP Business Writer Madlen Read in New York contributed to this article.

VAT 'to be cut in rescue package'

Gordon Brown has refused to comment on reports the government will cut VAT by 2.5% as part of an emergency package aimed at kick-starting the economy.

But the PM said "substantial" measures would be in the pre-Budget report on Monday to pump money into the economy.

And he denied increasing borrowing to fund tax cuts was a "gamble", saying it was "responsible and necessary".

Tory leader David Cameron has warned the government's plans will lead to a future "tax bombshell".

Mr Brown refused to speculate on the contents of Chancellor Alistair Darling's statement on Monday, but he said there was a consensus around the world that any "fiscal stimulus" had to be "substantial to have an impact".

Experts say the government will have to increase borrowing to record levels of £100bn or more, which the country will have to pay back later in higher taxes - and there is no guarantee tax cuts will get consumers spending again. But Mr Brown told BBC One's The Politics Show: "I don't see this as a gamble, I see this as necessary, responsible action, that any sensible government would want to take.

"Those people who say do nothing now, would leave people, as in the 1980s and 1990s, without hope that their mortgage problems could be sorted out, or their jobs problems could be sorted out.

"It would be lacking in compassion, as well as irresponsible, in my view."

Planned giveaway

Pressed on whether Mr Darling would also be setting out details of future tax rises on Monday, Mr Brown said: "I think you'll find that everything is above board. It is stated. There is no hidden manifesto. People will be absolutely clear that we are taking action now to prevent permanent damage later."

He refused to be drawn on reports he is considering a summer general election to capitalise on his improved fortunes in the polls.

He said his "undivided attention" was on fixing the economy.

Widespread press reports suggest Mr Darling will temporarily cut VAT by 2.5% to 15% - the lowest level allowed under EU law - in an effort to boost consumer spending.

However, it is not known if the cut would come into effect before Christmas as some newspapers have suggested.

It would be the first time the sales tax has been changed since the early 1990s, when the Conservatives increased it to 17.5%.

Taken together with other planned giveaways, it would mark the biggest shift in Labour's economic policy since it came to power in 1997.

Other measures could include:

* Extending for another year the £120 rebate for low-paid workers who lost out through the abolition of the 10p tax rate
* Increasing the period of grace before lenders repossess homes to three months
* Scrapping planned rises in vehicle excise duty for another year

'Consumer confidence'

Earlier, business secretary Lord Mandelson conceded any tax cuts would have to be paid for in the long term, saying: "Of course they will, if what we are going to do tomorrow (Monday) is going to be sustainable."

But he said action was needed now to deliver the sort of stimulus necessary to raise demand, "filling up order books again".
Conservative leader David Cameron said he was "sceptical" that the government's plan would get consumers spending because they would be aware of the "tax bombshell" they face in future years to repay the national debt.

He said: "I think people are going to be shocked tomorrow (Monday) when they see the extent of government borrowing.

"Maybe £80bn this year, before the recession's even properly started, and possibly over £100bn next year. And next year that is over £4,000 extra for every family in the country.

"So I do have a real concern about a government going on a borrowing binge that even they are now admitting is going to lead to much higher taxes later."

'Sustainable' alternatives

The Conservative leader called for further interest rate cuts and government guarantees for loans to small firms in an effort to help homeowners and businesses.

The party has resurrected its successful advertising campaign from the 1992 general election to warn voters they face a "tax bombshell" to pay for Mr Brown's economic rescue package.Lib Dem treasury spokesman Vince Cable said his party backed tax cuts for low and middle income workers, but said they should be made permanent by increasing taxes on the rich.

He said: "A big tax cut's desirable, that's certainly the case. And a VAT cut would act very quickly, which is positive.

"But we prefer a different approach which is more targeted on people who really need it. And we believe that people on low incomes, low wages should get an income tax cut - lifting thresholds or reducing the rate. And that's a much better way of concentrating resources where it needs it.

"And it would also be sustainable because we've identified how you would pay for it. It wouldn't just be a temporary handout."

APEC leaders say no protectionism,yes to Doha

Pacific Rim leaders pledge no new protectionism for 12 months, say they’ll wrap up Doha soon.

LIMA, Peru (AP) — Leaders who oversee half the world’s economy pledged Saturday to avoid protectionism but shied away from any new proposals on the financial crisis because of somebody who wasn’t there: U.S. President-elect Barack Obama.The 21 leaders endorsed last weekend’s agreement by major world economies to resist domestic pressures to protect industries, while ensuring that small and medium-sized companies have enough credit to stay afloat.

“We strongly support the Washington Declaration and will refrain within the next 12 months from raising new barriers to investment or to trade in goods and services (and from) imposing new export restrictions,” leaders of the Asia-Pacific Economic Cooperation forum said in a joint declaration.

They also pledged to reach agreement next month on the outlines of a World Trade Organization pact that collapsed in July after seven years of negotiations. Concern over the global financial crisis injected new urgency into the so-called Doha round of trade talks.

Repossession of homes up by 12%

The number of properties repossessed by mortgage lenders rose by 12% to 11,300 in the third quarter of the year, the Council of Mortgage Lenders (CML) said.

The number of borrowers in arrears also went up compared with the previous quarter, by 8% to 168,000.

The number of repossession orders made by the courts in England and Wales rose by 3% to 29,516 in the same period.

The figures suggest that many more people are likely to lose their homes as the economy falls into recession.

"The government is taking action to protect the most vulnerable families from repossession," said the Housing Minister Margaret Beckett."[This includes] a new court protocol to make sure lenders are exploring all avenues before making a claim in the courts, a £200m mortgage rescue scheme, more free legal representation in county courts, and more free debt advice."

Worsening picture

Repossessions have risen as more people struggle to meet their mortgage repayments as low-interest rate deals come to an end and unemployment rises.

CML director general Michael Coogan said his organisation's forecast of 45,000 repossessions this year had not changed in the light of the latest figures, but it would be "premature" to predict what might happen in 2009.

He said it was not generally in lenders' interests to repossess properties and the government needed to play its part with measures to ease the situation in the Chancellor's Pre-Budget Report.

"Conditions in the wider economy suggest a worsening picture for mortgage arrears, however carefully lenders handle their treatment of borrowers in difficulty," he said.

Buy-to-let

The CML figures suggest that life has suddenly become tougher for buy-to-let (BTL) landlords as arrears among them are now higher than among mortgage borrowers generally.

"Reasons include falling rents and an over-supply of rental property in some areas, resulting in some landlords being unable to let their property or achieve high enough rents to support their borrowing commitments," the CML explained. "Fraud is also likely to have been a contributory factor," it added.

The figures show that 1.58% of BTL loans were now behind with repayments in the third quarter of the year, compared with 1.44% of all mortgages.

However the number of BTL landlords who saw their properties repossessed was, at 900, just the same as in the first and second quarters of 2008.

They amounted to just 0.08% of all BTL mortgages, compared with the slightly higher repossession rate of 0.1% for all mortgages holders.

The CML warned though that this lower BTL repossession rate "is unlikely to be maintained".

Court action

The Ministry of Justice (MoJ) figures - also released on Friday - reveal the situation earlier in the repossession process when lenders first go to court for permission to take back a mortgaged property.

The figures for England and Wales show that repossession claims - the first stage of the process - were 1% lower than in the second quarter of the year at 38,511, but 9% higher than the third quarter last year.

However the number of court orders then being made by county court judges was up 3% over the quarter, putting them 24% higher than at the same stage last year.

Not all of these will lead to actual repossessions - nearly half were suspended - as an agreement is often then reached between the lender and the borrower.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said that he doubted repossessions had peaked, even though the number of repossession claims had fallen.

Claims will rise as people lose their jobs and buy-to-let landlords face rising mortgage costs and falling rents, he said.

Last slump

While the number of homes being seized by lenders has started to rise steeply in the past few years, they are still nowhere near as high as in the depths of the last property slump in the early 1990s.

The number of repossessions this year now stands at 30,200.

This is higher than the 26,200 for the whole of last year, and far higher than the figure of just 8,200 in 2004.

By contrast 75,500 homes were taken back in 1991.

Adam Sampson, chief executive of Shelter, said: "Lenders may claim they are using repossessions as a last resort, but they must not pat themselves on the back too soon as both repossessions and arrears are still continuing to rise."

About 5,000 properties a week are being put up for sale by people struggling with their mortgage repayments, the National Association of Estate Agents (Naea) said, also on Friday. A survey of its members reported that more than half said at least 20% of their clients had been forced into the sale by financial difficulty.

"It is those homeowners who were on cheap fixed-rate mortgage deals who cannot replace them and are struggling with the rise in repayments," Naea chief executive Peter Bolton King said.

Honda Swindon closing for 50 days

Honda has announced plans to cut production at its plant in Swindon, which will close for 50 days next year.

Honda said it plans to make 61,000 fewer vehicles in Japan and Europe as it struggles to cope with slowing global demand.

It will make 21,000 fewer vehicles at the Wiltshire plant, home to the popular Civic model.

The 50-day shutdown will mean the Swindon plant will close for the whole of February and March 2009.

The company said that there are "no plans for redundancies" at the Swindon plant.

"This is unexpected bad news," said Jim D'Avilia, labour union Unite's regional officer.

"The union, staff and the company need to work together to minimise any financial hardship and to find ways to protect pay and long-term job security," he added.

The car maker had already announced plans to stop production at the plant for 13 days during the two months. The extension of this period means that no vehicles will be produced in Swindon during February and March.

Dramatic cuts

Earlier this year, Honda announced that it would cut output at Swindon by 32,000 units. With Friday's announcement of further production cuts, the Swindon plant will now produce 175,000 vehicles this financial year, down 23% from an original forecast of 225,000 vehicles.

Friday's announcement also means that Honda will have reduced its overall global annual vehicle production by 150,000 vehicles.

Rival Japanese carmaker Toyota is also suffering from the economic slowdown. It announced on Friday plans to cut its domestic temporary workforce in half.

"We will not be renewing contracts for 3,000 of our temporary workers at the end of March 2009," the company said.

Mazda, another of Japan's largest car markers, announced on Thursday that it would cut 1,300 jobs and cut production for the current year by 48,000 units.

Isuzu, one of Japan's biggest truck makers, also announced on Thursday that it would cut 1,400 domestic jobs and cut production for the year by 10%.

Tough economic conditions and banks' unwillingness to lend money mean global demand for cars is slowing dramatically.

In the US, General Motors, Ford and Chrysler are seeking a cash injection from the government after a collapse in sales.

Hard-up GM to sell Suzuki stake

General Motors is selling its 3% stake in the Japanese carmaker Suzuki for $230m (£156m) to raise cash.

Suzuki said it would buy back the stake, adding that it understood GM faced a need to secure funding.

GM has reported a net loss of $2.5bn in the third quarter and has been trying to secure an emergency government loan along with its Detroit competitors.

The "Big Three" US car firms Chrysler, Ford and GM are seeking a total $25bn in federal aid.

Suzuki, which specialises in small cars, said the two companies would continue to cooperate in a number of joint projects, including developing new technologies. Their partnership started in 1981.

"We understand full well that GM faces a need to sell its shareholdings to secure funding," Suzuki said.

The US carmaker had already sold a 17% stake in Suzuki, in 2006.

US car firms companies have been hit by falling US sales and growing losses.

GM has said it would cut jobs and costs and has also suspended merger talks with Chrysler to focus on current issues.

Obama names Geithner, Summers to economic posts

AP sources: Obama names Geithner to treasury, Summers as head of National Economic Council

NEW YORK (AP) -- Obama transition officials say the president-elect has chosen New York Federal Reserve President Timothy Geithner to be treasury secretary.

Obama has also named Lawrence Summers, a former treasury secretary under Bill Clinton and one-time president of Harvard University, to lead the National Economic Council.

Both men will appear with Obama at a press conference in Chicago Monday. Geithner will be the top Cabinet official leading the Obama administration's response to the global economic crisis and credit crush.

Summers will advise Obama from the White House. He'll direct the response to the economic meltdown across federal agencies.