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U.S. consumer confidence plunged to a record low in October amid signs the economy is sliding into a deep recession, threatening to pull the rest of the world along with it.

Investors expect the United States to slash interest rates on Wednesday, with Europe and Britain likely to follow next week, as policy-makers in the world’s major economies fight to head off a prolonged slump.

The Nikkei business daily said the Bank of Japan was also considering a 25 basis-point interest rate cut to underpin the economy, pushing the dollar and the euro up against the yen.

Iceland hiked interest rates massively in a desperate attempt to defend its currency from the global turmoil. The move will help secure aid from the International Monetary Fund, which is also crafting plans for Hungary and Ukraine as the crisis sweeps developing economies.

The Bank of England said financial markets appeared to have priced in losses of $2.8 trillion from the credit crisis, equal to more than two years of U.S. corporate profits, but the BoE said actual losses may be much less than that.

A Federal Reserve cut will be too late to save depressed U.S. consumer confidence, which plunged in October to the lowest in the 40-year history of the Conference Board survey. Companies slashed jobs and retirement savings evaporated during the month, which is on track to be the worst for Wall Street in more than 60 years.

“Consumers are completely shut down at this point,” said Lindsey Piegza, a market analyst at FTN Financial. “They see no end in sight even with all the actions that the government has taken one hour cash.”

ECONOMY DOMINATES U.S. ELECTION

The economy dominates the U.S. presidential election which takes place November 4. Republican presidential nominee John McCain and Democratic candidate Barack Obama traded attacks on each other’s tax plans on Tuesday.

Polls show voters trust Obama more on the economy and he leads in national surveys and important swing states.

The current crisis has its origins in the bursting of the U.S. housing bubble and data showed prices of U.S. single-family homes continue to plummet, falling a record 16.6 percent in August from a year earlier.

Whirlpool Corp, the world’s biggest appliance maker, said it will cut 5,000 jobs, adding to the gloom. It posted lower than expected quarterly profit and slashed its 2008 earnings outlook.

The world’s biggest mutual fund company, Fidelity Investments, said it was reviewing its costs and staffing following an industry report that said as many as 4,000 jobs, 9 percent of its workforce, could be cut.

There were some hopeful signs, including a drop in closely watched rates on loans between banks, showing efforts by central banks to lower borrowing costs were making progress. However, a further reduction was needed to restore the financial system to normal functioning.

Global stocks rallied back from five-year lows, with Wall Street rising more than 5 percent. 

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VIENNA,–OPEC said at an emergency meeting yesterday that it will slash oil production by 1.5 million barrels to stem the "dramatic collapse" of oil prices, but crude prices plunged 5 per cent anyway as financial markets fell across the globe.

Demand for crude has evaporated and the supply levers held by the Organization of Petroleum Exporting Countries appear to have little influence in the current economic climate.

Iran and Venezuela pushed for a cut of two million barrels a day, but there were concerns among other OPEC members that a more severe production cut would exacerbate a deteriorating economic crisis and further destroy demand.

OPEC officials, however, signalled they were prepared to slice deeper quickly if crude continues its freefall.

The world’s biggest crude consumer immediately blasted OPEC.

"It has always been our view that the value of commodities, including oil, should be determined in open, competitive markets, and not by these kinds of anti-market production decisions," White House deputy press secretary Tony Fratto said http://payday-z.com. "The high oil prices from the past year contributed to the slowdown in demand and the subsequent downturn in the economy, and we would ask that everyone keep that in mind going forward."

OPEC is already producing 300,000 barrels a day above its own quota of about 29 million barrels.

If that overproduction is stopped, and all members comply with the 1.5 million cut, OPEC would produce about 1.8 million fewer barrels of oil a day.

OPEC said it was ready to slice production again quickly if yesterday’s decision does not end the price free fall.

OPEC president Chakib Khelil said OPEC was ready to convene another emergency session before its next planned gathering in December in Algeria "if there are further decisions that have to be made.

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PNC Financial Services Group Inc. this morning announced that it is buying National City Corp. for $2.23 a share, or $5.2 billion in PNC stock. The deal represents a 7.1 percent discount to National City’s Thursday closing price.

In addition, PNC said it would pay $384 million in cash to certain National City warrant holders.

To help support the deal, PNC is selling the federal government $7.7 billion in preferred stock and related warrants, tapping into the government’s $700 billion rescue plan for the nation’s banking system.

The acquisition of National City, which has 60 branches in the St. Louis area, will increase PNC’s deposit base to $180 billion, making it the fifth largest U.S. bank by deposits.

In addition to ranking fifth nationally in deposits, the combination with National City is expected to place PNC fourth among U.S. banks in number of branches. Pittsburgh-based PNC has no branches in the St. Louis area.

PNC said it expects to incur merger and integration costs of approximately $2.3 billion. PNC said it expects the merger will result in savings of $1.2 billion through the elimination of operational and administrative redundancies.

Under terms of the agreement, PNC will acquire all outstanding shares of common stock of National City in a stock-for-stock transaction, which has been approved by the boards of both companies http://full-free-credit-report.com.

Based on PNC’s closing stock price of $56.88 on Thursday, the exchange of 92 million shares values each share of National City’s common stock at $2.23. The transaction is currently anticipated to close by Dec. 31. The merger is subject to approval by shareholders and regulatory approval.

Speculation has been growing that National City would be acquired.

The Cleveland-based bank on Tuesday said it planned to cut 4,000 jobs as the bank continues to struggle amid the ongoing downturn in the mortgage and credit markets. The bank reported a $5.15 billion third-quarter loss.

Problems in the mortgage and real estate markets since the middle of 2007 have hit National City especially hard.

National City set aside $1.18 billion during the third quarter for loan-loss provisions, compared with provisions of $368 million during the same quarter a year earlier. Loan-loss provisions declined from the previous quarter, when National City set aside $1.59 billion to cover potential losses.

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Foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to a monthly report by research firm RealtyTrac.

Foreclosure filings — default notices, auction sale notices and bank repossessions — fell by 12 percent from August to 265,968 in September, according to RealtyTrac, which records property in various stages of foreclosure.

That means one in every 475 U.S. households received a foreclosure filing in September, the firm said in its report released on Thursday.

“Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures,” James Saccacio, RealtyTrac chief executive, said in a statement.

Most significantly, a California law that requires lenders to make contact with borrowers at least 30 days before filing a Notice of Default (NOD) took effect in early September http://payday-loans-application.com. The state saw a drop 51 percent from the previous month, according to RealtyTrac. That helped drive the national rate down, given that California accounts for close to a third of monthly U.S. foreclosures.

A new law in North Carolina resulted in a 66 percent drop in notices of defaults in September in that state.

However the reprieve may be short-lived. After a Massachusetts law requiring lenders to give homeowners 90-days to become current before initiating foreclosure proceedings took effect in May, the foreclosure rate dropped. But three months later initial foreclosure filings jumped and were back near levels seen a year earlier, RealtyTrac said.

The markets that once lead the housing boom topped the foreclosure list in September. 

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Gasoline prices fell overnight, moving to within 3 cents of the $2.90 a gallon mark after sliding below $3 over the weekend, a survey for the American Automobile Association showed Monday.

The national average price for a gallon of regular gas fell to $2.923 from $2.954 the day before, according to AAA’s Daily Fuel Gauge Report, the 33rd straight day that prices have declined.

Gas is down 22% from a month ago and nearly 30% from July’s peak price of $4.114 a gallon.

On Saturday, the average price dropped below $3 a gallon for the first time in nearly nine months.

Gas prices in Alaska averaged $3.887 a gallon - the highest in the nation. The state with the cheapest gas was Oklahoma, where a gallon of gas averages $2.485.

The decline comes as the price of oil has fallen sharply. Oil, which makes up about half of the price of gasoline, is down 50% over the last few months as investors fear a global recession will undermine demand for energy no fax payday advances.

But the price of oil rose above $74 a barrel in premarket trading Monday after settling at $71.85 a barrel Friday. The rebound comes ahead of an expected production cut by the Organization of Petroleum Exporting Countries.

The cartel, which controls two-thirds of the world’s oil supplies, is set to hold an emergency meeting that begins Oct. 24 in Vienna.

OPEC ministers have expressed concern over the rapidly declining price of oil. Chakib Khelil, OPEC’s president, said Sunday that members are considering a "substantial" cut and that the oil market is oversupplied by about 2 million barrels a day.  

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WASHINGTON–U.S. President George W. Bush on Saturday sought to reassure Americans about the cost and scope of the country's financial bailout plan and said that in the long run "our economy will bounce back."

Bush, in his weekly radio address, acknowledged that people are concerned about their finances and, while he offered assurances about an eventual recovery, he did not say when that would happen.

Since Oct. 9, 2007, when the Dow topped 14,000, investors have lost $8.3 trillion from pension funds, college savings plans, 401(k)s and other investments.

"The federal government has responded to this crisis with systematic and aggressive measures to protect the financial security of the American people," Bush said. "These actions will take more time to have their full impact. But they are big enough and bold enough to work." Congress authorized a $700-billion package to buy bad assets from banks and other institutions to shore up the financial industry.

Bush was to meet later Saturday at Camp David for talks on the economy with French President Nicolas Sarkozy and European Commission president Jose Manual Barroso, who were to stop in the United States on their way home from a summit in Canada.

In the Democrats' weekly radio address, Representative Rahm Emanuel used the occasion for campaign criticism against John McCain, the Republican presidential nominee.

"On weekends like this, maybe you're like me and my neighbours, working around the house, trying to save a few bucks," said Emanuel, the chairman of the House Democratic caucus. "My neighbours and yours are struggling in this economy. They're working as hard as they know how, but the economic policies that George Bush proposed and John McCain supports have left them working harder, paying more and making less low rates payday advance."

White House press secretary Dana Perino said the Camp David meeting was not expected to produce any new policy decisions or the date or place for a planned meeting of leaders of major economic powers, the so-called Group of Eight. Instead, she said it would focus on efforts extending as far back as April on co-ordination for financial stability through measures such as bank disclosures, accounting rules at credit rating agencies, capital standards and asset valuation.

The bailout plan runs counter to Bush's oft-stated commitment to free enterprise and the president said he knew many Americans have reservations about the government's approach, particularly the Treasury's planned injection of up to $250 billion in U.S. banks in return for partial ownership stakes, something that hasn't been done since the Great Depression of the 1930s.

"As a strong believer in free markets, I would oppose such measures under ordinary circumstances," the president said. "But these are no ordinary circumstances. Had the government not acted, the hole in our financial system would have grown larger, families and businesses would have had an even tougher time getting loans and ultimately the government would have been forced to respond with even more drastic and costly measures later on."

Bush said the government's involvement was limited in scope and Washington will not exercise control over any private firm and federal officials will not have a seat on bank boards. He also said he believed that the final cost to taxpayers would be significantly less than the initial investment as the housing market recovers.

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The Treasury could pump $250 billion into U.S. banks in what Federal Reserve Chairman Ben Bernanke called on Tuesday a comprehensive attempt to end the credit crisis, restoring market confidence and sending Tokyo stocks up 14 percent.

Japan, which forced its big banks to write off billions of dollars in bad loans earlier this decade with state help, said it could inject public funds into regional banks to make sure that small firms facing a credit crunch can find cash.

The Treasury is due to unveil its plan at 8:30 a.m. EDT, with about half of the total figure likely to go to the top nine U.S. banks alone as part of a capital infusion aimed at getting banks to lend to each other again, people familiar with the plan said.

Fed Chairman Bernanke said in an article published on the Wall Street Journal’s website that the measures, which he did not detail, constituted a broad-based attempt to end the crisis.

“These steps will allow us to restore more normal market functioning and encourage private capital to further support the reinvigoration of financial markets,” he wrote payday advance.

The U.S. move follows pledges of more than 1 trillion euros ($1.36 trillion) by Britain, Germany, France and other European countries to bolster their banks.

Many countries have also taken action to reassure savers by guaranteeing bank deposits. South Korean Finance Minister Kang Man-soo was quoted as saying Korea could raise guarantees on deposits and might even guarantee banks’ foreign currency debt.

In response to the global moves, Japan’s Nikkei soared 13.8 percent when Tokyo reopened after a holiday and MSCI’s index of Asia-Pacific stocks outside Japan rose nearly 7 percent after hitting its lowest since December 2004 on Friday. 

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REYKJAVIK–Iceland has sought to reassure international investors caught in its banking meltdown, saying it aimed to meet its obligations despite the turmoil that has ravaged a once-vibrant financial sector.

British officials were due to hold talks today with Icelandic authorities on dealing with the estimated £1 billion of British deposits trapped in Iceland’s collapsed banks.

"The Icelandic government of course intends to honour its obligations," Prime Minister Geir Haarde told a news conference in Reykjavik, without giving details.

The Dutch government accused Iceland of insufficiently supervising Icelandic bank Landsbanki’s Icesave business in the Netherlands.

A deal to sell most of Landsbanki’s overseas corporate finance and brokerage business to Iceland’s Straumur-Burdaras investment bank fell through yesterday.

Iceland also said it will start negotiations with Russia on Tuesday to secure a four billion euro, $6.3 billion (Canadian), loan.

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A utility consultant recommended more than 150 improvements to make St. Louis-based Ameren Corp.’s Illinois electric grid less prone to the kind of mass power outages that left hundreds of thousands of customers in the dark following storms in 2006.

The audit by Liberty Consulting Group was presented to the Illinois Commerce Commission during a meeting Wednesday in Chicago. The ICC in December 2006 ordered an investigation of Ameren’s network of poles and wires and its system for restoring power following a storm.

The 585-page audit identified dozens of areas for improvements, some of which the utilities — AmerenIP, CIPS and Cilco — have already taken steps to address. It said the overall condition of Ameren’s electric delivery system was "reasonably good."

"Overall, Liberty found that Ameren companies have done an acceptable job" of building and maintaining their electric distribution system, said Bob Stright, a principal of the Pennsylvania-based firm.

Ameren Illinois spokeswoman Victoria Busch said the utilities, which sell electric service to 1.2 million customers in the southern two-thirds of the state, cooperated with Liberty to help prepare the report and they continue to make improvements recommended in the audit. Many focus on responding better to storm-related outages, such as improving the call center and telephone systems.

The audit showed Ameren’s infrastructure was generally in good shape. "But there is room for improvement," she said.

High winds that accompanied thunderstorms on July 19 and 21, 2006, knocked out power for 300,000 Illinois customers for as long as 10 days, and an ice storm at the end of November snapped limbs and trees and led to 370,000 outages in Illinois for up to eight days. Fueled by angry customers and politicians, the commission ordered the investigation less than a week later.

Hundreds of thousands of AmerenUE customers in the utility’s home state also lost power during the 2006 storms for days at a time. Subsequent investigations by the Missouri Public Service Commission staff led regulators to adopt new rules that establish electric reliability standards and require utilities to file reports on infrastructure and tree-trimming activities.

In Missouri, AmerenUE is spending $100 million a year to "harden" its electric distribution system to make it more storm proof instant cash advance no fax. The spending is part of a larger capital spending plan called "Power On."

In Illinois, Ameren’s primary lapse was lack of oversight of its tree-trimming contractors, according to the Liberty audit. The utilities couldn’t have avoided some damage, but a better job trimming and removing trees can improve reliability and minimize the impact of future storms.

"Better tree-trimming would have reduced the number of outages," Stright said. "Ameren needs to inspect more of its contractors’ work."

The Liberty report also said Ameren didn’t systematically inspect electric poles for strength, likely contributing to the number of outages. And while inspectors found that the utilities worked hard to restore service following the storms, the company’s call center experienced "significant failures" that frustrated customers.

Liberty was hired by the commission and is being paid by St. Louis-based Ameren, according to a copy of the August 2007 contract between the firm and the ICC. It calls for Liberty to be paid up to $2.9 million, including continued monitoring of Ameren’s progress for up to three years, ICC spokeswoman Beth Bosch said.

The audit was delivered to the ICC staff on Aug. 15, but not presented to the commission until Wednesday — two weeks after the ICC approved a $162 million electric and natural-gas rate increase for Ameren.

Bosch said the audit wouldn’t have been a consideration in the rate case even if it had been presented to the commission earlier.

David Kolata, executive director of the Citizens Utility Board, disagreed. Such performance audits may be considered by regulators when setting rates, but it’s uncertain whether the Liberty audit would have had an impact on the commission’s decision in Ameren’s last rate request.

Nonetheless, problems identified in the audit shouldn’t sit well with Ameren customers, many of whom began paying more for electric service last week.

"The consumers that we talk to are skeptical about Ameren," he said. "This raises more red flags."

Kevin McDermott of the Post-Dispatch contributed to this report.

jtomich@post-dispatch.com | 314-340-8320

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The Nikkei average plunged 9.4 percent on Wednesday, its biggest drop since the 1987 stock market crash, as growing fears of a global recession led investors to wipe $250 billion off the value of Tokyo shares.

Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) tumbled more than 11 percent on growing expectations that the crisis would bite deeper into its profits, while the yen hit a six-month high against the dollar, adding to the pressure on exporter shares.

Panic over the fast-spreading financial crisis dragged down markets across Asia, with Japanese steelmakers such as Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) sliding, as the Nikkei set another five-year closing low. It has lost 19 percent in the past five days.

“The deteriorating outlook for the economy and the deepening financial crisis are pushing fear to its limit,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management (payday loans).

“Investors want to dump shares as their willingness to take risks has shrunk, but no one wants to buy even if stocks are valued cheaply.”

The yen climbed to a six-month high against the tumbling U.S. dollar, as investors stampeded away from stocks and risky positions. <FRX/>

The Nikkei posted its biggest one-day fall since a 14.9 percent drop on October 20, 1987, the day after Black Monday, and logged the third-largest one-day drop ever.

The Indonesia Stock Exchange halted trading on Wednesday after the benchmark composite index .JKSE dropped more than 10 percent, while Hong Kong’s main stock market index .HSI dropped more than 5 percent. 

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