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New York City commercial real estate transactions plunged 61 percent in 2008 through October as the global credit crisis roiled lending and sidelined buyers.

About $17 billion of transactions have closed so far and the market is headed for its worst year since 2004, according to data from Real Capital Analytics Inc. of New York. Sellers have made 237 deals of $5 million or more, a four-year low in a market that posted a record $51 billion in sales in 2007.

“The banks are not lending, and most of them are saying we're done for the year,'' said Scott Latham, executive vice president for New York investment sales at Cushman & Wakefield Inc., the largest closely held commercial brokerage. “In all likelihood, you will see next to no transactions between now and the end of the year.''

The property recession that began in housing during 2006 is spreading to the commercial market. About 85 percent of domestic banks tightened lending standards on commercial and industrial loans to large and mid-size firms in the past three months, the highest since the Federal Reserve's Senior Loan Officer Survey began in 1991, the Fed said yesterday. Financial firms have recorded writedowns and losses of more than $680 billion.

The office market will likely get worse in 2009 and may not improve for at least another year, said Andrew Simon, executive managing director for the New York City office of NAI Global, a worldwide network of 325 independent commercial property brokerages. The bankruptcy of Lehman Brothers Holdings Inc., the takeover of Merrill Lynch & Co. and the city comptroller's forecast that New York may lose as many as 165,000 jobs are also weighing on the market.

No Rosy Outlook

“I don't think the first half of 2009 is going to be very rosy,'' said Simon. “I believe you're talking about a year from now before you see more movement toward normalcy.''

Buyers and sellers are looking for a bottom, he said.

“People are going to be waiting on the sidelines until a floor is established,'' said Simon. “People aren't going to sell unless they have to sell. Unless that floor is established you will not see significant sales.''

With no letup in sight for the property industry, investors have dumped real estate investment trusts focusing on offices.

The 14-member Bloomberg Office REIT Index lost 43 percent in the 12 months through October, led by Maguire Properties Inc. and SL Green Realty Corp., which together control almost 50 million square feet of office space in the Los Angeles and New York metropolitan areas.

Sales Fall

SL Green, the biggest owner of Manhattan office buildings, has dropped 65 percent in the 12 months through October. Maguire, the largest owner of downtown Los Angeles office towers, has plunged 87 percent and is the worst performer in the index.

Global commercial sales fell 57 percent this year through August, Real Capital said in an Oct. 9 report. In the third- quarter, they fell 64 percent from the same period a year ago, according to preliminary data from the company.

In the U.S., sales have declined 72 percent this year through October, the biggest drop since the firm's recordkeeping began in 2001, Real Capital said. Starting in 2004, property investors, fueled by cheap and abundant debt, began an unprecedented run to $514 billion of U.S. deals in 2007, said Dan Fasulo, Real Capital's director of market analysis.

“I think it will be a while before we get to that figure again,'' Fasulo said. “We're going to do less than half of that in 2008.''

`Disastrous' September

September was “disastrous'' for the financial and commercial property markets, Real Capital said bad credit cash loans. Office sales totaled $13.4 billion in the third quarter in the U.S., the lowest since the first quarter of 2004. Sales for all of 2008 aren't likely to exceed the volume of the first quarter of 2007.

“Until we have some kind of watershed transaction that gives people a sense of what the market is, you're not going to see a lot of transactions,'' Lynne Sagalyn, director of the Paul MilsteinCenter for Real Estate at Columbia University, said in an interview.

Sales involving New York real estate investor Harry Macklowe, perhaps commercial real estate's most prominent casualty of the credit crisis, accounted for more than two- fifths of New York's year-to-date dollar figure through October.

Macklowe paid $6 billion last year for seven Midtown skyscrapers, primarily using short term debt. His lender, Deutsche Bank AG, took control of the towers in February and sold five of them for $2.83 billion. Macklowe also sold the General Motors Building and three other buildings for $3.97 billion to Mortimer Zuckerman's Boston Properties Inc.

Mortgage Originations Sink

Second-quarter commercial and multifamily mortgage originations tumbled 63 percent in the second quarter from the same period a year earlier, according to the Mortgage Bankers Association in Washington.

Office property loans fell 65 percent, retail property loans fell 63 percent and industrial property loans slid 57 percent, the MBA said. Loans slated for the commercial mortgage- backed securities market declined 98 percent in the second quarter from a year earlier, the group said.

Financing of deals by so-called portfolio lenders, companies like commercial banks and life insurers that originate loans and keep them on their books, was also down. Loans by banks fell 29 percent and 27 percent for insurers, the MBA said.

The few deals being made usually require sellers to either provide financing or allow buyers to take over their existing loans, said Howard Michaels, chairman of the New York-based Carlton Group LLC, a real estate investment banking firm, which arranged the recapitalization of the GM Building for Macklowe in 2004, and Chicago's Sears Tower in 2007.

Wachovia Sale

At 1372 Broadway, a 20-story pre-World War I office building in New York's Garment District, buyer Lloyd Goldman received financing for 86 percent of the tower's cost from the seller, Wachovia Corp., the lender being acquired by Wells Fargo & Co.

Wachovia and partner SL Green sold the building for $274 million, $61 million less than what they paid a year before, according to city records. The price dropped $20 million from the signing of the contract in July and last month's closing, said people familiar with the transaction.

A standoff between sellers and buyers over price appears to be stalling the market, said Michaels.

“Most people are waiting to see how 2009 shakes out. Until then, nobody's putting any buildings on the market unless they have to.'' he said. “I don't think that anybody would voluntarily sell into this market right now.''

Two properties remain on the market five months after they went up for sale. They are Worldwide Plaza on Eighth Avenue, a 1.7 million square-foot tower, and 1540 Broadway in Times Square, the former Bertelsmann Building.

The seller of both buildings: Harry Macklowe's lender, Deutsche Bank.

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U.K. consumer confidence dropped in October close to the weakest level since at least 1974 as the financial crisis spooked British shoppers, GfK NOP said.

An index of sentiment, based on a survey of 2,002 people between Oct. 3 and Oct. 19, fell 4 points from the previous month to minus 36, GfK said today in London. A gauge of consumers' willingness to make major purchases dropped 11 points to minus 42, the lowest since the series began in 1974.

House prices fell from a year earlier by the most since at least 1991 this month as banks tightened their grip on credit, Nationwide Building Society said yesterday. Policy makers will probably lower the benchmark interest rate by a half point to 4 percent next week, after they voted for an emergency cut on Oct. 8 to save the financial system from collapse, economists say.

“The turmoil surrounding the banking world and subsequent turbulence in the financial markets is making for an uncertain time,'' Rachael Joy, a spokeswoman for GfK, said in a statement. “Even the reduction of the interest rate and lower petrol prices are unlikely to have a significant effect on confidence in the upcoming months as consumers brace themselves.''

The pound dropped against the dollar today, heading for the biggest monthly decline in 16 years. The currency traded at $1.6228 as of 8:59 a.m. in London, down from $1.6451 yesterday.

Job Cuts

Retail sales in Germany fell 2.3 percent in September, the biggest decline since May 2007, a separate report showed today. Economists forecast a drop of 1 percent, according to the median of 15 estimates in a Bloomberg News survey.

Twenty-six percent of U.K. employers have backup plans to cut even more workers than currently intended in the next 12 months, a survey of 721 companies by KPMG and the Chartered Institute of Personnel and Development showed today freecreditreport. About one in five of those surveyed will seek to shed staff over 65, the age at which they can force employees to leave without providing a business reason, the report said.

The GfK consumer confidence gauge was last lower in July, when it reached minus 39, the weakest in at least 34 years.

A gauge of the general economic situation over the past 12 months fell 10 points to minus 72, the survey showed. An index measuring Britons' personal financial situation in the next year fell one points to minus 12, GfK said.

The financial crisis has crippled Britain's banking industry, forcing the government to buy stakes in some of the country's biggest lenders and ramp up public spending.

1929 Crash

U.K. policy maker David Blanchflower said this week the current crisis may turn out to be “more significant'' than the aftermath of the 1929 stock market crash. He said that the economy faces a recession for the next year and warned it will deepen if the central bank doesn't cut interest rates “significantly.''

The economy shrank 0.5 percent in the third quarter, the largest contraction since 1990. Unemployment rose in September, with jobless claims reaching the highest in almost two years.

The Bank of England will cut the benchmark interest rate by at least a half point at the next scheduled meeting on Nov. 6, according to 36 economists in a Bloomberg News survey.

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Australia will give pensioners, home buyers and families A$10.4 billion ($7.3 billion) in a spending package to boost the economy as the global financial crisis freezes credit and slows growth.

Prime Minister Kevin Rudd will use half the government's estimated budget surplus to encourage consumer spending and bolster the economy, which grew at the slowest pace in more than three years in the second quarter as the housing market slumped, retail sales dropped and stock markets tumbled.

“This strategy will strengthen the national economy and support Australian households, given the risk of a deep and prolonged global economic slowdown,'' Rudd told reporters in Canberra today.

The spending package follows moves this week by Rudd and his Treasurer Wayne Swan to guarantee all deposits and “term wholesale funding'' among the nation's banks. They also doubled the government's investment in residential mortgage securities to A$8 billion in a bid to unlock credit. Australia's central bank pre-empted global interest-rate cuts last week.

“This package could boost economic growth by 0.9 percentage point in the fourth quarter of this year and the first quarter of 2009,'' said Riki Polygenis, an economist at Australia & New Zealand Banking Group Ltd. in Melbourne.

Stocks Surge

The Reserve Bank of Australia in August said the economy would expand 2 percent in 2008, slowing from 4.3 percent in the previous calendar year.

Australian stocks surged for a second day, led by banks, energy and resources companies, on speculation U.S. measures to rescue the financial system will help revive the global economy. The benchmark S&P/ASX 200 Index has gained 10 percent this week, rebounding from its worst week since 1987.

The government will spend A$4.8 billion on cash payments to the elderly, A$3.9 billion on one-off handouts to families and A$1.5 billion on increased grants to first-home buyers, Rudd said. It aims to boost consumption and investment as financial turmoil slows job growth and the A$1 trillion economy.

Rudd will fund the spending from the 2008-09 budget surplus, forecast in May at A$21.7 billion. Today's measures will leave a “comfortable'' surplus, he said.

In December, single pensioners will get a A$1,400 payment and couples a A$2,100 bonus under today's package. That will flow to 4 million pensioners, Rudd said.

Home-Buyer Grants

A first-home-buyer's grant will double to A$14,000 for existing houses and triple to A$21,000 for newly built dwellings, a benefit to go to some 150,000 people.

About two million low-income families will receive a A$1,000 payment for each child under their care. The government also will fund an extra 56,000 training places in the workforce to boost employment.

European nations have committed 1.3 trillion euros ($1 guaranteed approval cash advance loans.8 trillion) to guarantee bank loans and take stakes in lenders amid the global credit crisis. Britain took majority stakes in Bank of Scotland Group Plc and HBOS Plc as a global lending freeze threatens to push the world into recession.

The U.S. will spend $700 billion buying toxic bank debt and possibly recapitalize banks. Federal Reserve Chairman Ben S. Bernanke led co-ordinated interest-rate cuts around the world last week. The Reserve Bank of Australia earlier cut its benchmark rate by 1 percentage-point to 6 percent, the biggest reduction since a recession in 1992.

Spending Contracts

The RBA will cut its overnight cash rate target by 50 basis points at its next meeting on Nov. 4, according to a Credit Suisse index based on overnight swaps trading.

Australian home-loan approvals dropped in August to a seven-year low, cited as one of the reasons Reserve Bank Governor Glenn Stevens reduced rates to the lowest in almost two years. The rate cut reduced monthly payments on an average A$250,000 mortgage by almost A$140.

The construction industry contracted at a record pace in September as work was cut on commercial and apartment buildings. Building work has been shrinking for seven months.

Spending by households contracted by 0.1 percent in the second quarter, the first decrease since 1993, slowing gross domestic product to 0.3 percent from the previous three months.

“This is a significant fiscal stimulus,'' opposition Liberal-National coalition leader Malcolm Turnbull told reporters in Canberra after today's package was announced. “It will provide stimulus to the economy, that's for certain.''

Stocks surged across Asia today on more expected action by the U.S. to help credit markets.

`Dramatic Change'

The U.S. government will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for stakes in nine major banks, people briefed on the matter said.

The S&P/ASX 200 Index of Australian stocks rose 3.7 percent as of 2:38 p.m. in Sydney. Australia & New Zealand Banking Group Ltd. led financial stocks higher, surging 6.1 percent. BHP Billiton Ltd., the world's largest mining company, gained 3.8 percent.

“Things have changed dramatically in the past couple of weeks,'' Treasurer Wayne Swan, who today returned to Canberra from the U.S., told reporters in Canberra.

Slower global growth has slashed prices for commodity exports that have fueled Australia's 17-year economic boom.

The International Monetary Fund's World Economic Outlook last week forecast global economic growth will slow to 3 percent in 2009, a world recession under the fund's informal definition.

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The dollar sank against most foreign currencies Tuesday, as the still-frozen credit markets led a majority of investors to believe the Federal Reserve will step in with rate cuts, in addition to buying loans crucial to business.

In a speech before the National Association of Business Economics in Washington on Tuesday, Fed Chairman Ben Bernanke signaled that the U.S. central bank may be getting ready to cut interest rates. He said the Fed will consider the appropriateness of its monetary policy given the state of the economy.

The Fed announced earlier Tuesday it would take action to backstop the commercial paper market, by purchasing companies’ short-term debt. That sparked more speculation that the bank needs to cut rates in its meeting Oct. 29 - or even before that in emergency action.

On the Chicago Board of Trade, futures indicated a 48% chance that the Fed will lower its rate to 1.5% from 2%, and the futures showed a 58% chance that the rate will be cut to 1.25%.

The U.S. central bank could choose to lower its key funds rate, which is a rate banks charge other banks to borrow money, in an attempt to further encourage lending and thereby return the normal flow of credit to businesses.

But rate cuts are also inflationary, worrying dollar investors that their investments will devalue over time as the Treasury prints more money.

Euro: Due partly to these concerns, the euro traded at $1.3615 as of 4 p.m. ET. That’s up from $1.3498 on Monday. At one point on Monday, the euro hit $1.3443, the lowest level the currency has seen since Aug. 20, 2007.

But while investors seem to expect the United States to cut rates, they aren’t quite holding their collective breath yet for Europe to do the same.

"The European Central Bank hasn’t sent a clear signal that it will decrease rates anytime soon," said Rivera, currency strategist with Forex Capital Markets. "The much higher expectations that the Fed will cut rates are weighing on the dollar."

British rate cut: Speculation is brewing, however, about a possible rate cut in the U (paydayloans).K. when the Bank of England meets on Thursday, which held the British pound back a bit from achieving the same gains that the euro saw.

At 4 p.m. ET, the British pound bought $1.7483, up from Monday’s $1.7438 level. At one point Monday, the U.K. currency sank as low as $1.7335, the lowest point the pound has seen since March 13, 2006.

Yen: The dollar fell 0.6% against the yen to ¥101.31 after a historic collapse the day before. The dollar fell as low as 4.8%, or ¥100.23 during Monday trading - the biggest one-day drop ever. The dollar recovered a bit from hitting a 6-month low, ending the day at ¥101.82.

The yen was actually down as much as 1% earlier in the day when Australia’s central bank slashed rates early Tuesday and ECB President Jean-Claude Trichet said the bank would continue to provide liquidity to financial institutions for as long as needed.

The yen typically increases when investors show aversion to risk.

But the Fed’s plans may be a long-term positive for the dollar. With global economies struggling, the United States may in fact have the best chance to recover first.

"It’s a coin flip," said Rivera. "If they have to take measures like this, it may heighten concerns, but the whole concerted effort can be seen as a bottom, and we may start seeing buyers come into the market with confidence that the credit crisis is almost over."

In fact, the euro and pound had been much higher against the dollar before Bernanke’s speech. One analyst says some investors were encouraged that the rate cuts will eventually help the economy.

"There is some reassurance coming back into the marketplace," said Garreth Sylvester, senior currency strategist with HFIX. "Bernanke said he was confident in the measures taken to stifle current climate, and suggested the Treasury’s [financial rescue] plan may be enough." 

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Sarah Palin gets a lot of credit for standing up to Big Oil in Alaska, but if she and John McCain win the White House, don’t expect some of her more populist policies to survive the move to Washington.

In her two years as Alaska’s governor, Palin is credited with being tough on big oil, to the benefits of her constituents and bucking her own party.

In late 2007 Palin succeeded in raising the tax on oil companies from 22.5 to 25% of net profits. Alaska also added a clause increasing the tax for each dollar oil goes above $52 a barrel - essentially, a windfall profits tax.

Palin also killed a deal struck between Exxon Mobil, BP, and ConocoPhillips and Alaska’s previous governor to build a natural gas pipeline across the state and into Canada.

Analysts said corruption tainted that deal.

Palin renegotiated a new deal with a Canadian company, TransCanada, to build the $26 billion pipeline, which analysts say - if completed - is better financially for the state.

But analysts - and the McCain campaign itself - are quick to note that Palin will toe the line on the energy policies of her potential boss, who unlike Barack Obama does not favor a windfall profits tax.

Christopher Ruppel, an energy analyst at Execution LLC, a broker and research firm for institutional investors like hedge and mutual funds is more concerned with McCain’s energy policy than Palin’s past spats with the oil industry. "We don’t think she will represent a big change from that."

The McCain campaign, which speaks for Palin, confirmed that stance.

"’The governor supports the campaign’s positions," said Doug Holtz-Eakin, a McCain senior advisor.

Palin certainly has experience in dealing with energy issues in Alaska. But despite her drill baby comments, it’s hard to tell if the oil industry will see her as an ally - a la Dick Cheney who ran Haliburton, an oil services company - or whether her previous tax and pipeline decisions will label her a threat (instant payday loans).

‘It’s mixed, I haven’t picked up a consensus view," said Amy Myers Jaffe, a fellow in energy studies at the James A. Baker III Institute for Public Policy.

Exxon Mobil, which currently has an $800 million lawsuit filed against the state over the revoking of a gas field permit, declined to comment on Palin. Calls to Conoco and BP were not returned. The American Petroleum Institute also declined comment.

Jaffe said Palin shouldn’t get too much credit for raising the oil tax, noting that everyone from Hugo Chavez to the Canadian government hiked taxes as oil prices skyrocketed.

"Even the Bush administration raised royalty fees," she said. "She didn’t do anything everyone else didn’t do."

Other analysts echoed that sentiment.

"When people say ‘I stuck it to the oil companies,’ that is misleading," said Fadel Gheit, a senior energy analyst at Oppenheimer. "She is basically doing what is popular."

The tax may have been popular with Alaska’s voters, but it was not popular within Palin’s own party - many Republican state senators voted against the tax.

Holtz-Eakin, the McCain campaign spokesman, also said Palin’s decision to scrap the pipeline deal highlighted her ability to clean up Washington.

"She threw out the whole thing and redid it, which made sense," he said.

As to whether Palin can bring more experience in energy issues to the White House than her rival Joe Biden can, most analysts didn’t see it that way.

"Biden has extensive experience in dealing with energy and geopolitical issues due to his long record in the Senate," said Execution’s Ruppel. 

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European officials squabbled over how to respond to the global credit crunch, with Germany opposing a coordinated approach and the Netherlands calling on states to set aside funds to help troubled banks.

French President Nicolas Sarkozy distanced himself from comments by his finance minister Christine Lagarde over the need to set up a “rescue fund.'' Luxembourg Prime Minister Jean- Claude Juncker told DeutschlandRadio today he didn't “see the need'' for an effort to emulate the $700 billion rescue package that U.S. senators passed yesterday.

The conflict undermined efforts to build a consensus European strategy to counter the financial crisis as a recession looms. Other fissures emerged, as Ireland's decision to guarantee bank deposits and debts prompted criticism by British bankers yesterday that it “distorted competition.''

“I cannot see a common response,'' Jean Peyrelevade, former chief executive officer of French bank Credit Lyonnais SA, now owned by Credit Agricole SA, said in an interview. “For this crisis it's too late to build a common response.''

Fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy hit Europe this week, with Germany, France, Belgium, Luxembourg, Iceland and the U.K. rescuing five lenders and Italian Prime Minister Silvio Berlusconi pledging to prevent losses for depositors.

Euro Weakens

The euro tumbled against the dollar amid the infighting among European leaders. The Senate's vote in favor of the rescue plan for financial companies today also gave the dollar a boost. The euro fell to $1.3884 per euro at 13:05 p.m. in Frankfurt, near a one-year low, from $1.4009 yesterday in New York.

Dutch Prime Minister Jan Peter Balkenende will discuss his plan for European Union nations to create accounts to support their finance industry when he meets Sarkozy in Paris today, Dutch Finance Ministry spokeswoman Hendrieneke Bolhaar said.

“If all European countries reserve funds, it will add up to hundreds of billions of euros and that provides trust to Europeans,'' Dutch Finance Minister Wouter Bos told parliament today. “The funds will be strictly national, although we need to reach consensus over when to use them.''

In the U.S., Treasury Secretary Henry Paulson proposed a $700 billion bailout on Sept. 20 that lawmakers are struggling to pass. The House of Representatives rejected a version of the plan three days ago. Senators who approved the package urged opponents in the House to drop their objections.

`Non-Starter'

A European version of the Paulson plan is a “non-starter'' because of competing agendas and coordination difficulties, Klaus Baader, chief European economist at Merrill Lynch and Co. in London, said in a Sept. 29 report. Still, he expects increased cooperation among governments confronting the crisis.

The disagreements will be aired at an Oct. 4 meeting called by Sarkozy in Paris with Juncker, leaders of Great Britain, Italy and Germany, as well as European Central Bank President Jean-Claude Trichet.

Lagarde told the German newspaper Handelsblatt in an interview today that a “rescue package'' was needed to help “smaller'' European states “threatened with a banking failure.'' Germany opposes the proposal “based on its current assessment of risk,'' said Finance Ministry spokesman Stefan Olbermann (no fax cash advance) http://paydayloans-on.com.

“We see no need for a fund,'' Olbermann said today.

Reuters reported that the fund would total 300 billion euros ($420 billion), citing an unnamed European government official.

Sarkozy Denial

Speaking to reporters today in Paris, Sarkozy said he “denied the amount and the principle'' of such a fund.

“Everyone is working very well together,'' Lagarde told reporters in Paris today.

The specifics of a coordinated plan notwithstanding, Germany rejects a Europe-wide approach to bank rescues, said Torsten Albig, another finance ministry spokesman.

“The idea of applying one solution, one big bang'' should the banking crisis spread “is not practicable and would create new, enormous problems,'' he told reporters yesterday in Berlin. “The tailor-made solution is the right way.''

That contrasts with pleas from European Union officials for less unilateral action. Charlie McCreevy, EU financial-services commissioner, yesterday proposed more coordinated oversight and rules that banks hold additional capital for asset-backed bonds.

“Capital and strong financial institutions are the lifeblood of an economy,'' McCreevy said in a Bloomberg Television interview in Brussels.

Money Markets

As banks hoarded cash, the Libor-OIS spread, a gauge of cash scarcity, widened for an eighth day. The difference between the three-month London interbank offered rate for dollars and the overnight indexed swap rate widened 7 basis points to 254 basis points as of 8:44 a.m. in London. It averaged 8 basis points in the 12 months to July 31, 2007, before the credit squeeze spurred by the U.S. subprime- mortgage crisis began.

The credit-market turmoil may require a more comprehensive approach in Europe, the Organization for Economic Cooperation and Development said yesterday.

“Considering the exposure of European financial institutions, we might have to start thinking of a systemic plan for Europe if things don't improve on the other side of the Atlantic,'' OECD Secretary General Angel Gurria said in Paris. “The piecemeal approach may not work in Europe either.''

A group of economists including Alberto Alesina of Harvard University and Klaus Zimmerman of Berlin's DIW economic institute appealed for an EU initiative to recapitalize banks.

`Once-in-a-Lifetime'

“This is a once-in-a-lifetime crisis,'' the 10 academics said in an emailed statement. European leaders need to tackle the bank industry's crisis “head on before it spirals out of control.''

One proposal is for European countries to follow Ireland, either as a bloc or individually, in guaranteeing banks' deposits and debts. Spain's Finance Ministry today said it supports strengthening EU protections of deposits. Berlusconi and Sarkozy have already pledged to prevent losses for depositors.

The advantage of such a program would be that it would boost confidence among banks and give them time to resolve their problems, although it would also put taxpayer funds at greater risk, economists at Royal Bank of Scotland Group Plc. said in a report today.

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Capitol Hill negotiators spent Friday working on details of a $700 billion financial rescue plan while President Bush and leading lawmakers offered assurances that Congress and the administration would get a deal done.

"I believe great progress is being made. We won’t leave until we have legislation signed by the president," said House Speaker Nancy Pelosi, D-Calif., told reporters late Friday afternoon.

President Bush, a few minutes after the U.S. stock markets opened on Friday, said he was certain a bill would get finished. "The legislative process isn’t pretty, but we are going to get a rescue package passed," he said.

Bush summoned lawmakers and the presidential candidates to the White House on Thursday to rally consensus behind his plan. Instead, the meeting revealed a deep split between Democrats and House Republicans. Late-night talks between lawmakers and Treasury Secretary Henry Paulson failed to result in an agreement.

On Friday morning, Republican presidential nominee John McCain, R-Ariz., was in talks with House and Senate Republican leaders to see if an agreement could be reached. Some in the GOP were pushing a hybrid plan that contained elements from the administration’s proposal to buy toxic assets from banks and principles laid out by House Republicans.

House Republicans say they want Wall Street to pay for its mistakes in a "workout" - not a bailout by taxpayers.

Meanwhile, Senate Democratic leaders were angry that the debate had gotten entangled by presidential politics. They said they had come close to working out an agreement with House Democrats, Senate Republicans and one leading House Republican, Spencer Bachus, R-Ala.

"It’s fair to say we’re making progress," said Senate Majority Leader Harry Reid, D-Nev., on Friday morning. "The time is now for House Republicans to come to the negotiating table and for presidential politics to leave the negotiating table. Insertion of presidential politics has … been harmful."

Late Friday morning, House minority leader Rep. John Boehner, R-Ohio said he was sending a House Republican to the bipartisan discussions on the Hill.

House and Senate leaders say they want the bill to gain bipartisan support because it represents such a big policy effort for the U.S. government. They also lack the necessary votes to pass it without Republicans on board, Pelosi said. Some members still object to the fact that the bill lacks provisions that would allow the government to recover the rescue’s costs or allow bankruptcy judges to modify the primary residence mortgages of filers, she explained.

Late Friday afternoon, House Financial Services Chairman Barney Frank, D-Mass., told reporters that the staffs of both parties from the House and Senate were negotiating the legislation.

The core of the bill, he said, was the proposal put forth by Paulson that would allow the Treasury to buy up to $700 billion in troubled mortgage assets from financial institutions to free them up to start lending again.

House Republicans had rejected that core on Thursday, calling instead for the government to insure financial institution’s mortgage-backed securities and for those institutions to fund the insurance through premiums.

Frank said that adding an insurance provision "has been an option payday loan low fee. But there would be no point in participating [in Friday’s negotiations] if you didn’t accept the premise of the Paulson plan."

A call for comment from House Minority Whip Roy Blunt, R-Mo., who is representing House Republicans in the negotiations, was not immediately returned.

Many other elements of the legislation were agreed to in principle by negotiators on Friday, Frank said. They include the need for curbs on executive compensation, the need for significant oversight, the right to seek warrants for equity stakes in the companies that sell troubled assets to Uncle Sam, and restrictions on how the $700 billion would be made available to Treasury.

A Democrat close to the negotiations told CNN that while it seems likely the Senate might not vote on any bailout bill ’till Wednesday, a Sunday night vote is still possible. The timing of any House vote is unclear.

This same source says there’s no reason the final deal can’t include language that allows Treasury Secretary Henry Paulson to put some money into an insurance program - as House Republican have proposed.

The Democrat says Congress will not authorize the full $700 billion expenditure at once, instead it will authorized in phases. Other Democratic members say the amount of the initial allotment continues to change.

Staff level negotiations are ongoing and could continue through the night. The principal negotiators will meet again Saturday.

CNN’s Jessica Yellin contributed to this report. 

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High-quality and premium coffees that today command better prices and seduce consumers with their exotic image will eventually become an everyday commodity as demand for them rises, a Brazilian specialty coffee producers said this week.

Joao Guilherme Pires Martins, executive director at Octavio Cafes, which has a vast 6 million-tree coffee plantation in the 1,000 meter altitude Mogiana region, said even very cost-conscious consumers were seeking more flavorful drinks.

“The only way to go is to produce specialty or fine cup coffees. People are looking for them. They don’t want to drink bad coffees with poor taste. Even poor people are looking for good tastes and good prices,” he said.

Martins said prices for specialty coffees were kept high by the fast-growing world demand of about 15 percent per year. But he said that as supply grows, prices eventually would fluctuate in the same way as regular coffees do.

“In my opinion, in 10 or 20 years we won’t have a premium for specialty coffees, just preferences (between types),” he said in an interview at the company’s farm, which is installing its own bean roasting equipment at its newly-built premises.

He said Brazil currently produced around 1.2 million bags of specialty coffee on average per year and estimated that could rise to around 2 million by 2015.

But the slowing economy in the United States, the world’s largest coffee consumer, could slow premium coffee growth fast payday loan no faxing. The specialty sector accounts for 17 percent of U.S. coffee sales.

Ric Reinhart, director of the Specialty Coffee Association, told Reuters at a coffee conference in Nicaragua this week that some U.S. buyers had begun cutting back on more expensive espressos in favor of drip-brewed coffee to save money. 

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U.S. communications equipment maker Ciena Corp (CIEN.O: Quote, Profile, Research, Stock Buzz) slashed its outlook on Thursday due to phone companies delaying purchases amid a weak economy, triggering a 24 percent fall in its shares.

The company, which posted a 59 percent fall in quarterly profit, warned that many phone service providers were delaying orders as they reconsidered their capital spending plans.

Ciena sells optical switches and other products that support Internet protocol networks to top U.S. phone companies such as AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) and Sprint Nextel Corp (S.N: Quote, Profile, Research, Stock Buzz).

Ciena said it did not think it was the only one suffering order delays, and its warning dragged down shares in other telecommunications equipment vendors like Cisco Systems Inc (CSCO.O: Quote, Profile, Research, Stock Buzz), Alcatel-Lucent (ALUA.PA: Quote, Profile, Research, Stock Buzz), and Juniper Networks Inc

(JNPR.O: Quote, Profile, Research, Stock Buzz) easy fast cash.

“The macroeconomic environment gives them a pause for thought, for greater capex scrutiny,” Chief Executive Gary Smith said in a phone interview, adding that customers were not canceling projects or orders but taking more time in their buying decisions.

“I think they’re just being prudent and reflective of the concerns in the global macroeconomic world.” he said.

Ciena forecast revenue in its current, fiscal fourth quarter in a range of $190 million to $210 million, dramatically below the market’s forecast of $264 million, according to Reuters Estimates. 

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Bank of Japan Governor Masaaki Shirakawa said the economy will probably keep slowing for now and inflation isn't spreading from commodity-related goods because wage growth is subdued.

“Growth will likely remain sluggish for the time being'' because of higher energy prices and a cooling global economy, Shirakawa said in a speech today in Nagoya, central Japan. “Second-round effects'' of inflation are “unlikely to emerge in the near term,'' he said.

Prices are rising at the fastest pace in a decade, prompting consumers to cut back as wage growth slows. Signs the world's second-largest economy is entering a recession will probably prompt the central bank to keep interest rates on hold at least until next year, according to economists surveyed by Bloomberg.

“The latest economic data suggest Japan's economy will keep deteriorating for the time being and a rate increase remains out of the question,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The economy won't pick up at least until later next year and the bank won't be able to raise rates until 2010 at the earliest.''

The bank shelved a two-year policy of raising rates in April, the month Shirakawa became governor. The benchmark borrowing cost will stay at 0.5 percent through next June at least, according to 21 of 26 economists surveyed by Bloomberg last month. Four estimated higher rates and one predicted a cut.

Growth, Inflation Risks

“The current situation requires the bank to carefully monitor both downside risks to economic growth and upside risks to inflation,'' Shirakawa said.

The governor warned about the side effects of keeping borrowing costs low for a prolonged period of time, saying the global credit crisis emerged after a sustained period of low interest rates and robust growth around the world quick payday.

“We should keep in mind the view that excessively accommodative financial conditions often cause large swings in the economy after a certain time lag,'' Shirakawa said. “If the downside risks to the economy turn out to decrease, prolonging the period of accommodative financial conditions may lead to swings in economic activity and prices.''

Shirakawa said last month that low rates would help the nation avoid slipping into a “deep'' slump. Japan's key rate is the lowest in the industrialized world.

Core consumer prices, which exclude fresh food, rose 2.4 percent in July, the biggest jump since 1997, a report last week showed. Higher prices are discouraging consumers, whose wages rose 0.3 percent in that same month, the slowest pace this year. Sluggish consumer spending and weakening exports caused the economy to contract at an annual 2.4 percent rate last quarter.

Inflation Expectations

Shirakawa said the surge in consumer prices will probably moderate as global commodity prices cool and companies complete a round of price increases. He also said the bank needs to be mindful of inflationary expectations, given that consumers who grew accustomed to falling prices over the past decade aren't used to paying more for goods and services.

“The bank should pay attention to the risk that possible changes in the inflation expectations of households and firms' price-setting behavior may generate second-round effects,'' he said.

Policy makers need to watch households' inflation expectations to ensure they remain anchored, Bank of Japan board member Miyako Suda said in a speech last week.

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