Wednesday, September 17, 2008

Stocks Tumble; Financial Markets In Turmoil

Feather News
Updated


At today's 4 p.m. closing bell, the Dow Jones Industrial Average recorded a loss of 449 points for the day while gold and other precious metals, considered safe-havens in risky times, rose sharply.

Gold December futures rose 9 percent to $850.50 an ounce, the largest percentage gain since 1999 and its largest one-day gain in dollar terms. Silver futures for December delivery rose 11 percent to $11.675 an ounce, the biggest gain since 1979.

The U.S. Federal Reserve announced it will give a two-year, $85 billion loan to American International Group (AIG) in exchange for a nearly 80 percent stake in the company. AIG, the world's largest insurance company lost billions in insuring against bond defaults. The news failed to reassure investors.

Stocks of Morgan Stanley and Goldman Sachs Group Inc., the two largest U.S. securities firms, "tumbled the most ever in trading after a government rescue of American International Group Inc. failed to ease the credit crisis," according to Bloomberg News.

According to the New York Times, the Mohegan tribal government announced plans to borrow $51 million this week which is expected to be used toward construction of a government building-community center. It is unclear whether the Tribe will cancel the $51 million bond offering due to the economic situation.

Declining casino revenues and worsening economic conditions has not resulted in the Tribe modifying any of its construction plans so far. For years, tribal members have proposed a low-cost community center where members can gather but the Tribal Council has never taken them seriously and appear to be going full steam ahead toward a government building-community center that will eventually cost $100 million (not including interest expense), according to one high government official.

Almost twelve years have gone by since the Mohegan Sun casino opened and the Tribe still does not have a gathering place, a community center, for tribal members.

The Tribal Council met in executive session today with Phil Cahill, the Tribe's chief operating officer, over finance issues. Due to the Tribe's practice of discussing substantive government finance issues behind closed doors and not during the open session part of Tribal Council meetings, tribal members never know the state of their government's financial affairs.