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President-elect Barack Obama warned that the U.S. is “trapped in a vicious cycle” and faces the loss of “millions of jobs” unless immediate steps are taken to stimulate the economy and to rescue the nation’s automakers.

“If we do not act swiftly and act boldly, most experts now believe we could lose millions of jobs next year,” Obama said at a press conference today in Chicago. “We do not have a minute to waste.”

Obama, 47, said he will nominate New York Federal Reserve Bank President Timothy Geithner as Treasury secretary and has picked former Treasury chief Lawrence Summers to be his White House economic director. Obama also named Christina Romer to head the Council of Economic Advisers, and Melody Barnes to serve as director of the Domestic Policy Council.

“We need to bring together the best minds in America to guide us, and that is what I’ve sought to do in assembling my economic team,” he said.

The president-elect vowed to push for a large economic- stimulus package, though he declined to say how big it would be, saying only that the spending needs to be “of a size and scope that is necessary to get this economy back on track.”

“We have to make sure the stimulus is significant enough that it really gives a jolt to the economy,” he said, adding that it will focus on creating jobs and restoring business confidence.

$700 Billion Plan

Democratic lawmakers including Senator Charles Schumer of New York said this weekend they plan to design a package as large as $700 billion and deliver it to Obama on his first day in office.

Obama said any economic-recovery plan should also address clean energy and education. “Not only do I want this stimulus package to deal with the immediate crisis, I want it also to lay the groundwork for long-term, sustained economic growth.”

He conceded that any plan is “going to be costly” and lead to a substantial budget deficit.

Obama also pledged to aid American automakers in avoiding a cash shortage and possible bankruptcies, saying, “We can’t allow the auto industry simply to vanish.”

Still, he said, the Big Three automakers must present a plan on how they will overhaul their operations to become more competitive with foreign automakers, and take into account environmental and energy concerns.

Help for Automakers

“We should help the auto industry, but what we should expect is that any additional money that we put into the auto industry, any help that we provide is designed to assure a long- term sustainable auto industry and not just kicking the can down the road,” he said business cards.

U.S. automakers have been lobbying Congress for $25 billion in aid to stave off a cash shortage by year-end. Lawmakers have put off until December a vote on a bailout, telling the carmakers to submit plans to reform themselves by Dec. 2.

“Americans take great pride in the history of the American automobile industry, but taxpayers don’t want to see more money wasted,” Obama said.

Obama said he plans to follow through on campaign promises to pass a tax cut for most Americans and to raise taxes on the wealthiest, saying they can afford to “pay a little bit more for us to be able to invest and get the economy back on track.”

Talks With Bush

Obama said he spoke to both President George W. Bush and Federal Reserve Chairman Ben Bernanke today about the $700 billion financial market rescue plan, and that they “are united in making sure that the financial system works and operates the way it needs to.”

“We have to do whatever is required to keep the financial system working and capital flowing,” he said. The Treasury and Fed need to use their authority under the legislation to “forcefully” resolve the crisis created by banks burdened with deteriorating assets related to subprime mortgages. He said the government rescue of Citigroup Inc. announced over the weekend highlighted the magnitude of the challenge facing the nation and his administration.

“Our economy is trapped in a vicious cycle,” he said. “The turmoil on Wall Street means a new round of belt- tightening for families and businesses on Main Street, and as folks produce less and consume less, that just deepens the problems in our financial markets.”

Balancing Tax Code

He didn’t specify whether he wanted Bush’s tax cuts to be repealed or to let them expire in 2010, as scheduled.

“We’ve got to restore some balance to our tax code,” Obama said. “Whether that’s done through repeal or whether that’s done because the Bush tax cuts are not renewed is something that my economic team will be providing me a recommendation on.”

Obama warned against expectations of “shortcuts or quick fixes” to the crisis. “The economy is likely to get worse before it gets better,” he said.

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Japan's exports declined at the fastest pace in almost seven years in October as the intensifying global financial crisis stifled sales of cars and electronics.

Exports, the main engine of Japan's economic growth in the past six years, fell 7.7 percent from a year earlier, the biggest drop since December 2001, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted an 8 percent drop.

The Nikkei 225 Stock Average dropped 4.1 percent on concern exporters' profits will deteriorate as the global slowdown spreads to Asia, where Japan's shipments dropped last month for the first time in six years. Automakers Isuzu Motors Ltd. and Hino Motors Ltd. said today they plan to cut output in response to weaker overseas sales.

“We're in store for even more depressing export news,'' said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. “Exports will heavily weigh on Japan's economy as the impact of the global financial crisis deepens.''

The yen traded at 95.72 per dollar at 12:16 p.m. in Tokyo from 95.88 before the report was published. Japan's currency has advanced 9.2 percent since September, eroding exporters' earnings.

Japan's economy contracted for a second consecutive quarter in the three months ended Sept. 30, following the U.S. and Europe into recessions, as businesses cut spending. Growth in China, Japan's largest trading partner, has slowed for four quarters.

Emerging Markets

Today's report showed the global financial crisis is hurting demand from the emerging markets that have propped up Japan's export growth as the U cash in 1 hour.S. and Europe falter. Exports to Asia fell 4 percent, the first decline in more than six years. Shipments to China fell for the first time in three years.

Shipments to Europe plunged 17.2 percent, the largest drop since December 2001, and demand from the U.S. dropped 19 percent.

“Exports and capital spending have declined across the board as the outlook for the key European and North American economies has become increasingly gloomy,'' said Naoki Iizuka, senior economist at Mizuho Securities Co. in Tokyo. “Japan's real gross domestic product will inevitably shrink in the fourth quarter and in the first quarter of next year.''

Imports climbed 7.4 percent, causing a trade deficit of 63.9 billion yen ($666 million), the third shortfall this year.

Automobile exports fell 15 percent, the ministry said.

Isuzu, Hino

Isuzu Motors, Japan's largest maker of light-duty trucks, reduce output from next month and cut 1,400 temporary and part- time workers. Hino, the country's largest heavy-duty truckmaker, will stop production at a Tokyo plant for five days next month. Both companies slashed profit forecasts last month.

“Declines in exports and production may work as a vicious circle for the economy,'' said Soichi Okuda, chief economist at Sumitomo Research Institute in Tokyo. “Japan's downturn will probably continue through the first quarter of next year.''

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Japan's economy, the world's second largest, entered its first recession since 2001 last quarter and the government and economists say conditions may get even worse.

Gross domestic product shrank an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.

The slowdown may deepen as the global financial crisis hurts exports, prompting companies from Toyota Motor Corp. to Canon Inc. to slash profit forecasts and cut investments. Japan has the lowest interest rates among the 20 biggest economies and public debt that exceeds 180 percent of GDP, limiting the government's ability to stimulate growth.

“It's only going to get worse,'' said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. “Japan may be entering its deepest recession in a decade as the global financial crisis cools demand overseas.''

The Nikkei 225 Stock Average closed 0.7 percent higher, reversing declines of as much as 2.9 percent, as investors bought shares of drug and utilities companies, which are less vulnerable to a slowdown. The gauge has lost 43 percent this year. The yield on Japan's 10-year bond fell two basis points to 1.48 percent.

The yen fell to 97.21 per dollar as of 4:16 p.m. in Tokyo from 96.09 before the report as a stock-market rally across Asia prompted investors to fund purchases of higher-yielding overseas assets in the Japanese currency. The yen has gained 9.2 percent since the end of September, compounding exporters' woes.

Europe, U.S.

The economy last contracted over two consecutive quarters — the technical definition of a recession — in 2001. Germany also fell into a recession last quarter, as did the entire euro zone, reports showed last week, and the U.S. is probably in one also.

“There is more bad news to come in the next few quarters as the global downturn hits hard,'' said Julian Jessop, chief international economist at Capital Economics Ltd. in London.

Leaders from the Group of 20 nations this weekend agreed to take a “broader policy response'' by using interest-rate cuts and fiscal stimulus to shore up the weakening global economy. The Bank of Japan has little scope to contribute further after lowering the benchmark rate to 0.3 percent last month, and a 5 trillion yen ($52 billion) stimulus plan announced by Prime Minister Taro Aso last month risks worsening the public debt.

Economic and Fiscal Policy Minister Kaoru Yosano confirmed that the economy had entered a recession that may deepen.

“Given that the global economy is decelerating, Japan's downturn will continue,'' Yosano said. He said there's a risk that that the slump will become “more severe'' because the global financial crisis is spreading to emerging economies.

Businesses Cut Back

Growth in China, which became Japan's biggest customer in July, slowed to 9 percent last quarter, the weakest since 2003 freecreditscore.

Quarter-on-quarter, Japan's economy shrank 0.1 percent, today's report showed. Capital spending fell 1.7 percent from the previous three months, compared with economists' expectations of a 2 percent drop.

Toyota, which makes more than three-quarters of its sales abroad, forecast profit will fall this fiscal year by almost 70 percent. The carmaker will fire 3,000 workers by March, and the Nikkei newspaper reported this month that it will delay adding capacity at a domestic plant that makes Lexus sedans.

Canon, the world's largest camera maker, last month forecast profit growth would fall for the first time in nine years and said it will cut capital spending 4.7 percent in 2008 to 410 billion yen.

“The economy is still so sensitive to the global business cycle,'' said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo. “A long as the global economy keeps sinking, Japan will probably experience a deep recession.''

Exports Weaken

Net exports subtracted 0.2 percentage point from growth after imports outweighed an increase in shipments abroad. Exports rose 0.7 percent, less than the 1.2 percent expected. Imports climbed 1.9 percent as oil surged to a record in the quarter. Economists predicted a 1.5 percent gain.

Still, Japan will probably suffer less than its biggest counterparts after companies shed debt and streamlined labor forces following the bursting of the property and asset bubble in the early 1990s. Asia's biggest economy will shrink 0.1 percent next year, according to the Organization for Economic Cooperation and Development, less than the 0.9 percent and 0.5 percent contractions in the U.S. and Europe.

Consumers are getting some relief as inflation abates and the government prepares to provide households with at least 12,000 yen ($125) each as part of the stimulus plan. Consumer spending increased 0.3 percent last quarter, more than the 0.1 percent economists expected, today's report showed.

Not a Good Sign

“It's difficult to take it as a good sign because the figure was boosted by seasonal factors such as the hot summer and the Olympics,'' said Junko Nishioka, an economist at RBS Securities Japan Ltd. in Tokyo. “Consumption will probably turn negative in the fourth quarter'' and the economy won't recover until 2010, she said.

The ratio of jobs to applicants has fallen for eight months and the deteriorating profit outlook for companies is also putting pressure on wages. Winter bonuses, which typically account for about 10 percent of a fulltime worker's annual pay, will fall 2.9 percent this year, the Nikkei reported last week.

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U.S. Treasury Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

“Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards,'' Paulson said in the text of a speech today in Washington. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy.''

Treasury and Federal Reserve officials are exploring a new “facility'' to aid the market for securities backed by assets, Paulson said. Officials are considering using a portion of the bailout money to “encourage private investors to come back to this troubled market,'' he said.

The Treasury chief said the department is also considering having companies that accept new taxpayer funding get matching private capital short term cash loans.

Buying “illiquid'' mortgage-related assets is no longer being considered, he said.

“Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role,'' he said, referring to the Troubled Asset Relief Program.

Paulson has committed all except $60 billion of the initial $350 billion allocated last month to address the collapse of financial institutions and markets, and Congress could reject approval for the remainder. Lawmakers including House Speaker Nancy Pelosi are pushing for aid to automakers including General Motors Corp., pressure that Paulson is resisting.

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The nation’s retailers saw October’s same-store sales take a nosedive and the gloomy reports point to a weak Christmas sales season.

Macy’s saw a 6.3 percent decline in same-store sales. It was one of the biggest declines the retailer has seen all year. Macy’s has 14 stores in Hawaii.

Costco’s same-store sales dipped just 1 percent. The Issaquah, Wash.-based big-box retailer has six locations in Hawaii.

Seattle-based Nordstrom, which opened its first Hawaii store at Ala Moana in March, saw same-store sales fall nearly 16 percent.

Target, which plans to open its first Hawaii store in Kapolei next spring, saw October sales drop just below 1 percent Faxless pay advances.

Wal-Mart Stores, on the other hand, which has eight discount stores and two Sam’s Club locations in Hawaii, reported a 2.4 percent increase in same-store sales.

• Macy’s October sales down 6.3 percent
• October same-store sales dip at Costco, plunge at Nordstrom
• Wal-Mart sales up, Target down

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The year 2009 will bring a dose of optimism to major U.S. airline carriers due to the effects of lower oil prices, falling domestic capacity and revenue-per-available-seat-mile growth, senior analyst Michael Derchin with FTN Midwest Securities Corp. said.

Derchin added that weaker carriers have already been forced to close operations, a sign that weaker carriers are leaving the marketplace.

Derchin added that the Delta Air Lines Inc.-Northwest Airlines Corp. merger along with consolidation and a tightening in airline capacity nationwide have created a situation where the airlines stand to profit from higher fares and the elimination of inefficient flights.

Atlanta-based Delta (NYSE: DAL) received approval to merge Oct american cash advance. 29 with Eagan, Minn.-based Northwest (NYSE: NWA). Combined the carriers have made cuts in domestic capacity of about 15 percent, though international capacity is up.

Derchin predicts that with all factors considered, the airline industry is in-line to record a small profit in the fourth quarter of 2008. He counts Dallas-Fort Worth-based AMR Corp. (NYSE: AMR), the parent of American Airlines among his favorites in the new year, as well as Dallas-based Southwest Airlines (NYSE: LUV).

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Gov. Linda Lingle and Lt. Gov. James “Duke” Aiona will travel to Asia next week to promote travel to Hawaii.

They will travel separately, visiting Indonesia, Taiwan, China, Japan and South Korea with the goal of increasing Asian visitors to the state.

The China and Korea markets are of special interest because travel restrictions recently were eased for leisure travel to the United States.

The trips will run Nov. 11-22. Lingle will travel to China, Taiwan and Indonesia. Aiona will visit Japan and South Korea. Both will be out of the country at the same time for about seven days, leaving Attorney General Mark Bennett as acting governor.

Lingle also will meet with Asian airline officials to discuss the possibility of increasing the number of flights and seats from Asian cities to Hawaii.

“It is critical that we do all we can to reach out to our traditional visitor base in Japan as well as emerging markets such as China and Korea to encourage people to visit Hawaii, and to ensure our state is well-positioned with increased flights and air seat capacity,” Lingle said in a prepared statement payday advance loans.

The trip is a result in part of meetings earlier this year with local hotel executives and industry leaders who encouraged the governor to increase Hawaii’s tourism outreach and marketing.

Travel expenses will be covered by several sources, including the East-West Center, the Hawaii Department of Transportation and the Hawaii Department of Business, Economic Development and Tourism.

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Barack Obama won't have time to catch his breath.

Having won the longest election in U.S. history, toppling two formidable rivals and succeeding in his improbable quest to become the first African-American president, he will immediately begin the arduous work of turning campaign promises into a viable agenda, aides said.

Illinois Senator Obama inherits neither peace nor prosperity, but rather the toughest environment for a new president since Franklin D. Roosevelt. He takes office with the nation in the grip of the worst economic crisis in three- quarters of a century and embroiled in two foreign wars.

“It's been decades since we've seen something like this, where a president has to deal with major crises in national security and economic policy at the same time,'' said presidential historian Michael Beschloss.

Obama, 47, acknowledged as much in his acceptance speech before at least 125,000 people in Chicago's Grant Park shortly after midnight.

`Planet in Peril'

“Even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime — two wars, a planet in peril, the worst financial crisis in a century,'' he said. “There is new energy to harness and new jobs to be created; new schools to build and threats to meet and alliances to repair.''

On the campaign trail, Obama vowed to pursue an “Apollo- style'' program to transform the country's energy economy, a massive overhaul of the health-care system, and a slew of other proposals to bolster the middle class and restore economic confidence.

When President George W. Bush took office in 2001, he inherited a record budget surplus and a nation at peace. Bush's initial to-do list — spending that surplus, pursuing a “humble foreign policy,'' and raising school test scores — now sounds trivial. By contrast, the Obama administration will begin as economic indicators suggest the U.S. may be headed for the deepest recession in a quarter century and the most complicated financial crisis since the Great Depression. Wages are stagnant, credit is squeezed and costs are escalating.

Deficits

Obama has two months to form a government and prioritize a long list of costly demands at a time of unprecedented deficits. Though FDR had to tackle an unemployment rate four times the current 6 percent jobless figure, he didn't inherit two wars, a global terrorist threat or a world with unstable nuclear-armed states.

The new president is likely to confront stiff resistance from Republicans accustomed to decades of partisan fights in Washington. The task of governing will be both monumental and delicate.

So far, Obama has shown no signs of curbing his ambitious proposals. The turmoil, he has said, makes his agenda for taxes, energy, health care, education and the financial industry more pressing.

“The crisis crystallized in so many ways what was really at stake,'' said Anita Dunn, a senior Obama adviser. “We had been saying it's a big election about big things.'' For many people, the Wall Street crisis and the $700 billion bailout brought “into focus how big the challenges are.''

About three weeks ago, as the crises deepened and financial markets reeled, Obama increased the proposed cost of his “middle-class rescue plan'' to $175 billion from $115 billion.

Advisers said pushing through that stimulus, which would direct funds to financially strapped states, rebuild infrastructure and give a $1,000 tax rebate to eligible families, will be Obama's top priority in January if Congress doesn't pass a comparable plan this month.

Public Confidence

Taking the helm during the Great Depression, Roosevelt's first step was to shore up the confidence of the public. The 32nd president staved off a run on banks and put in place dozens of programs to stimulate the economy, create jobs, regulate the financial system, rebuild infrastructure and create a social safety net bad credit pay day loans.

With Obama's skill at oratory and the unflappable air he projected during the bailout vote, he could likewise send a reassuring message.

“The model should be FDR,'' tamping down panic and letting America know that “action is essential,'' said political scientist Fred I. Greenstein, author of “The Presidential Difference: Leadership Style from FDR to George W. Bush.''

The public's unease goes deeper than the immediate crisis. The nation has “been through some terrible shocks in last 10 years — a contested election, the 9/11 attacks, two wars, Hurricane Katrina. The president is going to have to heal the country,'' Beschloss said.

Agenda Needed

That will take more than a calm demeanor and rhetorical skill; Obama needs an agenda that achieves promises he has made, and that will require buy-in from financial and military leaders and Congress.

“It's going to be a challenge of leadership. Can government fix anything, can it overcome gridlock?'' said Julian Zelizer, a historian at Princeton University in New Jersey.

Roosevelt invented a measure by which he could be judged: the First 100 Days. It's been the yardstick ever since. Republican Ronald Reagan focused his agenda early; Democrats Jimmy Carter and Bill Clinton didn't.

“FDR had 15 major bills in his famous 100 days, and the Reagan Revolution was all within a year,'' said Alan Lichtman, professor of history at American University in Washington. “The next president has to try a lot of things and see what works.''

Manageable Goals

Obama must set priorities and select a few manageable goals he can accomplish quickly, historians said. A president's mandate is usually strongest at the beginning, giving him the best chance to pass his agenda and administer bitter medicine.

“You sort which things you can do quickly and which you have to explain to your country will take time,'' said Stephen Hess, an analyst at the Brookings Institution in Washington who has been involved in every presidential transition since Dwight D. Eisenhower's handoff to John F. Kennedy.

“Ronald Reagan could list on the fingers of one hand exactly the things he wanted to do on Jan. 20, 1981,'' Hess said.

David Eisenhower, director of the Institute for Public Service at the University of Pennsylvania's Annenberg School in Philadelphia, said Obama would have to divide programs into three phases: “Relief, Reform, and Recovery.''

“Relief must begin with banking, the insurance industry. Recovery includes energy, education, foreign policy, relations with NATO, new overtures in the Mideast,'' said Eisenhower, grandson of President Eisenhower. “Reform would be taxes, health, re-industrialization.''

Foreign Policy

While economic and domestic concerns are front and center, Obama can't leave foreign policy on the back burner. He inherits two wars, a defiant Iran and an ever-present al-Qaeda. Middle East peace talks are flagging, Europe faces an assertive Russia and hurdles remain over an agreement to end North Korea's nuclear program.

In Iraq, Obama has vowed to withdraw most combat troops within 16 months, while sending more forces to Afghanistan, where a resurgent Taliban is staging attacks from tribal areas along the border with Pakistan, an unstable nuclear-armed U.S. ally.

Obama has pledged to work more closely with allies and engage adversaries such as Iran in talks.

Speaking in Ohio on Oct. 13, Obama said his agenda wouldn't “be easy or come without cost.''

That, he said, means investing in “energy, education and health care that bear directly on our economic future, while deferring other things we can afford to do without.''

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Standard & Poor’s Ratings Services said Monday Constellation Energy Group’s credit will stay on a watch list.

“The company’s ability to shore up its liquidity and to reduce risk in its commodities business are key credit drivers,” said analyst Aneesh Prabhu in a research note released Monday.

The major credit rating agency — it put the Baltimore energy giant on watch Sept. 17 with threats of a downgrade — said a credit facility for Constellation from a consortium of banks set to expire in October was extended through the end of the year.

Constellation officials said Oct loan till payday. 31 they may need an additional $750 million in cash to stabilize the company’s financial position. MidAmerican pumped an estimated $1 billion into the company in September.

Standard & Poor’s move to put Constellation on credit watch in September eventually triggered the proposed $4.7 billion sale of Constellation to MidAmerican.

Constellation (NYSE: CEG) stock closed down 3 percent Monday at $23.46.

Constellation Energy plans to hold a third-quarter earnings call Nov. 6.

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