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The fate of German lender Hypo Real Estate (HRXG.DE: Quote, Profile, Research, Stock Buzz) hung on the outcome of a showdown on Sunday between Chancellor Angela Merkel’s government and banks over who would foot the bill for a bailout.

Banks and insurers withdrew their support for a government-led 35 billion euro ($48.50 billion) rescue deal for HRE after new refinancing problems came to light at the Munich-based lender.

Berlin scrambled to arrange talks to hammer out a new deal before markets open on Monday and also announced that it would provide an unlimited guarantee for private deposit accounts as part of its reaction to the banking crisis.

The banks involved in the talks welcomed the deposit guarantee as a sensible step and were confident agreement could be reached in the coming hours, a banking source familiar with the situation said on Sunday, adding “we are making progress (fast cash loan).”

Earlier on Sunday, Merkel and her Finance Minister Peer Steinbrueck, speaking at a hastily arranged news conference, expressed exasperation at HRE and the banks that pulled out of its rescue.

“I am pretty angry that the management of (HRE) in the last few days has revealed a further liquidity hole of unknown size,” Steinbrueck said.

“The federal government refuses to be forced into some sort of shared responsibility by this bank or to put the entire burden of the risks on taxpayers.”

HRE is relatively small when compared with other firms in Frankfurt’s blue-chip DAX .GDAXI index of leading companies, but its role as a lender for commercial property, infrastructure and government financing makes it a major financial player. 

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European leaders pledged to bail out their own nations' banks while stopping short of a regional rescue effort to deal with the global credit crisis.

At a summit in Paris yesterday, leaders of France, Germany, Britain, Italy, Luxembourg, the European Central Bank and the European Commission agreed to ease accounting rules, seek tougher financial regulations and weaken enforcement of competition and budget laws.

“Each government will act according to its own methods and its own means but in a coordinated manner with the other European states,'' French President Nicolas Sarkozy, who called the meeting, told reporters.

The gathering came a day after U.S. lawmakers approved a $700 billion bank-rescue package and as Europe's own initial bailout efforts began to unravel. Germany's Hypo Real Estate Holding AG said a government-backed 35 billion-euro ($49 billion) deal collapsed yesterday when banks withdrew their support. Belgian authorities worked to shore up Fortis after the lender received an 11.2 billion-euro lifeline on Sept. 28.

Europe “is still a dwarf compared to the U.S.'' in terms of willingness to spend, said Laurence Boone, an economist at Barclays Capital in Paris. The statement on supporting banks “is not a progress. It's the same as before the summit.''

The failure to forge a consensus approach to shore up banks roiled by soaring borrowing costs reflects the divisions in the 27-nation bloc. Germany criticized a plan floated by French Finance Minister Christine Lagarde to set up a rescue fund. A chorus of opposition greeted Ireland's decision to guarantee its banks' deposits and debts.

`Collective Action'

Hours before the summit, Dominique Strauss-Kahn, managing director of the International Monetary Fund, met Sarkozy to press the need for agreement. “Collective action is even more necessary in Europe than in the U.S. because Europe is more complex than the U.S.,'' he told reporters. “Action must be taken quickly and in a concerted manner.''

German Chancellor Angela Merkel's opposition underscored the hurdles to forging a unified front. “Each country must take its responsibilities at a national level,'' she told a joint press conference after the summit.

The government leaders did agree on policy recommendations for the European Commission and for a global summit they're seeking to deal with the credit crisis (payday loan online).

They said they would seek to harmonize guarantees of deposit levels in the wake of the Irish move. The U.K. bank regulator increased its insurance ceiling to 50,000 pounds ($88,500) per account from 35,000 pounds to stem a flow of funds to Ireland.

`Global Summit'

Their joint statement called for a global summit “as soon as possible'' to implement “a real and complete reform of the international financial system.''

Sarkozy said that “all actors'' must be supervised, including rating firms and hedge funds. Executive-pay systems must also be reviewed, he said.

“We want a new world to come out of this,'' Sarkozy said. “We want to set up the basis for a capitalism of entrepreneurs, not speculators.''

Anticipating increased spending, declining tax revenue, and government bank takeovers, they called for “greater flexibility'' in the application of European Union competition and budget rules.

European finance ministers last month pledged to keep their budget deficits below 3 percent of gross domestic product even as the economic slowdown dented tax receipts and boosted welfare payments.

Accounting Rules

The leaders said they want to allow banks to keep some assets valued as if they'd be held until maturity, instead of having to review their value each quarter.

“That's to stop the down-spiral of assets' value,'' Barclays' Boone said. “That's the closest thing the commission can do to what the Americans do.''

They also said they want to change accounting rules that require banks to review their holdings each quarter and report losses when the values decline, the so-called mark-to-market standard. Banks worldwide have written down $587.7 billion since last year, according to data compiled by Bloomberg.

With their economies headed into recession, European leaders said the European Investment Bank will lend 30 billion euros to support small and medium-size companies that may struggle to find cash.

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Constellation Brands Inc (STZ.N: Quote, Profile, Research, Stock Buzz), the world’s largest wine producer, posted a quarterly profit excluding items that beat Wall Street estimates by a penny, and maintained its full-year earnings outlook.

On a net basis the owner of Robert Mondavi and Ravenswood wines reported a loss for its fiscal second quarter of $22.7 million, or 11 cents per share, compared with a net profit of $72.1 million, or 33 cents per share, a year before.

Excluding restructuring charges, acquisition-related costs, inventory write-downs from selling some Australian assets and other items, Constellation earned a profit of 45 cents per share. Analysts on average were expecting 44 cents, according to Reuters Estimates.

Net sales rose 7 percent to $956.5 million, with branded wine sales growing 6 percent and spirits sales growing 4 percent.

Excluding the recent acquisitions of premium wine brands including Clos du Bois and Wild Horse, the company’s branded wine business rose 4 percent faxless online payday advances. In North America, wine sales rose 7 percent from the year-ago period, when the company sold much less wine in order to reduce distributors’ inventory levels.

Wine sales, excluding acquisitions, fell 3 percent in Europe and 1 percent in Australia and New Zealand. The company said recent price increases hurt sales volume.

Sales of the company’s spirits brands, which include Svedka Vodka, Black Velvet Canadian Whisky and 99 Schnapps, rose 4 percent.

The company maintained its prior earnings outlook for fiscal 2009, which ends in February, saying it expects to earn $1.68 to $1.76 per share, excluding items.

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The Sacramento Kings will air all but one of their 2008-09 contests on local TV, team officials said.

The team’s Dec. 13 game against the New York Knicks will be broadcast on NBA-TV, spokesman Mitch Germann said.

Comcast SportsNet California will carry 75 Kings games, of which 38 are home games. Local ABC affiliate KXTC Channel 10 will air 15 contests.

The season begins Oct bad credit payday advance. 29 on the road against the Minnesota Timberwolves.

All games will be broadcast on radio on Sports 1140 KHTK-AM.

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Zvue Corp. made Ulysses Curry, who joined its board six weeks ago, chairman and interim CEO, replacing former CEO Jeff Oscodar.

Oscodar has been CEO for four years at Zvue, which was formerly named Handheld Entertainment.

Curry, once the chief financial officer of Accuray Inc. (NASDAQ: ARAY), took a seat on the San Francisco company’s board on Aug. 4. There’s been a lot of turbulence on the board this summer, with several directors quitting their seats. Robert Austrian left the board Sept. 9.

Zvue (NASDAQ: ZVUE) lost two directors in July, when Allan Grafman and Mitchell Koulouris quit, leaving the company with a shortage of independent directors no fax payday loans. Koulouris and Grafman were added to the board as independent directors effective March 4, after David Hadley and Geoff Mulligan quit. Both Koulouris, 47, and Grafman, 54, worked on the nominating, compensation and audit committees.

CFO Tom Hillman quit Aug. 15.

The company runs web sites like holylemon.com, dorks.com and funmansion.com. It also sells MP3 players and makes content through royalty deals with content providers for the device.

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Federal Reserve Chairman Ben S. Bernanke is betting he can use targeted emergency loans rather than another interest-rate cut to pull Wall Street through the credit crisis.

The Fed kept the benchmark rate at 2 percent yesterday, citing risks to growth and inflation. Two days earlier, officials allowed securities firms use equities as loan collateral to ease the impact of Lehman Brothers Holdings Inc.'s bankruptcy. Hours after the meeting, the Fed agreed to an $85 billion loan as part of a government takeover of American International Group Inc.

By rebuffing calls by some investors for a rate cut, the central bank aims to meet its mandate to ensure stable prices while counting on auctions of cash and Treasuries and direct loans to address the credit crunch.

Policy makers believe “lowering the funds rate is a blunt instrument and not aimed at financial markets,'' said Stuart Hoffman, chief U.S. economist at PNC Financial Services Group in Pittsburgh and a former Fed economist. Instead, officials are relying on “creative and innovative ways to get funds into the financial system.''

At the same time, the Fed edged closer yesterday to a rate reduction by saying in a statement after their meeting that financial-market strains have “increased significantly.''

Employment is weakening, export growth is slowing and risks to growth and inflation are “both of significant concern,'' the central bank said in its statement. After their Aug. 5 meeting, policy makers said such concerns applied only to inflation. The central bank yesterday dropped a reference last month to rising expectations that prices will increase.

`Push the Committee'

“The outcome is going to be driven by the incoming data,'' former St. Louis Fed President William Poole said in an interview with Bloomberg Television. If retail sales, industrial production and employment are weak, “that is going to push the committee probably to cut rates.''

Tumbling commodity prices, including a 37 percent decline in crude oil from a July 11 peak, ease pressure on the Fed to fight against inflation. The consumer price index fell 0.1 percent in August, the Labor Department said yesterday. So-called core prices, which exclude food and energy, rose 0.2 percent after a 0.3 percent gain in July.

The rout sparked by the collapse of the U.S. subprime mortgage market has cost financial institutions worldwide $516 billion in writedowns and losses since the start of 2007. Firms have raised $362 billion of capital in response.

Since the credit crisis began in August 2007, the Fed has lowered the rate on direct loans to commercial banks and created one loan program for banks and two for securities firms paydayloans. It also secured the sale of Bear Stearns Cos. to JPMorgan Chase & Co. by taking on $29 billion of mortgage-backed debt and other assets.

AIG Takeover

Late yesterday, the Fed agreed to an $85 billion loan for AIG, the insurer hit by billions of dollars of writedowns on investments in securities tied to mortgages. The government will get a 79.9 percent equity interest in the company as a result.

Fed staff officials told reporters on a conference call that AIG's extensive operations across financial markets, including substantial business outside of insurance regulators' jurisdiction, meant the company needed rescuing.

“The Fed is reasonably confident that the fundamental and liquidity problems in the financial markets can be adequately addressed with the various tools they have at their disposal,'' said David Resler, chief economist at Nomura Securities International Inc., in New York. “It doesn't require a shotgun approach to macroeconomic policy.''

Rate Cuts

New lending mechanisms and rate cuts totaling 3.25 percentage points in the past year have so far failed to revive lending among banks.

Central banks around the world pumped more than $210 billion into the financial system this week as they sought to alleviate the credit-market seizure.

The New York Fed injected $70 billion of temporary reserves into the banking system yesterday and $70 billion Sept. 15, the most since the September 2001 terrorist attacks. The central bank has also provided billions of dollars through direct loans of cash and Treasuries.

Still, banks are hoarding cash, driving up short-term lending rates.

The cost of borrowing in dollars overnight more than doubled to the highest since 2001. The overnight dollar rate soared 3.33 percentage points to 6.44 percent yesterday, its biggest jump in at least seven years, according to the British Bankers' Association. The rate was as low as 2.07 percent in June.

Economists anticipate the economy will slow to a 1.2 percent annual growth rate, or less than half the prior quarter's pace, as consumer spending, the biggest part of the economy, stalls this quarter, according to a Bloomberg survey this month.

“The financial-market turmoil we have seen has tightened financial conditions,'' Brian Sack, who used to serve as head of monetary and financial market analysis at the Fed and is now a vice president at Macroeconomic Advisers in Washington, said in a Bloomberg Radio interview. “That is really going to impart some restraint on the economy.''

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The European Central Bank and the Bank of England joined the Federal Reserve in taking action to soothe financial markets spooked by Lehman Brothers Holdings Inc.'s bankruptcy filing.

The ECB said it awarded banks 30 billion euros ($43 billion) in a one-day money-market auction that was more than three times oversubscribed. The Bank of England loaned banks 5 billion pounds ($9 billion) for three days. Earlier, the Federal Reserve widened the collateral it accepts for loans to securities firms.

Stocks plunged and the cost of borrowing dollars surged after Lehman became the latest victim of a yearlong credit squeeze. Financial institutions worldwide have reported more than $500 billion in losses and writedowns and the credit-market turmoil has erased $11 trillion from global stocks in the past year.

“It remains to be seen whether today's operation will be sufficient to restore market confidence,'' said Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland Group Plc. “The ECB will likely wait for the U.S. open to consider more aggressive action. Key will be how credit and equity markets develop in the coming days.''

The ECB said it injected the funds at a marginal rate of 4.30 percent. The Swiss central bank offered liquidity through its overnight facility for the first time since Feb. 22.

“We have to be extraordinarily alert,'' ECB President Jean-Claude Trichet told reporters in Frankfurt today. “We have said it in recent weeks'' that “it's an ongoing market correction'' with “episodes of a high level of volatility.''

China, Australia

China cut interest rates for the first time in six years and the Reserve Bank of Australia added A$2.1 billion ($1.7 billion) through so-called repurchase agreements today. The Bank of Japan, whose markets were closed today for a holiday, said it was monitoring the situation.

“The job of central banks now is to ensure there is sufficient liquidity in the system and they're assuring market participants of that,'' said Thomas Mayer, co-chief economist at Deutsche Bank AG in London.

The Fed also yesterday boosted its program for lending Treasuries to bond dealers by $25 billion, bringing it to $200 billion quick payday. At the same time, a group of 10 banks that includes JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. formed a $70 billion fund to ensure market liquidity.

Yields on two-year Treasury notes fell below 2 percent for the first time since April on speculation the Fed will need to cut rates. U.S. index futures dropped, with December contracts on the Standard & Poor's 500 Index falling 3.3 percent. The cost of borrowing dollars overnight jumped to 3.11 percent today from 2.15 percent.

No Rate Cut Yet

The ECB and the Bank of England may nevertheless hold off cutting rates right away as they seek to curb inflation. The ECB has spent much of the past year arguing that it can use its money market operations to tackle the credit crisis and doesn't need to resort to rate cuts.

“Rate cuts are only likely to be forthcoming if financial markets melt down in the coming days or weeks,'' said David Mackie, chief European economist at JPMorgan Chase & Co. “For the time being, European policy makers look like they will continue to hold the line on the separation of powers. At some point though, that line could be reached.''

Trichet said in his speech today that “price stability is a prerequisite for financial stability, a very important objective at the current juncture.''

The ECB was the first central bank to respond when credit markets first seized up in August last year by offering financial institutions unlimited funds. Banks today asked for 90.3 billion euros in funds, close to the 94.8 billion euros bid on the first day of the crisis last year.

“The results of the one-day refinancing bill auction show that demand for liquidity is currently very high and highlights how fragile the current situation is,'' said Cailloux. “The ECB will likely take note that the financial system remains starved of cash and that it might thus be forced to step in again.''

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In America, Hayes Clinical Laboratory is a single testing facility cornered in by the national powerhouses that dominate their industry. But, when the family-owned business tapped the overseas market, it scored a deal that could lead to dozens of clinical testing facilities in India.

Boynton Beach-based Hayes Clinical made a joint venture in June with the Neon Healthcare and Research Institute, one of the largest lab companies in Calcutta, in India’s West Bengal state. They petitioned the government to set up labs in 54 hospitals and academic medical centers around that area.

Hayes Clinical would help with training, introducing more advances tests and facility design. It would also make sure Neon follows the same accreditation standards as an American lab would under the Centers for Medicare and Medicaid Services, Hayes Clinical VP Trent Hayes said. India doesn’t have any equivalent regulating body. In that country, health care is a cash market.

The Indian market for diagnostic tests was valued $520 million in 2007, according to a research report by New York-based Kalorama Information. It projected that it would grow to $1 billion in 2012.

“Many have speculated that growing demand for private health care in India will drive demand for more advanced diagnostic equipment,” the report noted.

In exchange for its work, Hayes Clinical would get an annual payment from Neon. Trent Hayes would not say how much.

Trent Hayes is one of five family members who work at the company. Shelby Hayes, a Kentucky native who has worked in lab testing since 1962, founded Hayes Clinical in 1999. He previously ran the lab at Bethesda Memorial Hospital. His son is Trent Hayes, his daughter heads the lab and his son-in-law is company president.

Competing as a stand-alone lab is tough credit scores. Most health plans have exclusive contracts with one of the nation’s two dominant testing companies, Quest Diagnostics and Laboratory Corp. of America. Hayes Clinical has offered to do the services for less, but the insurers are locked into these contracts and won’t deal with them, said Judy Hayes, the company’s CFO and Shelby Hayes’ wife. While some patients pay cash or have covered insurance, about 90 percent of the company’s business is Medicare.

That means doctors who send most of tests for insured patients to Quest and Lab Corp. would have a third pickup box outside their door for Hayes Clinical. Shelby Hayes said his long relationships with local doctors have kept those boxes busy.

Expansion under such circumstances was difficult, so the Hayes family turned to Gora Aditya, an India native and co-owner of Hayes Clinical. He now resides in the Toronto area, where he runs a large clinical lab and real estate companies. Aditya heard about Neon’s desire to partner with an American lab, and he brought Hayes Clinical on board.

But, Hayes Clinical isn’t alone in its foray into India. In 2007, Quest opened an office in Delhi to provide diagnostic services to clinical research organizations.

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Gasoline prices fell yet again, according to a nationwide survey of gas station credit card swipes. The decline comes as focus turns toward Hurrican Ike — expected to hit the central to southern coast of Texas by the end of the week.

The average price of regular unleaded gasoline fell 0.6 cents to $3.652 a gallon from $3.658 a day earlier, motorist group AAA said Tuesday.

Hurricane Ike front and center and on a path toward the Gulf of Mexico, where it could make landfall anywhere from northern Mexico to southern Louisiana. Ike was downgraded to a Category 1 storm late Monday but could still regain strength. It cut through Cuba as a Category 3 hurricane late Sunday.

Gas prices eased Texas and Florida but rose in the Carolinas, Louisiana and Georgia. Nationwide, Alaska and Hawaii remained the two states with gas prices still tracking above $4 a gallon. The cheapest gas was now found in New Jersey, where prices averaged $3.426 a gallon bad credit payday loans.

Crude prices have trended lower amid heightened concern about weakening demand and in reaction to the slew of storms and hurricanes. Last week, oil prices fell to their lowest level in five months.

On Monday, crude futures for October delivery gave up nearly $3 in gains to end little changed as concerns about Ike dissipated. Early Tuesday, oil prices fell $1.15 a barrel to $105.19.

Meanwhile, Gas has fallen about 11.2%, or 46 cents, from the record high average of $4.114 that AAA reported on July 17, but they are still 83 cents above this time last year.

While Americans had cut back on driving during the typically heavy traffic summer months, it remains to be seen whether the trend will hold. 

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China's inflation weakened to the slowest pace since June 2007 and export growth cooled, stoking speculation the government will cut taxes and ease loan restrictions to spur the world's fourth-largest economy.

Consumer prices rose 4.9 percent in August from a year earlier, less than economists estimated, after gaining 6.3 percent in July, the National Bureau of Statistics said today. Exports rose 21.1 percent in August, down from July's 26.9 percent gain, the Customs Bureau said.

Stocks rose, erasing earlier losses, on expectations China may lower taxes, slow the yuan's gains and ease lending restrictions to protect jobs at exporters after four quarters of slowing economic growth. Cooling inflation also leaves room for the government to counter power shortages by raising energy prices, encouraging refiners and generators to boost output.

“The good news is that the price pressures that have been bothering China over the past 18 months have been decisively subdued,'' said Tao Dong, chief Asia economist at Credit Suisse Group AG in Hong Kong. “The bad news is that perhaps this reflects the economy has slowed more than the government bargained for.''

The CSI 300 Index of stocks closed 0.2 percent higher on speculation that company profits may benefit from measures to stimulate growth. Officials are working on a plan for as much as 400 billion yuan ($58 billion) of tax cuts and spending to prevent an economic slump, according to economists and reports in domestic news media.

Yuan Rises

The yuan rose to close at 6.8385 against the dollar in Shanghai from 6.8404 immediately before the report was released. The currency has climbed only 0.2 percent against the dollar this quarter after a 6.5 percent advance in the first half. Gains hurt exporters by making their products more expensive.

Inflation across Asia may peak in the fourth quarter and fall “sharply'' in 2009 as oil prices decline and economic growth slows, Rob Subbaraman, a Hong Kong-based economist at Lehman Brothers Holdings Inc. said last month. Crude oil has fallen 30 percent from a record on July 11.

Consumer prices in Japan rose 2.3 percent in July, the fastest pace in more than a decade, while Malaysia's inflation accelerated to 8.5 percent, the quickest in more than 26 years.

China's producer prices climbed 10.1 percent, the fastest pace since at least 1996, after rising 10 percent in July, today's data showed.

Energy-Price Increases

That may be a peak reflecting past commodity-price increases, said Ha Jiming, a Hong Kong-based chief economist at China International Capital Corp., adding that the government may have “more room for domestic energy-price adjustments.''

The government has already raised energy prices this year to improve refiners' and generators' margins and ease the nation's sixth year of power shortages faxless payday loan.

August's trade surplus climbed to a record $28.7 billion as import growth weakened to 23.1 percent from a year earlier, the slowest pace in almost a year, on falling commodity prices. Foreign direct investment pumped another $7 billion into the financial system last month, the commerce ministry said today.

“Priority will now return to solely focusing on supporting growth,'' said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong.

Consumer-price inflation has slowed for four months, edging closer to the central bank's target of 4.8 percent for the year. February's 8.7 percent pace was the fastest in 12 years. Food prices rose 10.3 percent in August from a year earlier after gaining 14.4 percent in July. Non-food prices increased 2.1 percent, the same as in July.

Factory Investment

The expansion in factory and property spending, one of the key drivers of the economy, maintained its pace in the eight months through August. Urban fixed-asset investment rose 27.4 percent to 8.49 trillion yuan from a year earlier, the statistics bureau said today. That compared with a 27.3 percent gain for the first seven months.

China's economy expanded 10.1 percent in the second quarter. The pace of growth remains the fastest of the world's 20 biggest economies.

Weaker overseas demand, rising costs and a higher currency have put pressure on exporters of shoes, toys and clothes.

In July, the central bank eased restrictions on how much banks can lend by raising 2008 loan quotas for national banks by 5 percent and regional lenders by 10 percent, according to reports by Goldman Sachs Group Inc., BNP Paribas SA, and China Merchants Bank Co.

Lending Restrictions

The central bank may increase loan quotas by another 5 percent to 10 percent no later than November, according to Sun Mingchun, an economist at Lehman in Hong Kong. The government may cut income tax and, from early 2009, allow tax deductions connected with companies' capital expenditure, he said.

The People's Bank of China has kept interest rates unchanged at a decade high this year. It hasn't increased the reserve ratio for banks — the proportion of deposits that lenders are required to set aside — since pushing it to a record 17.5 percent in June.

The record trade surplus may force the central bank to make extra efforts to prevent excess cash in the financial system from stoking inflation. Its main tools for freezing or soaking up money have been bill sales and the bank reserve requirements.

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