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The U.S. Treasury said it plans to sell $55 billion in long-term government debt this quarter and bring back auctions of three-year notes, as a slowing economy balloons the budget deficit to a record level.

The Treasury's quarterly refunding of longer-dated securities is the biggest in four years. Three-year notes, which had been suspended since May 2007, will now be issued on a monthly basis, the department said in Washington today. The government will also increase the frequency of 10-year and 30- year debt auctions.

Borrowing needs have surged in the wake of higher spending, a $700 billion financial rescue plan and plunge in tax receipts amid what economists estimate may be the worst recession since the early 1980s. Debt issuance may increase further after bond trading firms this week predicted the budget shortfall will more than double to $988 billion in 2009.

“These are highly uncertain times,'' Karthik Ramanathan, head of the Treasury's debt management, said in a press briefing. He said private deficit estimates “vary greatly, and the marketable borrowing estimates are even broader,'' ranging from a projected shortfall this year of $1.1 trillion to $2.1 trillion.

The Treasury plans to auction $25 billion in three-year notes on Nov. 10, $20 billion in 10-year notes Nov. 12 and $10 billion in 30-year bonds Nov. 13, the department said.

Most Since 2004

The total was in line with analysts' forecasts and was the largest quarterly figure since the first three months of 2004. The department last quarter said it was considering a second reopening of the 10-year note and a move to quarterly new issues of 30-year bonds.

In a Bloomberg News survey of six analysts, the median estimate predicted $25 billion in three-year note sales, $20 billion in 10-year-note sales and $8 billion in bond sales.

Three months ago, the Treasury's announced quarterly sales of $17 billion in 10-year notes and $10 billion in reopened 30- year bonds.

“We will continue to monitor projected financing needs and make adjustments as necessary including, but not limited to, the reintroduction or establishment of other benchmark securities,'' Ramanathan said in a statement.

The Bush administration's most recent budget forecast, issued in July, projected a $482 billion deficit for the 2009 fiscal year, which started Oct. 1. Since then, the government has taken over mortgage companies Fannie Mae and Freddie Mac, intervened to save insurance company American International Group Inc., and embarked on the bank rescue program.

$550 Billion

As a result, borrowing needs are expected to rise to a record $550 billion in the three months to Dec. 31, the Treasury said Nov. 3. That follows a $530 billion record in the July to September quarter bad credit pay day loans.

“From a fiscal perspective, borrowing requirements have steadily increased,'' the Treasury said in charts prepared for its advisory committee meeting. “The economic outlook continues to present challenges.''

The borrowing announcement noted that upcoming auctions of 10-year and 20-year Treasury Inflation Protected Securities, also known as TIPS, will help meet financing needs. In the department's meeting this week with bond dealers, there was debate over whether five-year TIPS are an effective way for the government to borrow.

Longer-Dated TIPS

“Recent cost studies as well as investor participation statistics suggest that TIPS issuance, particularly for shorter- dated TIPS, has not reduced borrowing costs nor diversified the investor base, both of which were objectives at the start of the program,'' minutes of the meeting said.

“Focusing on longer-dated TIPS may be an approach to reducing effective costs, capturing a higher inflation premium, and increasing liquidity among benchmark TIPS instruments while at the same time extending the duration of the portfolio,'' the Treasury said.

Ramanathan told reporters there were no immediate plans to change the TIPS borrowing calendar, which includes a prospective five-year note TIPS sale in April. He noted the cost studies and said the Treasury would consider their findings.

The government sells debt to finance the excess of spending over revenue. The Treasury also sells shorter-term debt on a monthly and weekly basis to manage the government's finances.

In today's announcement, the Treasury said it expects to issue cash-management bills, “some longer dated,'' during the current quarter. The Treasury said unscheduled reopenings of government securities will be the “exception'' in its debt management because the department has a policy of “transparency, regularity and predictability.''

Treasury, Fed

The Treasury also has borrowed money on behalf of the Federal Reserve, which has launched a slate of new lending programs to fight the credit crunch.

Ramanathan said in the statement that the department “strongly encourages'' financial firms to step up efforts to settle failed transactions in the secondary debt market.

“Recent market turbulence and the low level of short-term interest rates resulted in a substantial and broad increase in persistent fails in U.S. Treasury securities,'' Ramanathan said. “Other regulatory measures may be considered if private sector efforts are not implemented.''

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MOD-PAC Corp. said revenues declined in the third quarter but the printer and paper board packaging company was able to turn a slight profit.

Net income was $14,000 compared to a $1.1 million loss last year.

Revenue totaled $12.6 million, off 3.4 percent from $13.1 million in the 2007 second quarter cash loan till pay day in one hour.

Officials of the Buffalo-based company (NASDAQ: MPAC) said the sluggish economy hampered sales but restructured operations have helped reduce costs.

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The International Monetary Fund reached agreement with Ukraine on a $16.5 billion loan to help support the nation's financial system as turmoil in global credit markets and recession concerns sweep eastern Europe.

The 24-month loan is conditional on parliamentary approval of legislation to support the country's banks, the Washington- based lender said today in a statement. Ukraine also will need to balance its budget by reining in social spending and narrow the current-account deficit, the Kiev-based central bank said in a separate statement.

Eastern Europe is being buffeted by the global credit crunch as investors stung by losses in developed nations sell riskier emerging-markets stocks, bonds and currencies. Ukraine is the first nation in the region to receive IMF help during the crisis. Belarus this past week joined Iceland, Pakistan, Hungary and Ukraine in requesting at least $20 billion of emergency loans from the IMF to help repay debt.

“The money is only half of the issue, conditionality is key,'' Timothy Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said in a telephone interview. “We hope the Fund is maintaining its push for a more flexible exchange rate, far-reaching reforms in the banking sector and more privatization.''

Banks

President Viktor Yushchenko faces an economic meltdown as prices for the nation's main exports, including steel, drop and a weakening currency makes goods purchased abroad more costly. He has urged the cabinet to raise custom duties to curb imports and help domestic producers boost exports to counter the widening trade gap.

Ukraine agreed to set up a fund that will buy stakes in the nation's banks and pass legislation that forces lenders to halt dividend payments to retain capital, central bank official Serhiy Kruhlik said in a telephone interview in Kiev today.

The central bank took control of closely held Prominvestbank on Oct. 7 and promised an injection of 5 billion hryvnia ($830 million) to bail out Ukraine's sixth-biggest bank by assets after a run by depositors.

The government also plans to raise the state guarantee on bank deposits to 100,000 hryvnia from 50,000 now and will use proceeds from privatizations and bond sales for the bank bailout fund, according to Kruhlik. The parliament is scheduled to vote on the amended legislation on Oct no teletrack payday loans. 28.

`No Consensus'

“As of now, there is no consensus between Ukrainian political forces about a stabilization program,'' said Svitlana Maslova, an analyst at Barclays Capital in London. Investors “will closely look at the details of the policy package to assess the impact of the program.''

Industrial production contracted 4.5 percent from a year earlier in September and the trade gap widened to a record $12.5 billion in the eight months through August.

Ukraine's current-account deficit may widen to $15 billion this year, central bank governor Volodymyr Stelmakh said earlier this month. The current-account gap was $7.5 billion, or about 6 percent of gross domestic product, in the first eight months of the year.

The former Soviet republic's currency tumbled 13 percent last week and touched a record 6.0812 per dollar on Oct. 24. the lowest since the hryvnia was introduced in 1996. Ukraine's annual inflation rate almost tripled to a record 31.1 percent in May before easing back to 24.6 percent in September.

Elections

Ukraine is the least creditworthy of Europe's transition economies measured by the cost of credit-default swaps, conceived to protect bondholders against default. Its economic predicament is complicated by a political crisis that led to collapse of the government and calling of early elections.

Yushchenko dissolved the parliament on Oct. 8 and a new one will be chosen on Dec. 14, the second national elections in as many years. His party, which seeks closer ties with the European Union and the North Atlantic Treaty Organization, quit the coalition on Sept. 3 after former ally, Prime Minister Yulia Timoshenko, joined with the pro-Russian opposition to strip the president of some powers.

Yushchenko and Timoshenko joined forces to win the 2004 election after the bloodless Orange Revolution on promises to move the country toward the West. After a split in 2005, the two reunited before last year's elections.

Since then, Yushchenko and Timoshenko have been locked in a battle over how to tackle Europe's fastest inflation rate, sell state assets and how to spend budget funds.

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Nektar Therapeutics will sell some of its inhaled drug technology to Novartis AG for $115 million in cash.

San Carlos-based Nektar (NASDAQ: NKTR), led by CEO Howard Robin, will sell powder and liquid drug formulations, capital equipment and factory leases, along with 140 Nektar workers. Novartis (NYSE: NVS) also is buying some intellectual property in the deal.

Nektar will keep its Ciprofloxacin inhaled powder program, its Amikacin inhale program (NKTR-061) — set for Phase III testing later this year — and inhaled vancomycin, which is entering Phase II tests early next year payday advance low fees.

This deal requires regulatory approval and has other conditions. It should close by year end.

Robin said the assets being sold “had little future value for Nektar.”

Novartis is based in Basel, Switzerland and led by CEO and Chairman Daniel Vasella, M.D.

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St. Jude Children’s Research Hospital CEO William Evans has been elected chairman of the Tennessee Technology Development Corp.

TTDC is charged with improving Tennessee’s competitiveness in research and development, venture capital formation and entrepreneurship. Last year, the state infused $5 million into the nonprofit organization.

Evans, who is a doctorate of pharmacy, will “lead TTDC’s revitalization strategy as the organization works to improve the state’s economic competitiveness in the knowledge economy of the 21st century,” according to a TTDC statement.

“Dr. Evans is a life-long Tennessean who has built a reputation as a leader within this state’s medical and scientific research community for more than 30 years,” said Eric Cromwell, CEO of TTDC, in a statement. “He acutely understands the strengths of Tennessee’s research infrastructure and knows firsthand the challenges and opportunities of bringing new innovations and ideas out of the lab to market faxless payday loans. Bill is uniquely qualified to provide the insight we need as TTDC launches new programs and initiatives to build innovation capacity and encourage more technology transfer from our state’s research institutions.”

Evans said TTDC complements the work of the Department of Economic and Community Development by “focusing on the pillars of innovation as an economic engine.”

“Tennessee has extraordinary assets, and we need to invest strategically to effectively leverage these assets to compete and win in emerging industries like biopharmaceuticals, energy technologies and medical devices,” he said in a statement.

Based in Memphis, St. Jude Children’s Research Hospital is a leading pediatric treatment and research facility focused on children’s catastrophic diseases. It employs more than 3,000 in Memphis.

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The Federal Reserve arranged to channel $30 billion into the global financial system by opening currency swap lines with four central banks to relieve shortages of dollars in markets worldwide.

The Fed and central banks in Australia, Denmark, Norway and Sweden set up the currency exchange to address “elevated pressures'' in dollar funding in markets, the Board of Governors said today in a statement.

The U.S. is broadening its effort to revive confidence in markets amid concern a $700 billion plan to rescue the banking system may face delays in Congress. The Fed last week expanded its temporary swap lines with the European Central Bank and Swiss National Bank by $70 billion, and created $110 billion in new facilities with central banks in Japan, the U.K. and Canada.

“This is another weapon in the arsenal of governments aimed at boosting confidence,'' said Joshua Williamson, a senior strategist at TD Securities Ltd. in Sydney. “Hopefully it will help market sentiment, stop banks from hoarding cash and start greasing the wheels of the financial economy.''

After the announcement borrowing costs for Australian banks fell from the highest since Bear Stearns Cos. collapsed six months ago.

Money-Market Rates

The difference between the rate banks charge each other for three-month loans and the overnight indexed swap rate declined to 82.5 basis points as of 4:10 p.m. in Sydney from as much as 93.25 points earlier today.

The yen declined as the plan gave investors confidence to buy assets that have higher yields outside Japan. The yen fell to 155.69 per euro at 7:38 a.m. in London from 154.63 late yesterday in New York. It was at 105.92 versus the dollar from 105.56.

The programs “are designed to improve liquidity conditions in global financial markets,'' the Fed said. “Central banks continue to work together during this period of market stress and are prepared to take further steps as the need arises.''

Central bankers are trying to break a credit logjam in money markets as $522 billion in writedowns and losses tied to the U.S. mortgage market prompt bankers to hoard cash.

Preemptive Moves

“It shows the severity of the problem the Fed anticipates as we head into the last quarter of the year, and it's putting in place the infrastructure needed,'' said Venkatraman Anantha- Nageswaran, head of research at Bank Julius Baer & Co. Ltd. in Singapore. “The Fed's pre-emptive moves in setting up these swap lines suggest that it's not taking any chances.''

The Federal Open Market Committee, a group of Fed Board governors and regional reserve bank presidents, voted to authorize a swap facility totaling $10 billion each for the Reserve Bank of Australia and Riksbank in Sweden, and $5 billion each for the central banks of Norway and Denmark cash advance loan.

The Bank of Japan supplied $30 billion today to banks and brokerages in its first money-market operation since last week's $60 billion swap arrangement with the Fed.

Bank of England

The Bank of England yesterday allocated $30.1 billion in loans, its fourth overnight dollar auction and the most since it began the emergency sales last week.

“This agreement is a part of our precautionary measures and provides the Riksbank with additional flexibility to provide U.S. dollar liquidity if the need should arise,'' said Riksbank Governor Stefan Ingves in a statement on the bank's web site. “Our assessment is that financial stability in Sweden is satisfactory and that the Swedish banks are profitable and solvent.''

Swap lines were first established in December when officials joined forces to boost dollar liquidity around the world after interest-rate reductions in the U.S., the U.K. and Canada failed to ease concerns about bank lending.

Joint Action

The joint action is the latest attempt by central bankers to fight the financial crisis, which deepened last week after Lehman Brothers Holdings Inc. filed for bankruptcy and the U.S. government took over American International Group Inc.

Central banks in Frankfurt, London and Zurich this week kept up their dollar auctions to provide liquidity to financial markets.

Denmark's central bank on Sept. 22 said it's raising the issuance of Treasury bills through an extraordinary auction of as much as 25 billion kroner ($4.9 billion) to meet lender demand for secure notes. The notes can be used as collateral by so-called primary dealers to boost liquidity.

Sweden's central bank on the same day decided to loosen the rules on what collateral it will accept when lending money in order to increase liquidity. Australia pumped more than A$12 billion ($10 billion) into its banking system last week.

“The swap serves to alleviate a shortage of U.S. dollar liquidity which has affected market participants around the world including in the Asia-Pacific time zone,'' the Australian central bank said.

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Ecuador registered a budget surplus in the first half that will allow the government to keep investing, President Rafael Correa said.

Ecuador's central government had a surplus of $508 million and public-sector entities such as municipalities and state-run universities had a $2.17 billion surplus, he said today in his weekly television address.

“This surplus is excessive,'' Correa said. “We have to boost our efficiency in investing.''

On Sept. 28, Ecuador will hold a referendum on a new constitution that calls for raising spending on health and education payday loan. Correa this week replaced Finance Minister Wilma Salgado after she said that Ecuador faces a budget deficit of about $2.4 billion next year and recommended slowing the pace of spending.

“$3.9 billion in investments will be carried out this year,'' Correa said.

With high prices for crude oil, the OPEC member's main export, Ecuador has met its repayment schedule on its $3.9 billion in foreign debt during Correa's term.

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Electric distribution company Oncor, a subsidiary of Energy Future Holdings Corp., said that 58,000 of its consumers in southeast Texas remain without power around noon on Monday, in the wake of Hurricane Ike.

Oncor said 3,000 employees are working in affected areas, primarily southeast Texas, and aim to restore power to customers by the end of this week. As of Saturday, about 108,000 homes and businesses in Oncor’s specific service area were without power. That figure has been cut in half over the last two days cashadvance.com.

According to the Public Utilities Commission, a total of 2.4 million consumers in the region lost power as a result of the devastating hurricane.

Although there were no power outages in Oncor’s Dallas-Fort Worth service area, the company says areas such as Lufkin, Nacogdoches and Tyler did take a hit.

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European Central Bank council member Axel Weber said the outlook for inflation has brightened and the recent fall in oil prices is “reassuring.''

“We're more confident now than a few weeks ago that the recent developments have contributed toward meeting our objective'' to ensure price stability, Weber said in a press briefing today after a meeting of European finance officials in Nice, France. Still, “I don't think we're in the situation that we can give the all-clear yet.''

Oil prices have receded from a record $147.27 a barrel in July, while they are still up more than 26 percent over the past year, crimping consumers' and companies' spending power. The ECB is concerned companies will raise prices to pass on higher raw- material costs and unions will push through bigger raises to compensate workers for the increased cost of living.

Euro-region inflation is currently at 3.8 percent after reaching a 16-year high of 4 percent in July, still almost double the ECB's limit of just below 2 percent.

The drop in oil and commodity prices “will help us to work toward our stability mandate,'' Weber said. “On the other hand, there are many pipeline effects,'' he added, referring to import and producer prices that may filter through into consumer-price inflation.

`Astonishingly High'

The ECB raised its inflation projections this month to around 3.5 percent for 2008 and 2.6 percent for 2009. At the same time, ECB staff lowered their growth forecasts for this year and next to about 1.4 percent and 1.2 percent, respectively free credit report .com.

Some of the recent wage demands are “astonishingly high'' and do not fully take into account the economic perspective and the price developments that the ECB foresees, Weber said. “We're seeing much stronger wage pressure than in the past.''

Europe's economy shrank 0.2 percent in the second quarter from the previous three months and may not recover in the current period as exports falter and consumer spending slumps. The contraction was the first since the introduction of the euro in 1999.

IG Metall, Germany's biggest labor union, representing 3.5 million workers, said Sept. 8 it will seek a pay increase of between 7 percent and 8 percent when wage negotiations start on Oct. 2. That would be the biggest pay increase in at least 16 years. Workers at Ireland's Electricity Supply Board are demanding an 11.25 percent raise.

“We will do what is needed'' to ensure price stability, Weber said. “We're not pre-committed at this stage.''

Weber's ECB colleague, Nout Wellink, said in an interview this week that interest rates are “adequate'' and there is no need to change them “at this very moment.'' He added that “it all depends on a very large extent on how wages are going to behave in the period ahead.''

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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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