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Markets start slow Monday

NEW YORK, Dec. 15 (UPI) -- U.S. markets started slowly Monday with investors beginning a traditional vigil that coincides with Federal Reserve Open Market Committee meetings.

Many economist predict the two-day meeting, which began Monday, will conclude with an announcement of a federal fund rate cut, which frees up money for banks and business. Stocks, typically, enter a holding pattern while the meeting takes place.

In late-morning trading, the Dow Jones industrial average fell 67.22 points or 0.78 percent to 8,562.46. The Standard & Poor's 500 lost 9.84 or 1.12 percent to 869.89. The Nasdaq composite index shed 31.03 or 2.01 percent to 1,509.69.

The benchmark 10-year U.S. Treasury bond fell 2/32 to yield 2.53 percent.

The euro rose to $1.3663, compared to Friday's $1.3374. Against the Japanese yen, the dollar fell to 90.655 yen, down from Friday's 91.04 yen.

In Tokyo, the Nikkei average gained 428.79 points to 8,664.66, up 5.21 percent.

Bush seeing Detroit with eye on history

ABOARD AIR FORCE ONE, Dec. 15 (UPI) -- U.S. President George Bush said negotiations for aiding the auto industry are under way but he's not quite ready to unveil any of the details.

"We're now in the process of working through with the stakeholders a way forward and we're not quite ready to announce that yet," Bush said to reporters aboard Air Force One on a flight to Afghanistan, The Detroit News reported Monday.

General Motors Corp. has said it needs $4 billion by the end of the year, while Chrysler LLC has said it needs $4 billion to make it to April.

Bush's relationship with Detroit's Big Three has been uneven over the years, the newspaper said. On July 15, Bush flatly rejected the concept of bailing out a private company.

"Should the government bail out private enterprise? The answer is, no, it shouldn't," Bush said at press conference.

Now, however, Bush is thinking about "how he will be viewed by history," said David Rohde, a Duke University political science professor.

"Does President Bush really want as his legacy the loss of 3 million jobs and the collapse of the U.S. auto industry?" Sen. Debbie Stabenow, D-Mich., asked.

Banks stand to lose billions in fraud case

NEW YORK, Dec. 15 (UPI) -- Banks from Japan to France say their exposure to fraud conducted by a New York trading company could reach billions of dollars.

Trader Bernard Madoff was arrested last week after allegedly saying his trading firm was "basically, a giant Ponzi scheme." Authorities say the company could be responsible for $50 billion in fraud.

The Royal Bank of Scotland said its exposure to the scheme could add up to $600 million, CNN reported Monday.

Japan's Nomura said Monday it may be out $303 million and BNP Paribas in Paris said it may have lost $468 million.

Spanish banks also stand to record losses. Banco Santander said its exposure came to $23 million, while BBVA, the country's second largest bank, said it could lose $404 million.

British bank HSBC may have lost $1 billion, the Financial Times reported.

A Ponzi scheme operates by paying investors with money collected by other investors, rather than with legitimate returns on investments.

Securities and Exchange Commission inspectors are going through the books at Bernard L. Madoff Investment Securities, which has been in business since 1960.

Electrolux to cut 3,000 positions

STOCKHOLM, Sweden, Dec. 15 (UPI) -- Swedish appliance maker Electrolux said it would cut 3,000 jobs after sales stumbled in the final two months of the year.

The company said more cuts could follow as it completes a strategy of moving production to low-cost countries in 2010, The Times of London reported.

Electrolux said it was unlikely to reach its goal of reaching $412 million to $500 million in pre-tax earnings this year.

Electrolux said it would save $150 million in operating expenses by reducing staff.