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Behind the bailout, the economy lurks

WASHINGTON, Oct. 15 (UPI) -- The $700 billion U.S. bailout designed to put the financial market back on its feet isn't going to help the underlying economy, analysts said

As credit markets show signs of improvement, the economy remains on the brink of recession, The New York Times said Wednesday.

Recent monetary policy shifts "will stabilize the market, but the real economic issues remain," Ira Jersey of Credit Suisse told the Times.

"Everything the government has done is not going to prevent further deterioration in the economy," said Stuart Hoffman, chief economist at PNC Bank.

"At the end of all this, what matters is what the economy does," Hoffman said to the Times.

Experts predict the U.S. gross domestic product will show marginal growth in the third quarter, the Times reported. The next GDP figure is due for release Oct. 30.

Consumer spending, propped up by jobs and wages, accounts for two-thirds of the nation's economy.

Reflective of consumer spending Tuesday, investors were cheered by a strong earnings report released Tuesday by Intel Corp., but discouraged by news from PepsiCo. The soft drink giant said in a release that it would close six plants and dismiss 3,300 workers.

U.S. deficit bigger than expected

WASHINGTON, Oct. 15 (UPI) -- The U.S. government racked up a record $455 billion deficit in fiscal 2008, an even larger shortfall than expected, officials revealed Tuesday.

"The reality is that the next president will be inheriting a fiscal and economic mess of historic proportions -- the legacy of President Bush's failed policies," said Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee. "It will take years to dig our way out."

An even larger deficit is expected in the coming year as the United States works its way out of its worst financial mess since the Great Depression of the 1930s, the Los Angeles Times reported.

The previous worst deficit year was 2004 when the federal government bled $413 billion in red ink. Last year, the shortfall was $162 billion.

The deficit for the fiscal year ended Sept. 30 was even higher than the $438 billion the Congressional Bdget Office had projected just a week ago, The New York Times reported.

The White House proffered that the deficit amounted to 3.2 percent of the gross domestic product, leaving it well below the 6 percent record set in 1983 when President Ronald Reagan's tax cuts were put into effect, the Los Angeles Times reported.

"I am confident the economy can return to stronger growth with a declining deficit -- after working through current challenges -- if Congress limits wasteful and excessive spending," White House Budget Director Jim Nussle said in a statement.

Debate is candidates' last national forum

HAMPSTEAD, N.Y., Oct. 15 (UPI) -- The U.S. presidential debate Wednesday gives Democratic Barack Obama and Republican John McCain a final chance to get their message to nationwide audience.

The U.S. economy and other domestic issues are the topics for the final face-off for McCain and Obama is at Hofstra University in Hampstead, N.Y., and moderated by CBS News' Bob Schieffer.

A spokeswoman for Obama said the Illinois Democrat prepped for the debate in Toledo, Ohio, staying in touch with his team and economic advisers, CNN reported,

McCain groomed for the debate in New York, an aide said.

The key for Obama is to avoid any gaffes to maintain his lead over the Republican Arizona, analysts said.

Recent polls indicate McCain lags behind his Democratic counterpart in several Republican-leaning states, including Colorado, Florida, Nevada, North Carolina and Virginia, all states U.S. President George Bush won handily in 2004.

Former Republican presidential candidate Rudy Giuliani, a strong supporter of McCain, said McCain needs to "be himself."

"He's got to remind us about national security," Giuliani said. "In our concern about the economy, we can't forget about the fact that we're still involved with the threat of terrorism. And then he's got to contrast himself with the lack of experience with the other side."

Canadian Conservatives win bigger minority

OTTAWA, Oct. 15 (UPI) -- The Canadian Conservative party gained seats and won Tuesday's national election but fell 12 seats short of acquiring a majority government.

With all but a handful of polls confirmed early Wednesday, Canadian Prime Minister Stephen Harper's Conservatives won 143 seats, up from 127. Stephane Dion's Liberals won 76, a loss of 19 seats. The socialist New Democratic Party took 37 seats, a gain of seven. The separatist Bloc Quebecois won 50 seats in Quebec, a gain of five. The Green Party didn't win a seat, Elections Canada data showed.

The Globe and Mail reported early numbers showed voter turnout at about 60 percent, which, if confirmed, would be the lowest in Canadian history.

At his victory speech in Calgary, Alberta, Harper was quick to outline his top priority, the Canadian Broadcasting Corp., reported.

"The next few months will be crucial for our country," he said. "It is clear that our economy, indeed the global economic crisis, is the most important issue facing our country at this time."

Harper had Parliament dissolved Sept 7, a year early, saying he couldn't govern with repeated threats of non-confidence by the opposition in the 308-seat house.

High level of pesticides in Chinese beans

TOKYO, Oct. 15 (UPI) -- High levels of pesticide contamination were detected in Chinese frozen green beans exported to Japan, Tokyo-area health officials said Wednesday.

The public health office in Hachioji said a woman who ate the beans purchased from a local supermarket became ill, Kyodo news service reported. Health officials said the beans were found to contain organophosphate pesticide dichlorvos at 34,500 times the acceptable levels in imports.

Health officials said the frozen beans came from China's Shandong Province and were imported by Nichirei Foods Inc. for sale under the ''Ingen'' brand, the report said. CNN reported the contamination came to light only after tens of thousands of the Ingen brand packages had been sold.

Those who purchased the brand have been warned against eating the beans. Distributors have been told not to sell the product until the source of the sickened woman's illness becomes known.

Kyodo reported Japan is involved in resolving cases of frozen dumplings tainted with agrochemical methamidophos, which sickened three families.

China has been plagued by a number of product safety issues including tainted milk, dog food and children's toys, the report said.