The news at a glance

OPEC: Trying to set a floor under prices

Hoping to stem the precipitous slide in prices, the Organization of Petroleum Exporting Countries last week ordered its member nations to cut oil production by 1.5 million barrels a day, said John Porretto in the Associated Press. Oil prices have fallen 57 percent from their July high of $147 per barrel, and OPEC officials “took pains to emphasize that OPEC’s move was predicated by a need not to raise prices but to set a floor under them.”

Whatever the motivation, the move failed to stem the price slide, said Kenneth Musante in CNNmoney.com. Prices early this week fell below $62 a barrel, as the worldwide economic slowdown crimped demand. Some OPEC members worry that “the record high crude prices in July, and the subsequent economic downturn, may have permanently impaired demand for oil.” Those worries could be well placed. Although U.S. gasoline prices have fallen sharply, Americans in August drove 15 billion fewer miles than they did a year earlier. The 5.6 percent drop is the largest recorded since 1942.

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Insurance: Spreading the bailout wealth

In an indication of how the government’s $700 billion rescue program “could turn into a piggy bank for a range of beleaguered industries,” the U.S. Treasury might buy stock in some of the largest American insurance companies, said Deborah Solomon in The Wall Street Journal. MetLife, Prudential Financial, and New York Life have requested capital infusions from the Treasury. “Insurers would normally tap capital markets to raise money.” But they’re not eager to do so now, “because their share prices have been so battered.”

Banking: Another one bites the dust

National City Bank, the venerable Cleveland institution that “was founded when Abraham Lincoln was just a prairie lawyer,” fell victim to the credit crisis this week, said Teresa Dixon Murray in the Cleveland Plain Dealer. The bank agreed to a $5 billion takeover by Pittsburgh’s PNC Financial, after the U.S. Treasury refused to extend federal help to National City. “It was the volatile, unpredictable mortgage business that eventually did National City in.”

Investing: Hedge fund headaches

The $2 trillion hedge fund industry is in serious trouble, said Chris Hughes and Kate Burgess in the Financial Times. One-third of the world’s hedge funds could be forced to liquidate, as their lenders demand repayment of loans backed by hard-to-sell securities. Many hedge funds—large, mostly unregulated investment pools that often invest in exotic securities—“are grappling with a wave of redemptions from their own investors.” Many funds borrowed against such securities and are facing repayment demands from their lenders as the securities’ values have plunged.

Autos: Porsche climbs into VW

German automaker Porsche said this week it would increase its stake in Volkswagen to 75 percent, “so it can record VW’s profit and revenue on its own books,” said Steve Goldstein in Marketwatch.com. Porsche had previously owned 35 percent of VW, below the threshold for counting VW’s results as its own. The German state of Lower Saxony owns 20 percent of VW and might resist Porsche’s move, fearing a loss of jobs at Saxony’s largest employer. “VW’s unions also are upset at the prospect of Porsche ownership.”