NEW YORK (Reuters) –
Blackstone Group LP (BX.N) Chief Executive Stephen Schwarzman called for greater common oversight of the world's financial system to help extricate it from "the worst financial crisis in recent memory."

In a Tuesday opinion piece in The Wall Street Journal, the head of the big private equity firm said financial systems should be less dependent on rules, and that adherence to rules can get in the way of keeping up with and addressing developing issues in fast-moving markets.

Schwarzman in particular argued that the Sarbanes-Oxley governance act, passed after Enron Corp's 2001 collapse, "has made a fetish of compliance with complex regulations as a substitute for good judgment. This has not made American corporations any more stable or profitable, but it has damaged our competitiveness and weakened our domestic financial markets."

Schwarzman offered a seven-step plan to underlie any system of global financial regulation. The steps include:

1) Creating a common, cross-border set of accounting principles.

2) Structuring financial regulatory regimes across the world's major markets along broadly the same lines. Each country would have a finance minister, a central bank, and a single financial services regulator with a very broad mandate.

3) Making financial statements fully transparent, eliminating nothing. "Off-balance-sheet vehicles that suddenly return to the balance sheet to wreak havoc make a mockery of principles of disclosure," he said.

4) Fully disclosing all financial instruments to the regulator.

5) Giving the regulator oversight over all financial institutions in the markets, regardless of their charter, location or legal status.

6) Abolishing mark-to-market accounting for hard-to-value assets. This, he said, would stop financial institutions from having to suddenly take huge writedowns at "artificial, fire-sale prices," contributing to market instability.

7) Moving to a principles-based regulatory system rather than a rules-based system.

Blackstone, a private equity firm, is scheduled to report third-quarter results on Thursday. Its shares closed Monday at $8.61 on the New York Stock Exchange. The company went public at $31 per share in June 2007, weeks before the global credit crisis began.

(Reporting by Jonathan Stempel; Editing by Steve Orlofsky)

LONDON (Reuters) –
Stock futures pointed to a higher start on Wall Street on Tuesday as Democrat Barack Obama and Republican John McCain face the verdict of U.S. voters.

Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes were up 1.75-2 percent. Obama leads McCain in five of eight key battleground states as Americans vote in the White House race, according to a series of Reuters/Zogby polls released on Tuesday.

"A lot hinges on the flavour of what the stimulus (from Obama) is. If it's going to be just tax cuts, in which case people are going to look at some of the discretionary end of the consumer spend. People could say that potentially leisure and retail could do well," said Philip Lawlor, chief portfolio strategist at Nomura, London.

"My read is that it's going to be a big package of $150 billion but it's much more skewed toward infrastructure, in which case once the legislation starts to come through people will realize this has to be beneficial for the construction stocks and material stocks," he said.

"If it were for McCain and the Republicans, they would write a $5,000 check to each household and say it's up to you on how you are going to spend it. Obviously, the market would then say even if they save half of that, it's still going to be a lot of money that can go into additional consumption expenditure and durables," added Lawlor.

At least 130 million Americans are expected to cast votes on a successor to unpopular Republican President George W. Bush and set the country's course for the next four years on the economic crisis, wars in Iraq and Afghanistan, an overhaul of health care and other issues.

The first polls begin to close in parts of Indiana and Kentucky at 6 p.m. EST on Tuesday. Voting ends over the next six hours in the other 48 states.

In earnings news investors are likely to focus on full October same-store sales from Walgreen (WAG.N), third-quarter results from Papa John's International (PZZA.O) and fourth-quarter results from Emerson Electric (EMR.N).

Meanwhile, in after hours trading MasterCard (MA.N) shares jumped nearly 5 percent to $150.92 on Monday after the credit card company's third-quarter results beat analyst expectations.

Viacom (VIAb.N) stock jumped 4 percent to $20.8 in after-hours trade on Monday after the media company's third-quarter profit beat expectations.

Shares of Principal Financial Group (PFG.N) dropped 8.2 percent to $20.55 in after-hours trade after the life insurer posted its third-quarter results.

U.S. stocks ended little changed on Monday as investors picked up bargains on signs of further easing in the credit markets, but were unwilling to place big bets before the presidential election.

On Monday, the Dow Jones industrial average (.DJI) ended down 0.06 percent, the Standard & Poor's index (.SPX) was off 0.25 percent and Nasdaq Composite index (.IXIC) added 0.31 percent.

(Additional reporting by Dominic Lau; Editing by David Cowell)

SHANGHAI, China – Chinese shares dropped for a third day Tuesday, led by mining and metals stocks as economic worries deepened.

The benchmark Shanghai Composite Index opened down but advanced along with stocks in Japan and Hong Kong before fading to end down 0.8 percent, or 13.07 points, at 1706.7. The smaller Shenzhen Composite Index fell 2 percent to 456.97.

Buying sentiment was dampened by jitters about the slowdown in China's economy and grim third-quarter earnings for Chinese companies, said Huaxi Securities analyst Mao Sheng.

Miners and metals led the decline as prices of commodities fell across the board in London.

China Shenhua Energy Ltd., the country's biggest coal producer, shed 4.8 percent to 17.18 yuan, while Kailuan Clean Coal Ltd. lost 5.4 percent to 9.65 yuan.

Jiangxi Copper Ltd. sank 2.9 percent to 8.47 yuan. Baoshan Iron & Steel Corp. dropped 3.1 percent to 4.32 yuan.

Brokerages slid, with Haitong Securities, China's biggest brokerage by market value, diving the daily limit of 10 percent to 14.94 yuan. Haitong was especially hard hit because trading restrictions that affect 3.5 billion of its shares are due to be lifted in November and December, and investors worry about the increased liquidity. Citic Securities Ltd. slipped 3.9 percent to 16.06 yuan.

China Railway Construction Corp. plummeted 9.2 percent to 7.77 yuan, after the government of Nigeria asked the company to suspend work on an $8.3 billion project there and make changes in its contract.

Banks were among the few gainers, with China Construction Bank, Ltd. adding 1.3 percent to 3.95 yuan. Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, edged up 0.8 percent to 3.69 yuan.

In currency markets, China's yuan traded at 6.8375 to the U.S. dollar in over-the-counter trading around 0800 GMT, up from Monday's close of 6.8380.