Bernanke: US Slowdown Will Eclipse Dotcom Bust
THE TELEGRAPH: Federal Reserve chairman Ben Bernanke said that the impact of the current housing-led slowdown in America has the potential to be far deeper than the collapse of the dotcom boom at the start of the decade.

In his second day of semi-annual assessment of the economy on Capitol Hill, Mr Bernanke explained that the decline in home prices is causing a broader set of problems than the end of the technology bubble.

Comparing the 2001 slowdown to the economy's current woes, he said: "In fact the effects of the stock market declines were primarily on investments. In this case, consumers are taking the brunt of the effects."

Mr Bernanke also believes the Fed is in a more difficult position to respond now that it was in 2001.

However, he does not anticipate a period of stagflation - where stagnant economic growth and inflation coincide - saying that economy's current problems are "nowhere near" the set of issues that led to the stagflatory environment of the 1970's. Bernanke says US slowdown will eclipse dotcom bust >>> By James Quinn, Wall Street Correspondent

Mark Alexander (Paperback)
Mark Alexander (Hardback)

What’s Really Driving the Price of Oil?
SPIEGELONLINE INTERNATIONAL: The price of crude oil has doubled, from $50 to $100, within months. The increase cannot be attributed to the fundamental data, which have hardly changed. And the looming recession ought to drive the price down. So why is oil getting more expensive?

Cushing is the kind of place where you'd expect to see a cowboy ride around the corner and tie his horse to a rail in front of the Buckhorn Bar. This sleepy town of 8,000 on the Oklahoma prairie comes complete with a main street that could double for a set in a Western. Its biggest attractions include a defunct train station and a run-down movie theater, where the price of admission is $1.50.

Robert Felts, a friendly old man who works for the Cushing Industrial Authority, likes to show visitors the historic oil pump in the middle of town. He tells the story of how, in 1912, a giant oil field was discovered nearby that placed Cushing on the map and showered it with more than two decades of prosperity. Up to 50 million barrels of oil bubbled out of the ground each year in those days. "Our refineries could hardly keep up," says Felts. To solve the problem, the oil barons of the day had large storage tanks installed in the surrounding prairieland.

There isn't much to talk about besides oil in this small Oklahoma town. But reports on the situation in Cushing get global markets moving at 10:30 every Wednesday morning. That's when US government officials publish a figure that reflects the amount of oil stored in the hundreds of tanks which now stretch for miles along the horizon.

Located at a key intersection in the North American pipeline system, Cushing is home to the largest oil storage facility in the United States. Oil traded on the New York Mercantile Exchange literally changes owners here in Cushing. If the tanks are full, prices sink. But if levels in these tanks fall, prices rise. A rule of thumb for traders: Supply and demand control the market.

Normally, at any rate. But in recent months the conventional wisdom has flip-flopped. Within a year the price of a barrel of crude has doubled, from $50 to last week's high of $100. Nothing seems impossible now. Some analysts see prices rising to between $120 and $150, which would have dramatic consequences for the world economy.

Similarly spectacular price developments have only occurred four times in the last few decades: in 1973, when the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo for the first time; in 1979, as a consequence of the Iranian revolution; a year later, when Iraq invaded Iran; and in 1990, when Iraq invaded Kuwait.
Which leads to one the most provocative questions being asked about the world economy today: Why are oil prices soaring again? What's Really Driving the Price of Oil? >>> By Beat Balzli and Frank Hornig

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Reactions to the Euro’s Record High
SPIEGELONLINE INTERNATIONAL: The euro has reached a record high of $1.50. How much higher can it go and does the high-flying euro threaten jobs? SPIEGEL ONLINE talks to economists Thomas Straubhaar, Christian Dreger and Peter Bofinger about the enormous risks -- and few benefits -- of the high euro.

SPIEGEL ONLINE: Mr. Bofinger, the euro keeps climbing and climbing. How much higher can it go?

Bofinger: There's no end in sight at the moment. Experience has shown that the dollar is under pressure when euro interest rates are higher than dollar interest rates. That's why I was in fact surprised that it took the euro so long to crack the $1.50 threshold.

SPIEGEL ONLINE: What are the risks for Germany?

Bofinger: German exports have stagnated in real terms since August. The rising euro exchange rate, together with a significantly weaker world economy, carries substantial risks for an export-oriented economy like Germany's.

SPIEGEL ONLINE: When prices rise, returns on exports decline. BMW is currently using this argument to justify laying off 8,100 workers.

Bofinger: That isn't far-fetched at all. When the euro's value increases from $1.30 to $1.50, there isn't much left over in the way of profits. It comes as no surprise that German industry is about to face a new wave of cost cuts.

SPIEGEL ONLINE: Are there also positive effects?

Bofinger: Yes. The appreciation of the euro softens the rise in the price of oil. This also cushions the effect of prices rising too fast in the euro zone. ’There’s No End in Sight’ >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)

An Emerging New Mode of ‘Finanzkapital’
IQTISAD AL ISLAMY (ISLAMIC ECONOMIC) – Abstract: Islamic banking is making a debut in the world of 'Finanzkapital'. Despite being new in the world of finance and still hesitant to make bold claims, it is emerging slowly but steadily. The men who took upon themselves the task of piloting the Islamic mode of 'Finanzkapital' belong to the new generation of Muslims. Not only are they endowed with a strong Islamic faith but are also equipped with the necessary technical wherewithal to rise to this occasion. The one who first started the ball rolling in this direction was Dr. Ahmed El-Naggar, an Egyptian economist. Among others who joined him later, were the late King Faisal and his son Prince Muhammad. Tunku Abdul Rahman too played the pioneering role in the establishment of the Islamic Development Bank in Jeddah.

Although the superstructure of Islamic banking is still in the making and there are quite a large number of fundamental issues waiting to be resolved, the spirit to make this premier pas a success seems undaunted. While some Muslim countries have already set up Islamic banks, there are others where at least a part of the banking business has been Islamized. Pakistan is among those countries which have set up special counters for interest-free banking.

As Islamic economics is not only confined to mere 'finance', quite a large number of steps are also being taken to orientate the economic contours of these countries compatible with the basic tenets of Islam. Zakat and Ushr have already been introduced in Pakistan. In addition, serious efforts are under way to find new ways and means towards raising funds through taxation etc. for purpose of meeting both the budgetary and developmental outlays.

The World of Islam, today, finds itself in an enviable position. Not only is it now largely liberated from the colonial yoke, but is also endowed with the fabulous oil wealth. With a view to enable the Muslim countries to break their centuries-old economic stagnation, the present exercise into Islamic banking is destined to open up a new epoch of resurgent development and distributive justice. If this effort got crowned with success, not only will it benefit the Muslims, but will also usher in a new era of efficient and broad-based growth and development in the whole world. Islamic Bank: An Emerging New Mode of ‘Finanzkapital’ in the World >>> By M. A. Hussein Mullick

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Bernanke Dreams On!
Photo of Ben Bernanke courtesy of The Telegraph
THE TELEGRAPH: Federal Reserve chairman Ben Bernanke hinted at the prospect of further interest rate cuts as he admitted that the US economy is facing attack on a number of flanks.

Mr Bernanke, head of America's central bank, said the Fed would do whatever it needed to do to prevent the American economy from being hurt yet further by the combined effects of the declining housing market and the illiquid credit markets.

In a speech followed by answers to questions from members of the House of Representatives Financial Services Committee, Mr Bernanke said keeping downside risks to growth in check were more important than keeping a lid on inflation.

He said the Fed "will be carefully evaluating incoming information and will act as needed to support growth and to provide adequate insurance against downside risks". US fed chief Bernanke hints at more rate cuts >>> By James Quinn, Wall Street Correspondent

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Australian Dollar Rises to Highest Level Since 1984
Images of Australian dollars courtesy of Google Images
BLOOMBERG: The Australian dollar rose to its highest in almost 24 years on speculation the nation's interest- rate advantage over the U.S. will widen.

The currency, know[n] as the Aussie, extended its six-day gain as Federal Reserve Chairman Ben S. Bernanke signaled the U.S. central bank is prepared to lower its 3 percent interest rate to shore up a faltering economy. Australia's dollar was buoyed as investors bought the nation's higher-yielding assets in anticipation of the central bank raising its 7 percent benchmark rate again next week to slow inflation.

“It's clearly a one-way street higher for the Aussie," said Clifford Bennett, chief economist in Sydney at Sonray Capital Markets Ltd. Bernanke's comments are "the latest catalyst points overlaying what is still a very strong investment argument for the Australian dollar, consisting of high yields likely to go higher."

The Australian dollar touched 94.34 U.S. cents, the most since March 1984, before trading at 94.11 cents at 9:19 a.m. in Sydney, from 93.81 cents in late Asian trading yesterday. The currency also climbed to its highest since August 1997 against the pound, reaching 47.59 pence. Australian Dollar Rises to Highest Since 1984 on Rate Advantage >>> By Chris Young | February 28

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Mark Alexander (Hardback)

Dollar Hits New Low as Fed Signals Rate Cut
THE FINANCIAL TIMES: The Federal Reserve is ready to cut interest rates again next month, Ben Bernanke signalled on Wednesday in comments that sent the dollar to a record low against the euro.

The dollar fell below $1.51 after the Fed chairman told Congress the US central bank remained firmly focused on the risks to growth in spite of a run of bad price data. The Fed “will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,” Mr Bernanke said.

His comments to the House financial services committee suggest the US central bank will cut interest rates again in March. The Fed has cut rates five times since last summer, including two cuts in January, taking rates down from 5.25 per cent at the beginning of August to the current figure of 3 per cent.

Noting that the economic situation is “distinctly less favourable” than when he spoke to the committee last July, Mr Bernanke said the US central bank believed the country was experiencing a broad-based slowdown.

Consumer spending “appears to have slowed significantly” in the face of higher gasoline prices and a weakening labour market, he said, adding: “The business sector has also displayed signs of being affected by the difficulties in the housing and credit markets.”

Moreover, “nonresidential construction is likely to decelerate sharply in coming quarters”. He also said that incoming information since the Fed’s January meeting “continues to suggest sluggish economic activity in the near term”. Dollar hits new low as Fed signals rate cut >>> By Krishna Guha in Washington

THE TELEGRAPH:
Dollar's slump to $1.50 raises European alarm By Richard Blackden

THE TELEGRAPH:
Gordon Brown's long boom ending with recession is a real possibility By Vince Cable

DIE PRESSE:
Der Euro ist nicht zu bremsen

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Millions Forced to Work in Benefits Shake-Up
THE TELEGRAPH: Millions of benefit claimants will be forced back to work in the biggest shake-up of the welfare state for 60 years, ministers will announce.

Large parts of the benefits system are to be privatised, with companies hired to find jobs for the unemployed, The Daily Telegraph can disclose.

Private firms will be given incentives of up to £50,000 each to get people back to work and reduce the country's £12 billion annual incapacity benefit bill.

Only last month, David Freud, the government adviser on whose recommendations the reforms are based, said he believed that up to 1.9 million of those claiming they are too sick to work could be found jobs.

In addition, hundreds of thousands of lone parents will face stiff requirements to find jobs or face losing their benefits, a move certain to infuriate Labour backbenchers.

People who refuse to co-operate and reject work interviews will have their benefits "sliced". Millions forced to work in benefits shake-up >>> By Andrew Porter, Political Editor

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Mark Alexander (Hardback)

Vaduz Called to Account
TIMESONLINE: The day that Toytown went to war, the traffic stopped. For more than a week Liechtenstein (population 35,000) and Germany (population 82 million) have been locked in an extraordinary row involving spies, bankers, a whistle-blower with a shady past, a furious prince – and tens of thousands of well-heeled but anonymous tax evaders. From Britain, from the United States, but, above all, from Germany.

This strange international flare-up is having its effects on the cramped streets of Vaduz, the capital of Liechtenstein. The Mercedes Sclass limos that usually convey wealthy Germans and their earnings to one of the safest tax havens in Europe have disappeared from public view. The German taxpayer is running scared.

“If you listen to people at home, in the office, in the pubs, it is clear that Liechtenstein is bubbling with rage, boiling over,” says Günther Fritz, editor of theLiechtensteiner Vaterland. “We can’t be treated like this.” Spies, whistle-blowers and threats: tax haven is called to account >>> By Roger Boyes in Vaduz

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Islamic Banking and Finance - Riyazi Farook

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Shari’ah Finance: Plenty of Interest in No Interest
THE TELEGRAPH: The Halal banking revolution is taking off, says Kara Gammell

The British Government is believed to be planning to raise funds by issuing Shariah-compliant bonds in the Middle East, which would be the first time a Western country did so, but many British banks already provide financial services in accordance with Islamic law.

Junaid Abbas Bhatti, an expert in Islamic Finance said: "The industry is growing at 15pc a year, so it's no surprise that the Western world's financial markets are starting to sit up and take notice of the Halal banking revolution.

"Islamic banking is far more complex than a simple prohibition on the giving and receiving of interest."

Emile Abu-Shakra of Lloyds TSB said there are now 2m Muslims in the UK. He added: "Our research tells us that three quarters want banking services that are in line with their faith.

''We have developed a range of products - from current accounts to mortgages - designed to meet the needs of needs of Britain's Muslim community.

"Not only has this made its possible for Muslims to bank according to their principles, but it has also helped to make Britain a real centre for Islamic finance."

The main difference between Islamic and conventional banking is that Islamic teaching says that money itself has no intrinsic value, and forbids people from profiting by lending it, without accepting a level of risk.

In other words, interest - known as "Riba" - cannot be charged. Sharia finance: plenty of interest in no interest >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Fears of Stagflation Re-Emerge
REUTERS: NEW YORK (Reuters) - U.S. consumer confidence slumped to its worst in five years this month as a tough job market helped produce the grimmest future outlook in 17 years, while soaring inflation among producers at the year's start stoked fears of stagflation.

Bad news also poured in from the beleaguered housing market, other data showed on Tuesday. The collapse in U.S. home prices accelerated to a record pace in the fourth quarter of 2007, with prices plunging 8.9 percent last year, according to the S&P/Case-Shiller U.S. National Home Price Index.

A government report showed U.S. producer prices jumped 1 percent in January on rising energy costs and posted the biggest 12-month gain in more than 26 years, which was the last time the U.S. was emerging from a stagflationary period of low growth and high inflation. Stagflation Fears >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)

’Non-Doms’ on the Run
THE TELEGRAPH: International lawyers are descending on London to persuade British non-domiciles to re-locate as pressure grows on the Chancellor to delay controversial plans to levy £30,000 a year on foreigners resident in the UK.

Seminars are being organised by foreign lawyers in London to act as shop windows to persuade tax experts to advise their clients to move away from the UK.

One of London's leading tax advisers to the UK's non-dom community said: "The UK Government really has no idea how much of a spectacular own-goal it has scored. It is totally depressing how many Irish, Swiss and Dutch lawyers are swarming all over our clients now in London, and the clients are listening to what was previously dismissed as jealous propaganda."

Dutch firm Loyens & Loeff is typical of international law firms setting up events to explain to advisers how their non-dom clients can benefit by leaving the UK. Foreign lawyers target City non-doms >>> By Sophie Brodie

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Moscow World’s Costliest City
DAILY EXPRESS: WHEN a ride in one of London’s black cabs empties your purse, it isn’t hard to swallow the popular myth that the capital is the most expensive city in the world.

So thank your stars you’re not in Moscow, where the average visitor to the city – now officially the world’s most expensive – forks out nearly £250 a night for a room, compared with £154 in London.



In fact, the latest poll by industry observer Hogg Robinson Group put London in 10th place – down from eighth in 2006.



Second to the Russian capital was New York, where visitors pay £192 per night. In third place was Paris (£171), followed by Dubai (£164), Milan (£164), Stockholm (£160), Mumbai (£160), Bangalore (£159) and Hong Kong (£154).



For Moscow, it was a case of reclaiming the dubious title it also held in 2005 and 2006.



Room prices there have risen 93 per cent since 2004 and Margaret Bowler, global hotel relations director for Hogg Robinson Group, believes this has less to do with the draw of the country and more to do with economic factors.



She said: “The cost and availability of land in central Moscow, restricting the development of new hotels, is set to continue room inflation into 2008.”

It is just the latest confirmation of the city’s sky-high prices. Moscow World’s Cosliest City >>> By Heather Meyer

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Mark Alexander (Hardback)

Liechtensteiners Fury at German Tax Snoop
Photo of Prince Alois of Liechtenstein courtesy of the BBC
BBC: Walking around Liechtenstein for the first time, there are two things that strike me most about this place: manure and money.

The smell of manure - that comes from the farmland that surrounds this rural principality.

The money… well, you can see that from all the shiny banks and investment firms that jostle for space in the capital, Vaduz.

These are the companies that have made Liechtenstein one of the richest states in Europe.

Secretive

Liechtenstein also has the reputation of being one of the most secretive tax havens in the world.

Just ask the Organisation for Economic Co-operation and Development.

This financial watchdog says Liechtenstein is one of only three states left on its blacklist of "uncooperative tax havens" (the others are not a million miles away - Monaco and Andorra).

Liechtenstein this week attacked the authorities in Berlin for buying information on German businessmen clients that have bank accounts in the tiny Alpine principality.

Germany has launched a tax evasion investigation using the data, which was supplied by an anonymous informant who was reportedly paid 5m euros (£3.75m; $7.3m). Liechtenstein fury at German tax snoop >>> By Steven Rosenberg

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Germany: Worst Financial Crisis Since 1931? German State-Owned Banks on Verge of Collapse
SPIEGELONLINE INTERNATIONAL: The German government has had to bail out state-owned banks with taxpayers' money after their managements recklessly gambled away billions on subprime investments. But if a state-owned bank were to go under, the consequences could be disastrous for the whole economy.

Ingrid Matthäus-Maier, a member of the center-left Social Democratic Party (SPD) and the CEO of the state-owned KfW banking group, is undoubtedly in one of Germany's highest earnings brackets. Although her annual salary of €418,000 ($614,000) is substantially lower than that of her counterpart at Deutsche Bank, Josef Ackermann, who earns a tidy €13 million a year, she does earn more than twice the salary of German Chancellor Angela Merkel, who has to make do with a mere €200,000.

That's nice for Matthäus-Maier. A lawyer by profession who was a financial expert for the SPD for many years, she would not have been able to get on the board of a private bank in 1999, the year she joined the board of KfW -- she lacked the banking experience required by law. But KfW is not subject to the same regulations as other banks, which explains why Matthäus-Maier doesn't owe government auditors an explanation -- not even now, in the wake of recent public accusations that she botched the IKB crisis.

As the head of KfW, Matthäus-Maier is a major shareholder in IKB, the Düsseldorf-based bank that is on the brink of bankruptcy and is only being kept afloat by a series of government bailouts running into the billions (more...). Last week was marked by one crisis meeting after the next, but the headstrong government banker had more than the future of IKB on her mind. Indeed, she seemed more concerned about her employment contract and whether it would be extended. Her demands triggered an irritated reaction from the head of the KfW supervisory board, Economics Minister Michael Glos, as well as from others present at the meetings. Two days later, it was announced… >>> By Wolfgang Reuter

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Mark Alexander (Hardback)

Shari’ah Now Official in Britain
ANGLO-AUSTRALIAN NATIONAL COMMUNITY COUNCIL: new sharia law controversy erupted last night over Government plans to issue special "Islamic bonds" to pay for Gordon Brown's public-spending programme by raising money from the Middle East.



Britain is to become the first Western nation to issue bonds approved by Muslim clerics in line with sharia law, which bans conventional loans involving interest payments as "sinful".



The scheme would mark one of the most significant economic advances of sharia law in the non-Muslim world.



It will lead to the ownership of Government buildings and other assets currently belonging to British taxpayers being switched wholesale to wealthy Middle-Eastern businessmen and banks.



The Government sees sharia-compliant bonds as a way of tapping Middle-East money and building bridges with the Muslim community.



But critics say the scheme would waste money and could undermine Britain's financial and legal systems.



Senior Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said: "I am concerned about the signal this would send – it could be the thin end of the wedge.



"British Common Law must be supreme and should apply to everyone."



A spokesman for the National Secular Society said: "There are lots of different ways to arrange financing.



"Constructing financial instruments to be sharia-compliant seems to me to involve a lot of unnecessary complication, which will serve only to make a lot of lawyers very rich."



The attempt to embrace Islamic financing would also appear to be at odds with Mr Brown's promise to promote Britishness and British values and institutions.



The Treasury has already faced heavy criticism for removing Britannia from 50p coins.



Other Western nations have been reluctant to issue Islamic bonds. Shari’a now official in Britain >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)

New Sharia Row Over Chancellor’s Plans for ‘Islamic Bonds’
THE MAIL ON SUNDAY: A new sharia law controversy erupted last night over Government plans to issue special "Islamic bonds" to pay for Gordon Brown's public-spending programme by raising money from the Middle East.

Britain is to become the first Western nation to issue bonds approved by Muslim clerics in line with sharia law, which bans conventional loans involving interest payments as "sinful".

The scheme would mark one of the most significant economic advances of sharia law in the non-Muslim world.

It will lead to the ownership of Government buildings and other assets currently belonging to British taxpayers being switched wholesale to wealthy Middle-Eastern businessmen and banks.

The Government sees sharia-compliant bonds as a way of tapping Middle-East money and building bridges with the Muslim community.

But critics say the scheme would waste money and could undermine Britain's financial and legal systems.

Senior Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said: "I am concerned about the signal this would send – it could be the thin end of the wedge.

"British Common Law must be supreme and should apply to everyone." New sharia row over Chancellor's plans for 'Islamic bonds' >>> By Simon Walters

Mark Alexander (Paperback)
Mark Alexander (Hardback)

An Iranian Viewpoint: The Fall of the Dollar Empire
PRESS TV: The following is an interview with Hamid Varzi an economist and banker based in Tehran about the US economic crisis:

Q. Please tell us more about the 2007 subprime mortgage financial crisis and why, how and when it began?

A. The crisis began in 2000 with Bush Jr.'s election that re-established the irresponsible “Supply Side” and “trickle-down” economic policies of the Reagan years. We are wrong to focus only on the subprime crisis, which has been conveniently blown out of all proportion in order to create the convenient and comforting impression that this is a manageable problem solvable through a simple reduction in interest rates and a 90-day government mandated delay on foreclosures (Hillary's recommendation). The subprime crisis presages far greater problems down the road. It is already spreading to other forms of commercial paper, and even if the damage can be contained the relief will be only temporary because a much larger danger is looming on the horizon: The US economy has grown largely on the back of speculative credit derivatives that have risen exponentially to $ 35 trillion, which is more than double the size of the entire US economy! This is an approaching iceberg, and all you've seen (in the sub-prime scandal) is the tip. To return to your question, the first chart below proves that speculative commercial lending received a major boost with Bush's election, and soared with his re-election. Credit derivative volumes continue to soar >>> An interview with Hamid Varzi by Monavar Khalaj, Press TV, Tehran

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Ahmadinejad: Muslim Thinkers Can Introduce Independent Monetary, Banking System
IRNA: President Mahmoud Ahmadinejad said here Saturday that Muslim world thinkers are capable of introducing a monetary and banking system independent of the current system dominating the world.

President Ahmadinejad told head of the Islamic Development Bank Ahmad Mohammad Ali that any decision and activities for establishment of a banking and monetary system being based on Islamic injunctions would have an impact on colonial approach of some states towards Muslim states.

Stressing that the monetary and banking system regulates relations among countries and is the basis for economic activities, Ahmadinejad said Muslim states have been facing some restrictions in acting on the monetary and banking system governing the world.

He went on to say that the monetary and financial system underway in the world were devised after World War II as a means for domination on other countries.

He said among restrictions which such financial and monetary systems have created for Muslim states are outflow of Muslim nations' wealth and achievements and usage of the financial and monetary mechanisms against Muslim world. President: Muslim thinkers can introduce independent monetary, banking system >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Is This the First Piece of Common Sense Coming from This Government?
Photo of Alistair Darling courtesy of The Telegraph
THE TELEGRAPH: The Chancellor today criticises the culture of rewarding failure in the City by giving bonuses to executives who appear to have done little to deserve them.

In an interview with The Daily Telegraph, Alistair Darling says that as the country heads into an economic downturn, company boards must be able to justify large bonuses. They should apply the "next-door neighbour test" of whether the payouts would be regarded as reasonable and responsible in a climate when millions of households are struggling with rising living costs, he says.

"People get fed up if they see others getting great big bonuses and they can't actually see what they did. It can be extremely frustrating," Mr Darling says.

"Boards need to ask themselves, 'Are we behaving reasonably?'… If you're leaning over the fence talking to your next-door neighbour, can you justify what you've done?"

City bankers made an estimated £7 billion in bonuses last year. The bumper bonus round was one of the largest ever for investment bankers, despite the global economic turmoil and significant falls in the value of shares on stock markets around the world. Alastair Darling Attacks Bonuses for City Failure >>> By Rachel Sylvester

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Secret Papers Reveal Threats from Prince Bandar If British Government Refused to Drop Inquiry into Corruption at BAE
Photo of Prince Bandar, head of Saudi Arabia’s national security, courtesy of The Guardian
THE GUARDIAN: Saudi Arabia's rulers threatened to make it easier for terrorists to attack London unless corruption investigations into their arms deals were halted, according to court documents revealed yesterday.

Previously secret files describe how investigators were told they faced "another 7/7" and the loss of "British lives on British streets" if they pressed on with their inquiries and the Saudis carried out their threat to cut off intelligence.

Prince Bandar, the head of the Saudi national security council, and son of the crown prince, was alleged in court to be the man behind the threats to hold back information about suicide bombers and terrorists. He faces accusations that he himself took more than £1bn in secret payments from the arms company BAE.

He was accused in yesterday's high court hearings of flying to London in December 2006 and uttering threats which made the prime minister, Tony Blair, force an end to the Serious Fraud Office investigation into bribery allegations involving Bandar and his family.

The threats halted the fraud inquiry, but triggered an international outcry, with allegations that Britain had broken international anti-bribery treaties.

Lord Justice Moses, hearing the civil case with Mr Justice Sullivan, said the government appeared to have "rolled over" after the threats. He said one possible view was that it was "just as if a gun had been held to the head" of the government.

The SFO investigation began in 2004, when Robert Wardle, its director, studied evidence unearthed by the Guardian. This revealed that massive secret payments were going from BAE to Saudi Arabian princes, to promote arms deals.

Yesterday, anti-corruption campaigners began a legal action to overturn the decision to halt the case. They want the original investigation restarted, arguing the government had caved into blackmail. BAE: secret papers reveal threats from Saudi prince - Spectre of 'another 7/7' led Tony Blair to block bribes inquiry, high court told >>> By David Leigh and Rob Evans

LISTEN TO GUARDIAN AUDIO:
'It was remarkable the way the government had just rolled over': Two pressure groups are appealing against the decision to drop an investigation into BAE's dealings with Saudi Arabia

THE GUARDIAN:
A cover-up laid bare: court hears how SFO inquiry was halted: Papers show how arms giant tried to avoid revealing secrets; Saudi threats meant 'no other choice' but to stop investigation

THE GUARDIAN:
Full Coverage: The BAE Files

DAILY MAIL:
Blair accused of forcing BAE fraud probe to fold by applying 'irresistible pressure

THE INDEPENDENT:
Blair used 'irresistible pressure' to halt investigation into BAE-Saudi arms deal By Robert Verkaik, Law Editor

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Mark Alexander (Hardback)

Bank Warns of Sharp Slowdown in UK Economy
DAILY EXPRESS: THE Bank of England issued a dire warning about the state of the UK economy today, claiming that interest cuts may need to be cut further as growth slows and inflation soars.

Bank Governor Mervyn King warned that UK growth is expected to be less than two per cent by the end of the year, a sharp fall from the current rate of three per cent.



He also said interest rates may have to be cut further to prevent the economy falling into recession. Bank Warns of Sharp Slowdown in UK Economy >>> By Nicola McCafferty

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Mark Alexander (Hardback)