Friday, 31 October 2008

New Dark Age Alert! Barclays Rejects Government Funding, Secures £5.8bn from Qatar and Abu Dhabi

In choosing to allow Gulf investors buy up our banking assets, we are effectively selling out to the Muslim world. In so doing, we are continuing on the road of selling out to the Arab world. In time, this will lead to the complete loss of control of our own economy. If you think I am being melodramatic, just wait!

Never forget the old adage: He who pays the piper calls the tune!

Bankers, we now know are some of the greediest people on the planet; now, maybe, we may also conclude they are some of the stupidest, least-principled, and most lacking in foresight! Shame on them all!
- ©Mark

TIMESONLINE: Barclays will raise £7.3 billion from investors after securing a £5.8 billion cash injection from investors in Qatar and Abu Dhabi, in exchange for a stake of over 30 per cent in the British lender.

The bank announced this morning that it will raise up to £2 billion pounds from Qatar Qatar [sic] Investment Authority (QIA), an existing shareholder, and its associated holdings, and £300 million from Challenger, an investment vehicle of a member of Qatar’s royal family.

It will also raise £3.5 billion from Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family, which would give him a 16.3 per cent stake in the bank. >>> Grainne Gilmore | October 31, 2008

THE INDEPENDENT: Investors Pump Billions into Barclays

Banking giant Barclays today said Middle Eastern investors were pumping up to £7.3 billion into the business.

The cash injection from Qatari investors and the Abu Dhabi royal family comes as the bank looks to avoid calling on taxpayer funds to strengthen finances weakened by the credit crunch.

The funding move follows an earlier £4.5 billion cash call by the bank in June.

Qatar Holding and Challenger - a wealthy vehicle led by the Qatari royal family - are already investors in the group.

Barclays has also brought on board Sheikh Mansour Bin Zayed Al Nahyan - a member of the Abu Dhabi royal family - as a substantial new investor.

The Middle Eastern trio could end up owning almost a third of the bank when the warrants and notes issued by the bank are converted into ordinary shares. >>> By Russell Lynch, PA | October 31, 2008

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It Defies Belief that Those Who Have Brought Disaster Upon Us Are STILL Given Millions in Bonuses...

MAIL Online: Have you tears to spare? If so, shed them now for the hapless partners in Goldman Sachs, the giant international bank.

This year, its remuneration packages will shrink by a third. The firm's 443 partners will receive a bonus of at least $1million (£650,000) apiece. It is equally tough all over the financial world. Average bonuses are expected to halve.

The nine biggest U.S. investment banks have set aside just $108 billion (£66 billion) for staff compensation in the forthcoming year.

A mean-spirited California Democrat, Henry Waxman, has written them a letter. He wants to know how they can justify this figure when they have just received $125 billion (£77 billion) in aid from the U.S. government.

Waxman says: 'I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses.' And so say all of us.

Sour jokes apart, it defies belief that when the bankers of America and Britain have presided over the greatest disaster in the history of capitalism, they are still awarding themselves telephone number pay deals.

Aggrieved bankers say that they have lifestyles to support. Many are paying mortgage interest on multi-million pound homes in London's Holland Park or New York's Upper East Side. They have school fees to meet, boats whose crews must be paid, homes in the Bahamas to fund.

But to the rest of us, watching our savings and pensions shrink towards invisibility, the latest numbers show that the rulers of the financial system still inhabit a fantasy zone.

They refuse to acknowledge that this is year zero, a new and shockingly different world which they themselves have created.

They proclaimed the law of the jungle, the free market. When this failed, they demanded and received vast sums of our money to save them from its consequences.

Millions of people around the world are going to lose their jobs, many more their homes, still more their savings, as a result of the bankers' arrogance and incompetence. The least we expect is that they should share some part of our pain.

A mere 50 per cent cut in multi-million pound rewards is not enough. As a matter of common decency, a small gesture of contrition, no bonuses whatever should be paid this year. Bonuses for what achievement? For ruining us all?

For years, the financial engineers have perceived themselves as an elite, with a grossly exaggerated sense of entitlement.

Bankers have appropriated to themselves in compensation a higher share of their businesses' revenues than any other industry.

Even now that their ship has foundered in a fashion which makes the loss of the Titanic appear a trifling nautical mishap, they still suppose themselves deserving of places at the top tables, Porsches in driveways and villas in the South of France.

The banks claim that they must pay top dollar for top talent, or risk losing their best people to competitors. This is nonsense. Who is hiring?

What rational financial institution - if such things exist - would distribute more millions of pounds or dollars to the very people who have contrived the present catastrophe? Far from deserving homes in Eaton Square, these men and women belong in rented flats in Belsize Park. >>> Max Hastings | October 31, 2008

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Thursday, 30 October 2008

Investors Sought for $131mn Birth of Islam Movie

ARABIAN BUSINESS: Investors are being sought for a major new $131 million film being produced depicting the birth of Islam.

The producers of The Messenger of Peace have appointed Dubai-based Millennium Finance Corporation to attract a limited number of "high quality co-investors" for the project, it was announced on Thursday. 

Production of the film, which will reach a global audience of both Muslims and non-Muslims, is expected to start in early 2009. The producers will start an investment roadshow throughout the GCC region shortly.

The Messenger of Peace will be only the second movie of its kind on the subject of Islam, whereas more than 30 major films have been made about the early history of Christianity. 

Films based on religious subjects have been largely successful in the history of film. 

The Message is still much in demand today after more than 30 years since its release, while Mel Gibson’s 2004 film Passion of the Christ was a big box office hit. 

In addition to global distribution channels which cover the US, Europe, Asia, Africa and Middle East markets, the producers intend to reach out to people through merchandising channels to help alleviate many misgivings about Islam and to make the venture commercially very successful. 

The film’s investment vehicle will have full control over all revenues. >>> By Andy Sambidge | October 30, 2008

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Wednesday, 29 October 2008

Disgusting! Why Should the Taxpayer Bail These Parasites Out?

MAIL Online: Goldman Sachs is on course to pay its top City bankers multi-million pound bonuses, despite asking the U.S. government for an emergency bail-out.

The struggling Wall Street bank has set aside £7bn for salaries and year-end bonuses this year, it emerged tonight.

The scale of the pay pool means the firm's 443 partners are on course to pocket an average Christmas bonus of over £3m.

The staff bonanza comfortably dwarfs the £6.1bn lifeline the American government is throwing to Goldman as part of its $700bn scheme to resuscitate the US financial industry.

It means that as Washington pours money into the bank, the cash will immediately be channelled into the bank accounts of Goldman's already well-heeled bankers.

News of the firm's largesse will revive the anger over the 'rewards for failure' culture endemic in the world of high finance.

The same bankers who have brought the global economy to its knees seem to pocketing rewards on a par with the boom years. Goldman Sachs Ready to Hand Out £7bn Salary and Bonus Package... After Its £6bn Bail-out >>> By Simon Duke | October 29, 2008

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Tuesday, 28 October 2008

Iceland Raises Interest Rate from 12% to 18%

TIMESONLINE: Iceland’s central bank today raised interest rates by a massive 6 percentage points to 18 per cent and said it had applied to the US Federal Reserve and the European Central Bank for extra funding.

The struggling country has already said it needs another $4 billion in loans on top of the $2 billion it is seeking from the International Monetary Fund (IMF).

The massive rise in interest rates, coming only a fortnight after borrowing costs were cut, is thought to be in response to demands from the IMF to support the country's currency, the krona. Trading in the currency has been suspended after its value fell 70 per cent.

However, Iceland and the IMF are also trying to stem soaring inflation. Official figures released today showed the 12-month rate had reached 15.9 per cent in October from 14 per cent a month earlier. Economists predict it could reach as much as 20 per cent. >>> Robert Lindsay | October 28, 2008

BBC: Analysis: Why Raising Interest Rates Won’t Work

The first industrialised country to request assistance from the International Monetary Fund (IMF) in over 30 years is Iceland.

The reason is that Iceland was hit by the deepest and most rapid financial crisis in peacetime history.

At the moment, the Icelandic economy has come to a standstill, it is almost impossible to transfer foreign currency between Iceland and abroad, which is a calamity for a country that is almost entirely dependent on imports and exports.

Exporters cannot bring export earnings into Iceland, and it is very difficult to obtain foreign currency to purchase necessities.

The key factor in Iceland's failure has been the monetary policy pursued by its Central Bank, in particular inflation targeting, similar to the UK.

This means the Central Bank targets inflation, raises interest rates if inflation is above the target, and lowers them if inflation is below target.

Such a policy has a sound foundation in economic theory and is often appropriate for large countries.

In the case of Iceland, it was disastrous. >>> Jon Danielsson, Economist, Financial Markets Group, London School of Economics | October 28, 2008

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Monday, 27 October 2008

Shares Plunge as Pound Buckles

TIMESONLINE: Sterling plunged again against the dollar this morning, having fallen through $1.60 for the first time in five years on Friday. The pound lost a further 3 cents to $1.542 amid mounting fears of a prolonged UK recession.

The same worries forced down the FTSE 100, which plunged 185 points, or 4.7 per cent, in morning trading with banks and insurance companies leading the way. European stock markets were also down around 5 per cent, following big falls in Asia with Hong Kong's Hang Seng down more than 10 per cent and the Nikkei in Tokyo losing 6 per cent.

The oil price also dipped below $60 a barrel, hitting its lowest level since February 2007. Brent futures fell to a 20-month low of $59.02 before recovering slightly to around $60 a barrel.

Friday's GDP figures showed that the British economy shrank by 0.5 per cent in the three months to the end of September, the first time quarterly GDP has fallen in more than 16 years.

Sterling has fallen 12 per cent from $1.72 in a week and was put under pressure when Mervyn King, Governor of the Bank of England, admitted it was likely that the country was heading for a prolonged and painful recession.

Gordon Brown piled further pressure on sterling by reiterating Mr King's comments. >>> Robert Lindsay | October 27, 2008

LE FIGARO: Nouvelle vague de ventes massives à la bourse de Paris

Les fortes chutes enregistrées à Wall Street vendredi et sur les places asiatiques ce matin affectent la Bourse de Paris.

Vers 12h30, le CAC 40 chute de 5,56% à 3016,11 points. La volatilité des marchés asiatiques et les craintes concernant la publication de nombreux résultats et indicateurs économiques essentiels durant cette semaine pénalisent les échanges. La première estimation du Produit intérieur brut américain au troisième trimestre est attendue jeudi. Elle donnera une bonne vision de l'état de santé de l'économie américaine. Plusieurs autres entreprises doivent publier leurs résultats qui permettront d'évaluer le niveau de détérioration de l'économie réelle. Les analystes se préparent à une baisse des prévisions de résultats de nombreuses sociétés. >>>> Perrine Créquy | 27.10.2008

NZZ Online: Der Crash in Raten geht weiter

Auch in der neuen Woche setzt sich die rasante Talfahrt an den Börsen fort. In Tokio brach der Nikkei-Index um mehr als 6 Prozent auf den niedrigsten Schlusskurs seit über 25 Jahren ein. Die europäischen Börsen konnten sich dem Abwärtstrend nicht entziehen.

Die Finanzkrise und die gebremste Konjunktur drücken weiterhin auf die Stimmung an den Börsen. Trotz weiterer Staatshilfen in Japan und einer markanten Zinssenkung in Südkorea riss die Angst vor einer drohenden Rezession die Kurse an den asiatischen Aktienmärkte weiter in die Tiefe. Der japanische Nikkei-Index brach nach kräftigen Anfangsgewinnen an einem chaotischen Handelstag schliesslich um 6,4% auf 7162 Zähler ein. Er schloss damit nur wenige Zähler über dem Stand von 1982. Auch die Märkte in Schanghai und Hongkong fielen tief in die roten Zahlen. Nur Südkorea konnte sich nach einer Talfahrt bis auf minus 5% in den letzten Handelsminuten mit dem Zinsaufwind für die Banken knapp ins Plus retten. >>> tsf | 27. Oktober 2008

BRISBANE TIMES: Aussie Dollar Slump Worsens

The Australian dollar traded close to record lows against the yen and near 5-year lows on the US dollar as fears of a looming global recession saw investors stay away from higher-yielding currencies.

The yen surged across the board, trading near 13-year highs against the US dollar, as safe-haven inflows gathered momentum. Only fears of forex intervention from the Japanese authorities prevented sharper gains.

Speculation of a co-ordinated intervention by major global central banks to drive down the resurgent yen continued. There is also growing talk that the US Federal Reserve might cut interest rates again to support the flagging economy. >>> | October 27, 2008

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Euro auf Allzeit-Rekordtief zum Franken: Auslöser Rezessionsängste im Euro-Raum und Rolle als sicherer Hafen

NZZ Online: Der Euro hat am Montag erneut deutlich an Wert verloren. Zum Franken notierte er mit 1.4308 Franken so tief wie noch nie. Noch Ende 2007 war der Euro 1,6828 Franken wert gewesen. Der starke Franken ist ein Nachteil für die Schweizer Exportindustrie, während Schweizer Touristen im Euro-Raum davon profitieren können.

Der Euro fällt weiter gegen den Franken. Er tauchte am Montagvormittag vorübergehend auf ein neues Rekordtief von 1.4322 Franken. Etwas später erholte sich der Euro wieder leicht und notierte bei 1,4400 Franken, was aber immer noch deutlich tiefer ist als die 1.4672 Franken des Schlussgeschäfts vom vergangenen Freitag. >>> sda/ap ? 27. Oktober 2008

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Sunday, 26 October 2008

Europe on the Brink of Currency Crisis Meltdown

THE SUNDAY TELEGRAPH: The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.
Europe has already had its first foretaste of what this may mean.

Iceland’s demise has left them nursing likely losses of $74bn (£47bn). The Germans have lost $22bn.

Stephen Jen, currency chief at Morgan Stanley, says the emerging market crash is a vastly underestimated risk. It threatens to become “the second epicentre of the global financial crisis”, this time unfolding in Europe rather than America.

Austria’s bank exposure to emerging markets is equal to 85pc of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the International Monetary Fund.

Exposure is 50pc of GDP for Switzerland, 25pc for Sweden, 24pc for the UK, and 23pc for Spain. The US figure is just 4pc. America is the staid old lady in this drama.

Amazingly, Spanish banks alone have lent $316bn to Latin America, almost twice the lending by all US banks combined ($172bn) to what was once the US backyard. Hence the growing doubts about the health of Spain’s financial system – already under stress from its own property crash – as Argentina spirals towards another default, and Brazil’s currency, bonds and stocks all go into freefall.

Broadly speaking, the US and Japan sat out the emerging market credit boom. The lending spree has been a European play – often using dollar balance sheets, adding another ugly twist as global “deleveraging” causes the dollar to rocket. Nowhere has this been more extreme than in the ex-Soviet bloc. >>> By Ambrose Evans-Pritchard | October 26, 2008

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Immigration Intake 'Good for Business'

This title says it all! As long as business is well-served, the rest of us just have to put up with the dire consequences.

We should be asking ourselves not only whether immigration is good for business, but whether it is good for cohesion in society.
- ©Mark

THE AGE: THE business community has urged the Government not to cut Australia's immigration intake, despite calls from the Opposition for a 25% reduction in the coming year.

Australian Industry Group chief executive Heather Ridout said a steady flow of skilled migrants was needed to maintain economic growth.

"You can't just turn the tap on and off," Ms Ridout said.

There was still a skills shortage, which was one reason employers were reluctant to put off workers even though the economy was slowing, she said.

Opposition immigration spokeswoman Sharman Stone said at the weekend that Australia's immigration intake must be cut by a quarter to help cope with the global financial crisis and relieve pressure on cities and the environment.

Dr Stone said the Government's plan for a record 190,300 migrants in 2008-09 should immediately be scaled back to the 2005-06 level of 142,930.

Immigration Minister Chris Evans said the Government would examine the mid-year economic figures and decide then whether the immigration intake should be changed. >>> Brendan Nicholson | October 27, 2008

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Finanzkrise verleiht Flügel – wenn man Nicolas Sarkozy heisst

NZZ Online: Der französische Staatschef und EU-Rats-Präsident Sarkozy will der Welt aus der Finanzkrise helfen. Er organisiert einen Sondergipfel nach dem anderen.

Viele Dinge auf einmal tun, das kann er, das muss er. Es ist Teil seines Naturells. Und wenn dann noch der Kitzel der Krise dazukommt, dann wächst Nicolas Sarkozy über sich hinaus. Die Krise, sie ist für ihn wie Doping und setzt ungeahnte Kräfte in ihm frei.
Von Krisengipfel zu Krisengipfel eilt der 53-Jährige in diesen Tagen, als französischer Staatschef, als EU-Rats-Vorsitzender, als Weltpolitiker. Am Samstag hat er das Asien-Europa-Treffen in Peking genutzt, um die chinesische Führung von der Notwendigkeit einer neuen Ordnung des internationalen Finanzsystems zu überzeugen. Damit soll sich am 15. November in Washington dann auch die G-20 befassen, die Gruppe der 20 wichtigsten Industrie- und Schwellenländer der Welt.

Zuvor hatte Sarkozy die EU-Kollegen schnell zu einer Vorbereitungskonferenz nach Brüssel eingeladen. Und natürlich war er es gewesen, der den Washingtoner Gipfel von nächstem Monat auf den Weg gebracht und Präsident George W. Bush für die Ausrichtung gewonnen hatte.

Wo Sarkozy früher oft ungläubiges Entsetzen auslöste, überwiegt jetzt anerkennendes Staunen. «Ich denke, dass inzwischen auch diejenigen, die böse Befürchtungen hatten, zugeben müssen, dass er nicht nur grosse politische Energie besitzt, sondern auch aussergewöhnliche Führungsqualitäten», rühmt EU-Kommissions-Präsident José Manuel Barroso den Franzosen. Im eigenen Land bringt es Sarkozy auf 49 Prozent Zustimmung, Tendenz steigend. Anfang des Jahres waren es 32 Prozent. Nur die Börsen sind unbeeindruckt. Die Kurse bröckeln weiter. >>> Axel Veiel, Paris | 26. Oktober 2008

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Spending Stalls and Businesses Slash U.S. Jobs

THE NEW YORK TIMES: As the financial crisis crimps demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands.

Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.

When October’s job losses are announced on Nov. 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 percent is likely to rise, perhaps significantly.

“My view is that it will be near 8 or 8.5 percent by the end of next year,” said Nigel Gault, chief domestic economist at Global Insight, offering a forecast others share. That would be the highest unemployment rate since the deep recession of the early 1980s.

Companies are laying off workers to cut production as consumers, struggling with their own finances, scale back spending. Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has turned out not to be enough, and with earnings down sharply in the third quarter, corporate America has turned to layoffs.

“People have grown very nervous,” said Harry Holzer, a labor economist at Georgetown University and the Urban Institute, tracing cause and effect. “They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with layoffs, which hurts consumption even more.”

The unemployment is widespread, with Rhode Island the hardest hit. >>> By Louis Uchitelle | October 25, 2008

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Jetzt will Island in die EU

TAGES ANZEIGER: Angesichts der schweren Finanzkrise fordern Demonstranten immer lauter den Beitritt. Ministerpräsident Geir Haarde solle zurücktreten.

Gestern zog wieder 2000 Demonstranten in Reykjavik vom Parlament zu einem Regierungsgebäude. Geir Haarde und Zentralbankchef David Oddsson hätten es nicht geschafft, schweren Schaden vom Land abzuwenden und sollen deshalb zurücktreten, hiess es. Seit Wochen finden in der Hauptstadt der Insel Protestmärsche statt.

Die Demonstranten wollen einen zügigen Beitritt des Landes in die Europäische Union. Dazu könnten auch vorgezogene Neuwahlen beitragen. Die bis 2011 gewählte Koalitionsregierung ist in der Frage gespalten: Während Haardes Unabhängigkeitspartei gegen einen Beitritt ist, ist der Juniorpartner, die Sozialdemokratische Allianz, dafür. >>> oku/sda | 26. Oktober 2008

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Saturday, 25 October 2008

Islamic Bankers See Sharia System Strengthening

THE GUARDIAN: JEDDAH, Saudi Arabia - The global financial crisis is an opportunity for Sharia-compliant Islamic banking to further its position internationally, bankers said at a forum in Saudi Arabia on Saturday.

Islamic banks have been barely bruised by the global credit crisis so far, although falling property and commodity prices and slowing economies are starting to affect the sector.

But bankers at the forum, on how the world finance crisis could affect Islamic banking, saw the sector strengthening.

"It is a must for Islamic finance to seize the opportunity that came with this global financial crisis," Ahmad Ali, president of the Jeddah-based Islamic Development Bank (IDB) said at the discussion organised by IDB.

"Global investment banks should be set up that realise the Islamic economy and offer the world a new vision and different way to manage assets, invest wealth and create products." >>> By Asma Alsharif / Reuters | Saturday, October 25 2008

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US-Banken zahlen trotz Krise üppige Gehälter: Durchschnittlicher Anstieg der Kosten von 3 Prozent

NZZ Online: Trotz den Turbulenzen auf den Finanzmärkten wollen die grossen US-Banken in diesem Jahr ihren Angestellten offenbar genauso hohe oder gar bessere Gehälter zahlen als 2007. Wie eine Umfrage der Nachrichtenagentur AP bei neun der grössten Kreditinstitute des Landes ergab, stiegen die Gesamtkosten für Gehälter, Bonuszahlungen und Zuschüsse um durchschnittlich 3 Prozent.

Die Bankhäuser entscheiden in den kommenden Monaten über die Höhe der Zahlungen an ihre Angestellten. Dass sie Geld dafür beiseite legen, heisst zwar nicht automatisch, dass die Angestellten die Summen auch bekommen. Doch bei manchen Instituten sind es riesige Beträge. >>> ap | 25. Oktober 2008

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Friday, 24 October 2008

Wall Street dans le rouge

LE FIGARO: La Bourse de New York chute ce vendredi, emportée par un mouvement de panique dans le sillage des marchés asiatiques et européens. Seul réconfort : des reventes de logements anciens qui ont progressé au cours du mois d'août.

Le Dow Jones perd 4,19% à 8327,26 points et le Nasdaq Composite 2,98% à 1156,12 points. Les marchés sont très volatils depuis début octobre et les opérateurs nerveux, eux qui craignent une récession de l'économie mondiale. Et ce ne sont pas les propos guères rassurants d'Alan Greenspan, qui pourraient redonner confiance aux investisseurs. Selon l'ancien président de la Fed, le marché du crédit est en train de vivre «un tsunami comme on en voit un par siècle». La crise aurait été amplifiée par le marché de la titrisation. Alan Greenspan estime qu'une «stabilisation des prix immobiliers aux Etats-Unis» est nécessaire. Cependant, cela pourrait «au minimum prendre plusieurs mois ». >>> T Dong | 24.10.2008

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Milton Friedman on Greed

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Opinion: Tanya Cariina Hsu* - Death of the American Empire: America Is Self-Destruting & Bringing the Rest of the World Down with It

I believe that banking institutions are more dangerous to our liberties than standing armies. - (Thomas Jefferson, US President; 1743 - 1826)

GLOBAL RESEARCH: America is dying. It is self-destructing and bringing the rest of the world down with it.

Often referred to as a sub-prime mortgage collapse, this obfuscates the real reason. By associating tangible useless failed mortgages, at least something 'real' can be blamed for the carnage. The problem is, this is myth. The magnitude of this fiscal collapse happened because it was all based on hot air.

The banking industry renamed insurance betting guarantees as 'credit default swaps' and risky gambling wagers were called 'derivatives'. Financial managers and banking executives were selling the ultimate con to the entire world, akin to the snake-oil salesmen from the 18th century but this time in suits and ties. And by October 2009 it was a quadrillion-dollar (that's $1,000 trillion) industry that few could understand.

Propped up by false hope, America is now falling like a house of cards.

It all began in the early part of the 20th century. In 1907 J.P. Morgan, a private New York banker, published a rumour that a competing unnamed large bank was about to fail. It was a false charge but customers nonetheless raced to their banks to withdraw their money, in case it was their bank. As they pulled out their funds the banks lost their cash deposits and were forced to call in their loans. People now therefore had to pay back their mortgages to fill the banks with income, going bankrupt in the process. The 1907 panic resulted in a crash that prompted the creation of the Federal Reserve, a private banking cartel with the veneer of an independent government organisation. Effectively, it was a coup by elite bankers in order to control the industry.

When signed into law in 1913, the Federal Reserve would loan and supply the nation's money, but with interest. The more money it was able to print, the more 'income' for itself it generated. By its very nature the Federal Reserve would forever keep producing debt to stay alive. It was able to print America's monetary supply at will, regulating its value. To control valuation however, inflation had to be kept in check.

The Federal Reserve then doubled America's money supply within five years, and in 1920 it called in a mass percentage of loans. Over five thousand banks collapsed overnight. One year later the Federal Reserve again increased the money supply by 62%, but in 1929 it again called the loans back in, en masse. This time, the crash of 1929 caused over sixteen thousand banks to fail and an 89% plunge on the stock market. The private and well-protected banks within the Federal Reserve system were able to snap up the failed banks at pennies on the dollar.

The nation fell into the Great Depression and in April 1933 President Roosevelt issued an executive order that confiscated all gold bullion from the public. Those who refused to turn in their gold would be imprisoned for ten years, and by the end of the year the gold standard was abolished. What had been redeemable for gold became paper 'legal tender', and gold could no longer be exchanged for cash as it had once been.

Later, in 1971, President Nixon removed the dollar from the gold standard altogether, therefore no longer trading at the internationally fixed price of $35. The US dollar was now worth whatever the US decided it was worth because it was 'as good as gold'. It had no standard of measure, and became the universal currency. Treasury bills (short-term notes) and bonds (long-term notes) replaced gold as value, promissory notes of the US government and paid for by the taxpayer. Additionally, because gold was exempt from currency reporting requirements it could not be traced, unlike the fiduciary (i.e. that based upon trust) monetary systems of the West. That was not in America's best interest.

After the Great Depression private banks remained afraid to make home loans, so Roosevelt created Fannie Mae. A state supported mortgage bank, it provided federal funding to finance home mortgages for affordable housing. In 1968 President Johnson privatised Fannie Mae, and in 1970, Freddie Mac was created to compete with Fannie Mae. Both of them bought mortgages from banks and other lenders, and sold them onto new investors.

The post World War II boom had created an America flush with cash and assets. As a military industrial complex, war exponentially profited the US and, unlike any empire in history, it shot to superpower status. But it failed to remember that, historically, whenever empires rose they fell in direct proportion. >>> Tanya Cariina Hsu | October 23, 2008

*Tanya Cariina Hsu is a political researcher and analyst focusing on Saudi Arabian and US relations. One of the contributors to recent written testimony on the Kingdom of Saudi Arabia for the US Congressional Senate Judiciary Committee on behalf of FOCA (Friends of Charities Association) in its Hearing on Capitol Hill in Washington D.C., her analysis has been published and critically acclaimed throughout the US, Europe and the Middle East.

The first to break the barrier against public discussion of the Israeli influence upon US foreign policy decision making, in Capitol Hill's "A Clean Break" Symposium in Washington D.C. in 2004, as the Institute for Research: Middle East Policy (IRmep) Director of Development and Senior Research Analyst, Ms. Hsu remains an International Fellow with the Institute.

Born in London, she re-located to Riyadh, Saudi Arabia in 2005 and is currently completing a book on US policy towards Saudi Arabia.

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Sterling and FTSE 100 Plunge as Official Figures Show UK Recession Is on Its Way

Sterling plunged seven cents against the dollar and the FTSE tumbled more than 7pc after official figures confirmed that Britain is on its way to its first recession since the early 1990s.

THE TELEGRAPH: UK gross domestic product fell by 0.5pc, the first contraction since the second quarter of 1992, and the biggest drop since the fourth quarter of 1990. Economists had expected a drop of 0.2pc.

"Not only do Q3's GDP figures confirm that the UK has entered a recession, but the 0.5pc drop is truly shocking," said Vicky Redwood, UK economist at Capital Economics.

The cocktail of bad news coming from the economy has hammered sterling and the FTSE 100 this week. The pound was down seven cents at $1.55 in mid-morning trading and the FTSE tumbled more than 6pc. London Stock Exchange, HBOS and Barclays lead the fallers after dramatic declines in Asia.

The grim data suggest that the UK will be in technical recession - two consecutive quarters of negative growth - by the end of the year and follows declarations this week from the Prime Minister and the Bank of England's Governor Mervyn King that the country is in recession.

Many of the symptoms of a deep slowdown are already present, including a sharp rise in unemployment, falling house prices, low wage growth and faltering business confidence. >>> By Angela Monaghan | October 24, 2008

THE TELEGRAPH: FTSE 100: Oh Dear, Oh Dear, Oh Dear

Traders looking for some kind of support have seen their hopes wiped away as the pound and euro plummet to depths not seen for many, many years.

The pound has fallen almost 40pc in the last 4 months, and the euro 30 pc. Given that an enormous proportion of our consumer goods come from the Far East, the fear is that margins for commodities, manufacturers and retailers will have to be squeezed and still inflation pressures in the western economies may build.

And then there's the GDP data. The problem is this data is already from a different world. Since the end of September the banks have been emasculated and the pound has gone into hibernation.

The independent Bank of England master economists seem to have clean missed the fact that the UK economy was careering into the buffers and have persisted with the anti-inflation fight well past the point of good sense. >>> By Simon Denham | October 24, 2008

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Thursday, 23 October 2008

BNP Paribas Wins Islamic Finance House of the Year 2008 Award

AL BAWABA: البوابة :BNP Paribas - a European leader in banking and financial services and one of the largest international banking networks - won the 2008 award of the most innovative Islamic Finance House of the Year 2008 at the recently concluded Banker Investment Banking Awards in London.

BNP Paribas’ Islamic Banking Unit, Najmah, since then, was established in Bahrain in 2003, and since then, the team has demonstrated financially innovative ideas and has been first to market with a cross-border equity linked product, an Islamic structured product in South East Asia and a Sharia-compliant exchange traded fund based on global index.

BNP Paribas offers a full complement of Shariah compliant services to corporate and institutional clients covering sukuk, equity derivatives, credit derivatives, interest rate & currency hedging, asset management, asset securitization, real estate, murabaha financing, structured finance, project finance and export credit facilities.

To ensure that BNP Paribas’ products and services comply with Islamic guidelines, the bank works in close consultation with a dedicated Sharia Board comprising eminent highly commended scholars including Sheikh Nizam Yaquby (Bahrain), Dr. Abdul Sattar Abu Ghuddah (Saudi Arabia) and Dr. Mohammed daud Bakar (Malaysia). >>> | October 23, 2008

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Islamic Finance Panacea for Global Crisis: Chapra

ARAB NEWS: JEDDAH: The Islamic finance system, which introduces greater discipline into the economy and links credit expansion to the growth of the real economy, is capable of minimizing the severity and frequency of financial crises, says Umer Chapra, a well-known Saudi economist and winner of the King Faisal International Prize for Islamic Studies.

“Islamic finance can also reduce the problem of subprime borrowers by providing them loans at affordable terms. This will save billions of dollars that are spent to bail out the rich bankers,” said Chapra, who at present works as adviser at the Islamic Research and Training Institute of the Islamic Development Bank.

Chapra estimated the derivatives market at $600 trillion, more than 10 times the size of the world economy.

“No wonder George Soros described derivatives as hydrogen bombs while Warren Buffett called them financial weapons of mass destruction,” he pointed out. The derivatives include credit default swaps (CDS) worth $54.6 trillion.

The Islamic economist described the present global financial crisis as the worst in four decades. “There is a lurking fear that this might be only the tip of the iceberg. A lot more may come if the crisis spreads further and leads to a failure of credit card institutions, corporations, and derivatives dealers,” he warned.

Chapra urged Muslims to establish a genuine Islamic finance system with proper checks and controls, adding that such a move would encourage others to embrace it.

The Islamic system does not allow the creation of debt through direct lending and borrowing. It rather requires the creation of debt through the sale or lease of real assets by means of its sales- and lease-based modes of financing such as murabaha, ijara, salam, istisna and sukuk.

Spelling out the regulatory regimes in the Islamic system, Chapra said: “The asset which is being sold or leased must be real, and not imaginary or notional; the seller must own and possess the goods being sold or leased; the transaction must be genuine with the full intention of giving and taking delivery; and the debt cannot be sold and thus the risk associated with it cannot be transferred to someone else.” >>> P.K. Abdul Ghafour | October 23, 2008

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World Markets on Edge as Recession Fears Grow

THE GUARDIAN: In Japan, the Nikkei was driven down by 7% to its lowest level for 5 years / Gloomy US company news add to London nerves

Stockmarkets across Asia have suffered fresh falls following yesterday's steep losses in the US and Europe, as the FTSE 100 fell through the 4000-point mark again and Sony issued a shock profit warning.

Investors have been spooked by the prospect of a deep, prolonged global recession, with a string of large companies warning that their sales and profits will suffer as the downturn bites.

In Japan, the Nikkei was driven down by 7% at one stage in a burst of selling, hitting its lowest point since May 2003. It struggled back in late trading, closing 213 points or 2.5% lower at 8460.98.

After the Japanese market closed, Sony admitted that annual profits will be less than half its previous forecast, at ¥210bn (£1.3bn) down from ¥460bn. It said the strengthening yen has damaged exports, particularly of electronic devices and its PlayStation3 console and games, and also predicted lower sales of televisions, digital cameras and video cameras as the world economy slows.

The picture was also gloomy in South Korea, where the $130bn (£79.8bn) banking bail-out announced last week does not appear to have restored confidence. The composite index of South Korea's biggest companies plunged by 7.5%, with electronic trading having to be halted at one stage.

In London, trading was nervous and volatile following FTSE 100's 188-point drop yesterday. After climbing 37 points at one stage, the index lurched down by over 1% to 3991.29, down almost 50 points.

City confidence had also been undermined by a glut of negative news from America yesterday, which sent the Dow Jones index tumbling by 514.45 points to 8519.21, having been down nearly 700 points at one point in the trading session. >>> Graeme Wearden | October 23, 2008

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Wednesday, 22 October 2008

Islamic Finance Down, Far from Out

THE AGE: IN THE aftermath of the US financial crisis, the future is uncertain for Islamic investment in Australia.

While the impact of the global credit crisis has had a minor effect on sharia-compliant investments compared with debt-laden conventional bourses, some stocks that dominate Islamic indices have fallen.

And the lack of confidence in the banking and finance sector has made Islamic finance providers from the Middle East and South-East Asia hesitant to set up shop Down Under.

The Dow Jones Islamic Market Financials Index measures the performance of about 70 sharemarkets around the world that are sharia-compliant, or in line with Islamic ethics. "Conventional banks and insurance companies are banned from the DJIM universe," says Gerard al-Fil, a Dubai-based financial journalist and portfolio manager.

"Non-Islamic or haram sectors, such as alcohol, tobacco, weapons, pornography and gambling companies are likewise excluded."

The index lost 2.74% in September — a month in which conventional sharemarkets lost a fifth of their value. In that month, AIG, Fannie Mae and Freddie Mac all became de facto state-owned enterprises, while the Lehman Brothers declared bankruptcy and the Bank of America took over Merrill Lynch.

As sharemarkets around the world were rattled by the rapid changes on Wall Street, Islamic stocks also felt the impact.

Mr Fil says other asset-based investments might still drag down the Islamic indices. "The Islamic markets are very heavy on basic materials and raw materials and these prices dropped as well."

But Islamic stocks were sheltered from the most extreme jolts to the global financial market, by a historical and theological tendency to avoid credit.

"Islamic stocks operated in the wider global stockmarkets, so the effects of the crisis will be felt," says Hussain Rammal, a lecturer in international business at University of Adelaide. >>> Nasya Bahfen | October 23, 2008

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Dimmi Alert! Could Sharia Car Insurance Save You a Fortune?

There is no doubt in my mind that Westerners, if they see a chance to save some money on financial products such as car insurance, will desert the usual and go for the halal option. Principle will matter to them not a jot, nor will the Jihad being waged against the West.

Has anybody else noticed that the Muslims are winning this war against the West, against democracy, and against capitalism precisely because they put principle before profit. There’s a lesson to be learnt in that, don’t you think?
- ©Mark

THE GUARDIAN: This week the snappily named Salaam Insurance announced it was taking its "halal car insurance" to a wider audience than Britain's 2 million Muslims. And with good reason - this sharia-compliant product is attractive enough to give many established insurers a run for their money.

For years the UK has had sharia-compliant mortgages engineered so that borrowers pay for their loan without incurring interest charges - something outlawed by sharia rules. But until now, according to Farrukh Raza of Islamic Finance Advisory & Assurance Services, Muslim car owners have had to put their beliefs to one side when buying a policy. "These new products are sharia-compliant but the insurance works in exactly the same way as conventional policies."

Salaam says its car policies conform to the principle of takaful - a form of sharing risk. Any surplus is returned to customers as discounts on their next renewal.

You'll know the money was invested ethically, too. It cannot, for example, be sunk into businesses that are prohibited to Muslims - such as casinos or pornography.

The big question is, will it undercut your current premium? Yesterday I got a quote from Salaam to insure my 10-year-old Toyota estate. It came it [sic] at £233 - almost exactly the same as we pay our current insurer, the Co-op. So it certainly looks competitive. Next time your car insurance renewal comes through, it could be worth going halal. [Source: The Guardian] Miles Brignall | October 21, 2008

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London Summit to Focus on Islamic Finance

GULF DAILY NEWS: MANAMA: Islamic finance issues will be discussed at a major summit to be held in London next month.

The second annual Islamic Financial Intelligence Summit will be held on November 6 at London's Victoria Park Plaza.

It has been organised by Financial Times Global Events, the Banker magazine and HSBC Amanah.

The event brings together key economic players and high-profile Islamic finance specialists to lead discussion and debate on the core issues and latest research in the world of Islamic finance. >>> | October 22, 2008

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Market Meltdown Teaches Europe that Size Matters

GLOBE AND MAIL: Small countries are the biggest victims of the financial crisis, leaving many people looking to bigger nations for economic security

LONDON -- In the centre of Scotland this week, separatist leader Alex Salmond discovered that size has become a problem. He has pegged his political future to the idea of an "arc of prosperity" uniting small countries from Iceland to Ireland through Scotland to Scandinavia.

That sounded good two months ago, when those Celtic tigers and Icelandic miracles were the talk of the economic world and small countries were boasting about their big banks and independent currencies.

Suddenly, the "arc of prosperity" is being called an "arc of insolvency" as small countries have become the biggest victims of the financial crisis.

In the past few weeks, Iceland has gone bankrupt and is now being bailed out by the International Monetary Fund. Ireland is suffering Europe's first real recession and has slashed its government and raised taxes to keep its beleaguered banks afloat. Scandinavian countries are talking seriously for the first time of ditching their currencies, which have plummeted, in favour of joining the big, stable euro.

Across Europe, people are moving their savings and possibly their political support to the security of big countries, big governments, big political parties and big currencies.

Small countries from Lichtenstein to the Canary Islands are learning that being a tax-sheltered banking haven is a fleeting pleasure: When the going gets tough, as it is now, the bank accounts retreat to big, well-known countries. Fear of regulators shutting down the tax shelters - as French President Nicolas Sarkozy suggested to U.S. President George W. Bush last weekend - is pulling them away, but so is the fear of having money tied up in a country too small to save its own banks.

That, analysts say, is the problem: In a new era when government has become the guarantor of financial stability and the lender of first resort, nobody wants to touch those countries whose banks are bigger than their economies. >>> Doug Saunders | October 22, 2008

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UK Looks to Become a Global Provider of Islamic Finance

MORTGAGE STRATEGY: A government organisation is looking to educate financial institutions in a bid to help the UK become a global provider of Islamic finance.

UK Trade & Investment, which incorporates the work of the Foreign & Commonwealth Office, has leant its support to a breakfast briefing hosted by the Association of Corporate Treasurers.

The aim of the briefing is to give financial companies more understanding of Islamic finance by explaining whom it applies to, how it can complement existing financial services strategy, and what the benefits are.

Sharia Islamic law forbids the practice of making money from money, such as charging or paying interest.

Sharia-compliant mortgages involve the bank buying the property with the buyer then buying it back and renting it at a slightly inflated price. Buyers also have to be sure that the money the bank is using to buy the property has come from permissible sources.

The sector is currently thought to be worth $500bn (£294bn) and it is predicted the sector will grow by a further 15% per annum over the next few years.

Andrew Cahn, chief executive of UK Trade & Investment, says: “In these tough times it's more important than ever that we make the most of growing sectors like Islamic finance. >>> Natalie Holt | October 21, 2008

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Tuesday, 21 October 2008

Eric Hobsbawm: On Capitalism

Listen to BBC audio: Historian Eric Hobsbawm says a free market has created conditions of enormous instability >>> | October 18, 2008

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Sarkozy will Schlüsselindustrien teilverstaatlichen: Schutz der europäischen Wirtschaft vor asiatischen Investoren

NZZ Online: Als Antwort auf die drohende Wirtschaftskrise hat der französische Staatspräsident Nicolas Sarkozy eine Teilverstaatlichung von Schlüsselindustrien vorgeschlagen. «Wir sollten über eigene Staatsfonds nachdenken, um strategisch wichtige Unternehmensanteile, die abgewertet sind, aufzukaufen», sagte der amtierende EU-Ratspräsident am Dienstag auf einer Pressekonferenz im Europaparlament.

«Wenn die Krise dann vorbei ist, können wir die Aktien wieder auf den Markt bringen.»

Auf diese Weise könnten die EU-Staaten einen Ausverkauf wichtiger Unternehmen an nichteuropäische Investoren verhindern, erklärte Sarkozy. «Ich möchte nicht, dass die Bürger eines Tages aufwachen und feststellen, dass sich die grossen europäischen Unternehmen in den Händen nichteuropäischer Kapitaleigner befinden.» >>> | 21. Oktober 2008

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Saturday, 18 October 2008

OECD Report Attacks British Failure to Tackle Corporate Bribery and Corruption

THE TELEGRAPH: Britain's failure to tackle corporate bribery and corruption allegations was severely criticised in a report started after the Government blocked an investigation into a huge arms deal between BAE Systems and Saudi Arabia.

The Organisation for Economic Cooperation and Development said it was "disappointed and seriously concerned about the UK's continued failure to address deficiencies in its laws on bribery of foreign public officials and on corporate liability for foreign bribery".

Compiled by the OECD's anti-corruption working group, the report said that British law makes it "very difficult for prosecutors to bring an effective case against a company for alleged bribery offences".

And the Government was slated for its failure to successfully prosecute a single firm for bribery, despite ratifying the body's anti-bribery convention 10 years ago.

The strength of criticism and lack of diplomatic language used in the report will be embarrassing for the Government, which in 2006 urged the Serious Fraud Office to drop an investigation into BAE's Al Yamamah contract with Saudi.

Earlier this year the Law Lords said the SFO was right to drop the investigation on national security grounds. BAE Systems has always denied any wrongdoing.

The OECD usually carries out reviews on members every two years, but decided to undertake an extra investigation of the UK's enforcement of the anti-bribery convention following the controversial BAE decision.

The body urged Britain to rapidly bring its legislation into line with its international obligations under the convention. >>> By Russell Hotten | October 17, 2008

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Friday, 17 October 2008

Bush Urges Patience over Economy

BBC: US President George W Bush has called on worried Americans to trust in the government's series of interventions to fight the crisis in the banking system.

Global stock markets have behaved erratically despite a multi-billion dollar rescue deal to restore calm.

Mr Bush defended his decisions saying credit markets took "a while to freeze up" and would take a while to "thaw".

He spoke as figures released in the US suggested that the construction of new homes was at its lowest in 17 years.

According to the US commerce department, the building of new homes fell by more than 6% last month and was at its lowest level since the recession of 1991. >>> | October 17, 2008

Watch BBC video: President George Bush says the US rescue plan needs time to work >>>

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Jetzt drehen uns die Scheichs eine lange Nase

BLICK ONLINE: DOHA – Unsere Banken wanken, müssen sich in die starken Arme des Staats retten. Ist das islamische Banken-System das Modell der Zukunft?

Wer den Schaden hat, braucht für den Spott nicht zu sorgen: Über den Westen fegt die Finanz-Krise hinweg, in muslimischen Ländern hingegen läuft das Geschäft prächtig: «Die islamischen Banken handeln nicht auf Pump, sondern mit tatsächlichen Guthaben», sagte der Chef der Qatar International Islamic Bank, Abdel Bassat El Schibi.

«Das bewahrt sie vor den Problemen, mit denen die Banken in Amerika und Europa gerade Bekanntschaft machen». Zum Glück für die Credit Suisse: Für sie nahte Hilfe in Form eines Staatsfonds aus Qatar in Höhe von 10 Mrd. Franken.

Bei einer «radikalen Umgestaltung» des weltweiten Finanzwesens biete der Islam deshalb zum Kapitalismus eine Alternative zur Verringerung der Risiken, sagte der Theologie-Dekan in Doha, Hatem El Nakraschaui. >>> SDA/zeb | 16. Oktober 2008

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Thursday, 16 October 2008

UE : Sarkozy plaide pour
une gouvernance économique

LE FIGARO: Le président français juge nécessaire de poursuivre «le cercle vertueux» de la coordination économique engagé à la faveur de la crise financière par les partenaires européens, qui ont répondu plutôt positivement à son appel.

Après que l'Eurogroupe a adopté le plan de sauvetage des banques, Nicolas Sarkozy tient à rester au cœur de l'action européenne. Le chef de l'Etat a annoncé jeudi qu'il prendrait avant la fin de l'année des «initiatives» pour la coordination de la politique économique des 27 pays de l'UE. Le président en exercice de l'Union européenne juge en effet nécessaire de poursuivre «le cercle vertueux» engagé à la faveur de la crise financière.

«J'ai plusieurs idées en la matière (mais) ce n'est pas le moment, ce n'est pas le lieu de les mettre sur la table», a-t-il indiqué lors de la conférence de presse clôturant le sommet européen de Bruxelles. «L'émergence du gouvernement économique de l'Europe, qu'on attend depuis si longtemps, qui a commencé dimanche dernier (lors du sommet de l'Eurogroupe à Paris, Ndlr), il ne faut pas l'arrêter. La question, en tant que président du Conseil, que j'ai posée aux chefs d'Etat et de gouvernement, c'est : si on a pu apporter une réponse coordonnée à la crise financière en Europe, ne faudrait-il pas apporter une réponse coordonnée à la crise économique en Europe ? Du point de vue de la présidence française, la réponse est oui, oui, oui. Est-ce que c'est pour l'instant l'unanimité : non, non, non». >>> S.P. (, avec AFP | 16.10.2008

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ECB Goes Nuclear as EU Leaders Plan to ‘Civilise’ Capitalism

THE TELEGRAPH: The European Central Bank has taken dramatic action to unblock the credit markets, flooding the system with $170bn of dollar liquidity and accepting junk bonds as collateral at its lending window.

"The ECB is doing whatever it takes to unclog the interbank market," said Gilles Moec, from Bank of America, who described the move as "spectacular" volte-face and a belated recognition that the credit crisis is deadly serious.

The monetary blitz was welcomed in Brussels, where EU leaders were meeting yet again, just days after agreeing to the most comprehensive bank bail-out in history. "We are not at the end of the crisis, we are still living in dangerous times," said Jean-Claude Juncker, Luxembourg premier and Eurogroup chair.

He issued a stark reminder that life is going be very different for the banking elite as governments move to restore the lost discipline of the Bretton Woods financial order and attempt to "civilise" capitalism, the code word for clamping down on the City – dubbed "the Casino" in Europe.

"Let everyone remember after this crisis, who solved it. Politicians did, not bankers," he said. Mr Juncker added that this episode would have a profound effect on the euro debate in Britain.

"The British prime minister had to beg to be let into the room. I'm sure that when the storm is over, the British will think about whether they shouldn't become an equal in all decision-making bodies." ECB Goes Nuclear as EU Leaders Plan to ‘Civilise’ Capitalism >>> By Ambrose Evans-Pritchard | October 16, 2008

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Financial Crisis: FTSE 100 Falls Sharply on Recession Fears

THE TELEGRAPH: Shares prices in FTSE 100 in London opened down sharply as fears of recession gripped markets worldwide.

With Japanese shares suffering their biggest loss in two decades, investors were in no mood to hold stocks and within minutes of the start the FTSE 100 index of leading shares fell 236 points - or 5.8pc - to 3840.

Miners, travel companies and retailers were among the biggest fallers as markets focussed on an economic slowdown. TUI Travel slid 18.8pc, platinum miner Lonmin 17pc and plumbing group Wolseley 13pc.

Markets have been spooked the effect of a slowdown on trade as America reported worse-than-expected US retail sales, unemployment rocketed in Britain and increasing evidence of falling demand from China's once booming economy.

Tokyo's Nikkei 225 index plunged 11.41pc to close at 8458, as growing fears of a global recession hammered world markets.

South Korea, whose export-driven economy is in crisis, with the won in freefall and Standard & Poor's saying it might cut credit ratings for the country's leading banks, saw the Kospi index fall 9.4pc in the afternoon, heading for its worst day ever.

Hong Kong's Hang Seng index was down 7.6pc, with mainland Chinese firms exposed to falling commodity prices worst hit. Australia's benchmark S&P/ASX 200 fell 6.7pc and New Zealand's NZX-50 4.8pc to 2,765, its lowest level since September 2004.

Sentiment is grim. "Don't stand in front of the freight train," said Sonray Capital Markets chief economist Clifford Bennett in Tokyo. "This is clearly a panic with further to go. The equity market game has fundamentally changed."

The market has "picked up on the fear factor", said ABN Amro Morgans private client adviser Bill Bishop. "There is nowhere to hide."

The Dow Jones Industrial Average tumbled almost 8pc to close at 8,577.91 - its second steepest points fall in history. The broader Standard & Poor 500 Index plunged 9pc to 907.84.

In the UK, just two days after Gordon Brown's £500bn bail-out of the UK banking system, the FTSE-100 dived 7.16pc, closing down 314.62 at 4079.59 – a trend mirrored across European bourses. Financial Crisis: FTSE 100 Falls Sharply on Recession Fears >>> By Alistair Osborne and Edmund Conway | October 16, 2008

Markets Slump as World Prepares for Long Recession: Bailout bounce erased by global market plunge >>> Suzy Jagger in New York, Carl Mortished and Gráinne Gilmore | October 16, 2008

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Bahraini Shares Down 1% as Banks Post Profits

GULF NEWS: Manama: The Bahrain All Share Index on Wednesday closed down 1.05 per cent as more financial institutions posted third-quarter profits and the prime minister highlighted the need to ensure the robustness of the financial system.

Bahrain Islamic Bank (BIsB) reported $85 million net profit at the end of the third quarter, an increase of 84 per cent over the $46 million during the same period of last year.

"Despite the prevailing global financial crisis due to the mortgage credit crisis in the US, the bank was able, through the application of the Sharia-compliance standards laid down by the Sharia Supervisory Board, to properly select its banking transactions to achieve positive results. In addition, the bank enjoys a high level of liquidity that would enable it to go forward with confident steps," chairman Khalid Abdullah Al Bassam said. Bahraini Shares Down 1% as Banks Post Profits >>> By Habib Toumi, Bahrain Bureau Chief | October 15, 2008

’All Riches Are Ours’ >>> | October 15, 2008

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Alan Greenspan: Capitalism & the Economic Crisis

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Wednesday, 15 October 2008

Bahrain Islamic Bank Profit Up 84%

GULF DAILY NEWS: MANAMA: Bahrain Islamic Bank (BIsB) saw net profit rise 84 per cent in the third quarter of the year up from $46 million for the third quarter of last year to $85m.

"This excellent performance is attributed to the balance in diversifying investment risk, proper application of the bank's financial policies and extreme care in not involving the bank's financial resources and investments in high risk transactions that could undermine the bank's financial position," said BIsB chairman Khalid Abdulla Al Bassam.

In spite of the prevailing global financial crisis due to the US mortgage credit crisis, the bank was able, through the application of the Sharia compliance standards laid down by its Sharia Supervisory Board, to properly select its banking transactions to achieve positive results, he said.

In addition, the bank enjoys a high level of liquidity that would enable it to go forward with confident steps. Bahrain Islamic Bank Profit Up 84% >>> | October 15, 2008

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London Shares Fall as Bail-out Euphoria Gives Way to Slowdown Fears

THE TELEGRAPH: Shares in London fell as a two-day global rally faltered as the euphoria surrounding a £2 trillion worldwide effort to bail out banks and reinvigorate lending was replaced by growing fears over corporate profits and the possibility of a recession.

The FTSE 100 index of leading shares opened down 35 points - or around 1 per cent - at 4352 as grim reality hit stock markets following a week of rollercoaster boom and bust culminating in huge rises on Monday and Tuesday.

"After a bumper start to the week, the inevitable reversal for equity markets does seem to be underway but there's certainly no real belief so far that this will mark the end of the rally at least in the short term," said Matt Buckland, trader at CMC Markets.

Financial stock were the main risers with Lloyds TSB up 7.5pc, HBOS 3.9pc and Royal Bank of Scotland 1.1pc. Concerns of a global slowdown saw miners fall further.

Asia followed Wall Street down. Tokyo's Nikkei index, which was down 1.4 per cent before lunch follwing its record 14 per cent rise on Tuesday, perked up in the afternoon to trade up 1pc.

But Hong Kong's Hang Seng Index was down 2 per cent, while Australia's S&P/ASX 200 index was down 0.8 per cent, New Zealand's benchmark NZX-50 index 3.9pc, and South Korea's Kospi index 2 percent.

Overnight, the Dow Jones index in New York had fallen 76.6, or 0.8 percent, to 9,311, after a record gain on Monday in advance of President George W. Bush's announcement of a $250 billion bank bail-out package. London Shares Fall as Bail-out Euphoria Gives Way to Slowdown Fears >>> By Richard Spencer in Beijing and Danielle Demetriou in Tokyo | October 15, 2008

Era of Self-regulation Is Over, European Commission Warns: The European Commission has warned the business community that the "ideology" of self-regulation is dead and that more rules are required at both the European and global level. >>> By Richard Tyler in Brussels | October 14, 2008

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Tuesday, 14 October 2008

Shares Rise as confidence returns

BBC: Stock markets worldwide have forged higher, as investors bet that state action to strengthen the banking system will ease the credit crisis.

In New York, the Dow Jones was up 1% in morning trading, while in Europe, Germany's Dax ended up 2.7%, while the UK's FTSE added 3.2%.

The US has unveiled details of a plan to take stakes in banks, following steps by the UK and European leaders.

Investors are more confident that a financial meltdown has been averted. Shares Rise as Confidence Returns >>> | October 14, 2008

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Folgen der Finanzkrise: Isländer horten Nahrung

SUEDDEUTSCHE: Angst vor dem Staatsbankrott: Die Isländer fürchten die Zahlungsunfähigkeit ihres Staates und decken sich mit dem Nötigsten ein. Die Lebensmittelpreise steigen bereits - bald könnte Nahrung knapp werden.

Islands Kaufrausch der vergangenen Jahre hat längst ein Ende gefunden. Nun setzt in diesen Tagen ein letzter Spurt auf die Geschäfte ein - einige Ladenbetreiber melden doppelt so hohe Umsätze. Der Ursprung ihres Handelns bereitet allerdings Grund zur Sorge: Die Isländer decken sich mit Lebensmitteln ein - bevor das Land möglicherweise Bankrott anmelden muss. Folgen der Finanzkrise: Isländer horten Nahrung >>> | 14. Oktober 2008

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Un ancien de la City de Londres témoigne: «J'ai vendu mon âme au diable»

TRIBUNE DE GENÈVE: CRISE FINANCIÈRE | «J'ai vendu mon âme au diable et j'en ai tiré un bon prix»: Geraint Anderson travaillait comme analyste dans la City, le ventre financier de Londres. Comme ses confrères, il a touché de juteux bonus, mais il a démissionné car il ne voulait plus être «obsédé par l'argent».

Geraint Anderson, 36 ans, a rejoint la City en 1996 en tant qu'analyste junior pour la banque néerlandaise ABN Amro. Un an plus tard, il passe à la française Société Générale, puis en 1999 à l'allemande Commerzbank avant de se retrouver un an plus tard chez sa compatriote Dresdner Kleinwort.

Nommé deux années de suite meilleur analyste de la banque d'investissement, il grimpe vite les échelons et est nommé coresponsable de son équipe. Il commence à se tailler une solide réputation dans la capitale financière et est élu quatrième meilleur analyste de la City, sur un classement qui en compte une centaine. En 2007, il empoche un bonus de 500 000 livres (975 000 francs).

Mais il y a quelques mois, il décide de tout quitter, préférant se consacrer à écrire sur sa vie passée de financier, dans des livres et dans une chronique régulière dans la presse.

Pouvoir se regarder dans le miroir

C'est que Geraint Anderson commençait à ne plus pouvoir se regarder dans le miroir: «je devenais de plus en plus avide, de plus en plus obsédé par l'argent», explique-t-il.

Le financier pointe du doigt le système des bonus. «Je me suis laissé entraîner par la culture des bonus. J'ai vendu mon âme au diable et j'en ai tiré un bon prix», dit-il.

Le Premier ministre britannique Gordon Brown a d'ailleurs sonné la charge contre les bonus astronomiques récompensant des comportements «irresponsables». Londres a conditionné son vaste plan de sauvetage des banques à l'établissement de nouvelles règles de rémunération. Un ancien de la City de Londres témoigne: «J'ai vendu mon âme au diable» >>> ATS/AFP | 14.10.2008

Le rebond des Bourses européennes se poursuit : REDRESSEMENT | Après une journée de redressement historique lundi, les principales places financières d'Europe ont continué sur leur lancée à l'ouverture mardi. >>> ATS | 14.10.2008

Après la dépression, l'euphorie: les Bourses du monde entier en hausse : JAPON | Dans le sillage de Wall street et des places financières asiatiques, les Bourses européennes, rassurées par l'intervention des gouvernements, ont ouvert en hausse mardi. >>> AFP | 14.10.2008

Le salaire des patrons va changer : CRISE | Alors que s’allonge la liste des mesures prises pour calmer la tempête, certains fonctionnements, certaines réglementations devront déjà être modifiées. Six exemples. >>> ANNE GAUDARD | 14.10.2008

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US Stocks Soar after Crisis Talks

BBC: Wall Street shares rocketed 11% on Monday as investors welcomed fresh moves to deal with the worldwide financial crisis.

The Dow share index surged 936 points, ending at 9,387 points, after falling dramatically in the previous week.

Investors were helped by news the US government wanted to put in place its $700bn bank bail-out quickly.

This followed fresh moves by European governments to inject extra cash into their own banks.

Investors have generally welcomed the moves by governments. US Stocks Soar after Crisis Talks >>> | October 13, 2008

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