Wednesday, 27 May 2009

Britain's Millionaire List Shrinks in Face of Recession

THE GUARDIAN: UK has 242,000 millionaires, down from a peak of 489,000

Britain's millionaires' row has nearly halved in size due to the slump in property and share prices.

The number of millionaires in the UK has fallen from 489,000 at the peak of the economic boom in 2007 to 242,000, reducing the elite club to 2003 levels. Soaring property prices stoked a boom in the British rich list but the collapse in the housing market has suddenly reduced the net worth of thousands of former property millionaires.

The Centre for Economics and Business Research (CEBR) said a very large number of people had entered the lower echelons of the rich list due to the runaway property market and had dropped straight out again once prices faltered, falling 17.7% in the last year.

"Having just crept over the threshold, most of these people have crept back under it again - many, perhaps, without ever knowing that they had become millionaires for a temporary period," said Douglas McWilliams, the chief executive of CEBR.

Owners of buoyant share portfolios have also seen their asset base deteriorate, with a 70% drop in City bonuses also playing a part in the decline. >>> Dan Milmo | Wednesday, May 27, 2009

Tuesday, 26 May 2009

China’s Yuan: The Next Reserve Currency?

SPIEGELONLINE INTERNATIONAL: Skeptics have dismissed Beijing's talk of de-emphasizing the US dollar, but China is making moves that could soon lead to a convertible yuan.

Are the Chinese finally getting serious about loosening their ties to the dollar -- and even replacing the greenback with the yuan as the global economy's reserve currency? The evidence is mounting that they are.

For the last two months, China's leadership has been complaining about the country's dangerous dependence on the dollar.. Beijing holds $2 trillion (€1.43 trillion) in dollar assets, accumulated through years of exports to America and massive purchases of Treasuries by the Chinese government. If Washington can't rein in its mounting budget deficit, both Treasuries and the greenback could weaken considerably -- and the Chinese could be big losers as a result.

The Chinese began generating attention on the issue in March, when Chinese Premier Wen Jiabao said he was worried that the country's dollar assets could slide. Ten days later Chinese central bank chief Zhou Xiaochuan suggested replacing the dollar as the international reserve currency. One idea, Zhou said, was to replace the dollar with a basket of currencies supervised by the International Monetary Fund. >>> © SPIEGEL ONLINE 2009 | Tuesday, May 26, 2009

LeVine is a correspondent in BusinessWeek's Washington bureau.

Saturday, 23 May 2009

Britons Face Losing Savings as Dubai Property Market Collapses

THE TELEGRAPH: Britons who invested hundreds of thousands of pounds in unbuilt property during Dubai's boom years face losing the money after a collapse in the market.

Falling property prices and the credit crunch have hit Dubai's financial model hard, with work stopped on hundreds of building sites. Photo credit: The Telegraph

An 800-strong group of investors, from individuals who put deposits on holiday flats to property brokers, says hundreds of millions of pounds is at risk.

Work has slowed or stopped on swathes of building sites, including on a second "Palm Island". The city was planning a series of artificial peninsulas in the shape of palm trees packed with seafront holiday villas, but only one is finished.

Of all the world's property crashes, Dubai's has been among the most spectacular. According to an estimate from Morgan Stanley, projects worth £165 billion have been delayed or cancelled across the United Arab Emirates. Prices in Dubai have fallen by more than 40 per cent since September.

As prices soared, many investors bought off-plan, either because it was cheaper, in the case of small-time buyers looking for a home in the sun, or because they could "flip" or sell on for a quick profit without ever having to pay the full value.

Investors on the end of a chain of "flippers" have been hit particularly hard as prices fell while building was put on hold. But even those who bought from developers now face the dilemma of whether to keep paying or cut their losses. >>> By Richard Spencer in Dubai | Saturday, May 23, 2009
Fraud Alert on Premium Bonds

TIMES ONLINE: Fraudsters appear to be targeting cheques sent in the post by National Savings & Investments

A Times Money reader has issued a warning to all Premium Bond holders to be on their guard after his attempt to pay in a cheque triggered a security alert.

Tariq Sheikh, 30, a photographer, from Kent, withdrew £2,000 from his Premium Bond account by post in April and deposited the cheque at his local Halifax bank branch.

But when he tried to use his bank card to book an airline ticket two days later, the card was declined. When he rang Halifax he was told that his account had been suspended because of suspected fraud.

In an attempt to deal with the problem, Mr Sheikh went to his branch the next day with proof of ID. He says: “I was told that Halifax would not remove the freeze on my account until it had received confirmation from National Savings & Investments (NS&I) that I was the rightful owner of the £2,000 cheque I had deposited.

“When I questioned why this was necessary, the manager said that Premium Bond cheques were being altered and deposited into other people’s accounts rather than those of the intended recipients. It was possible that cheques were being intercepted before they reached their proper destination. There was a concern that my cheque might be one of these so I had to wait for three hours until NS&I faxed details to Halifax to confirm that I was the rightful owner.” >>> Mark Atherton | Saturday, May 23, 2009

Wednesday, 20 May 2009

Japan's Economy Suffers Record Plunge

THE TELEGRAPH: Japan's economy has suffered its worst quarterly performance since records began more than five decades ago as it continues to struggle with the economic crisis.

The world's second largest economy experienced a quarterly 4 per cent shrink in its gross domestic product (GDP) reflecting the continued impact of the recession on the export-dependent nation.

Hit hard by a global plunge in demand for cars and technology, Japan's economy shrank 15.2 per cent in the first quarter compared to last year, according to Cabinet Office figures.

The contraction eclipses that of other industrialised nations: the nation's GDP slide was more than double the 1.6 per cent recorded in the US and significantly higher than Europe's record 2.5 per cent.

A weakening in domestic demand has been the biggest contributor to Japan's decline, with consumer spending dropping 1.1 per cent and business investment plunging a record 10.4 per cent during the same period.

As companies continue to cut spending due to diminished demand, the number of underused factories and workers was continuing to grow, according to Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo.

"There is a huge problem of over capacity," he said. "That means capital spending is not likely to pick up." While the contraction is the biggest for Japan since records began in 1955, hopes have been raised that the economy will soon start to rebound following a slight surge in industrial production in March. >>> By Danielle Demetriou in Tokyo | Wednesday, May 20, 2009

Saturday, 16 May 2009

Der letzte Kraftakt des Terminators

TAGES ANZEIGER: Der kalifornische Gouverneur Arnold Schwarzenegger kämpft um sein politisches Überleben. Das Volk entscheidet über sechs Vorlagen und damit auch über seine Zukunft.

2010 ist spätestens Schluss: Arnold Schwarzenegger, Gouverneur von Kalifornien. Bild dank dem Tages Anzeiger

Ich freue mich, wieder hier in San Francisco zu sein», rief der Gouverneur in den vollen Saal des Hotels Fairmont. «Nach monatelangen Budgetverhandlungen freue ich mich, irgendwo zu sein. Diese Verhandlungen waren grauenhaft, schlimmer als der Dreh von ‹Hercules in New York›.» Arnold Schwarzenegger hatte die Lacher auf seiner Seite; die Anspielung auf seine Rolle des Mister Universe in seinem allerersten Film kam an. Es war einer der wenigen heiteren Momente für einen Gouverneur, der von seiner eigenen Partei völlig im Stich gelassen wird und dessen Popularitätskurve steil nach unten zeigt.

Am kommenden Dienstag entscheiden die Kalifornier, ob sie dem Gouverneur noch einmal eine Chance geben. Zur Abstimmung kommen sechs Vorlagen, um den an sich bankrotten Bundesstaat zu sanieren, darunter eine Ausgabenbremse sowie eine drastische Steuererhöhung, die kaum durchkommt. Umfragen zeigen, dass gar fünf der sechs Geschäfte auf der Kippe stehen. Der letzte Kraftakt des «Arnold Strong», der vor fünf Jahren angetreten war, den Staat von Grund auf zu reformieren und finanziell in Ordnung zu bringen, könnte misslingen. Dann hätte Schwarzenegger noch 18 Monate Zeit, einige der übrigen Reformvorhaben, namentlich eine Krankenversicherung für alle, unter Dach zu bringen. 2010 ist Ende: Wegen der Amtszeitbeschränkung muss er aufhören. >>> Von Walter Niederberger | Samstag, 16. Mai 2009
Massenarbeitslosigkeit und Armut: Proteste in ganz Europa

TAGES ANZEIGER: In europäischen Grossstädten sind Hunderttausende auf die Strasse gegangen – aus Angst vor Stellenabbau und Armut. In Berlin war auch eine Schweizer Rede zu hören.

Massenbewegung: Auch in Berlin zeigten die Menschen ihre Sorgen und forderten mehr Gerechtigkeit. Photo dank dem Tages Anzeiger

Die Menschen protestierten gegen den Sozial- und Stellenabbau, der wegen der Wirtschaftskrise immer mehr um sich greift. In Berlin versammelten sich am Samstag nach Angaben des Deutschen Gewerkschaftsbundes (DGB) 100'000 Menschen; laut der Polizei waren es mehrere zehntausend. Unter dem europaweiten Motto «Fight the crisis – put people first» zogen die Demonstranten in zwei grossen Protestzügen durch die Innenstadt. >>> raa/sda | Samstag, 16. Mai 2009

THE TELEGRAPH: Europe in Deepest Recession Since War as Germany Suffers

German economic policy is "bankrupt", economists have said.

The declaration was made as it emerged that Europe's biggest economy has now suffered a worse "lost decade" than Japan and is deeper in recession than any other major economy.

On a day of dismal news for the European economy, official figures also showed that Italy, Austria, Spain and the Netherlands are facing their biggest combined slump in post-war history, sparking warnings about the potential for social unrest throughout Europe. >>> By Edmund Conway and Angela Monaghan | Friday, May 15, 2009
Anti-capitalist Sentiment in Europe Grows Apace

Germany – Oskar Lafontaine: 'We Want to Overthrow Capitalism'

SPIEGELONLINE INTERNATIONAL: In an interview with SPIEGEL ONLINE, Left Party Chairman Oskar Lafontaine speaks about his party's chances in the upcoming elections, its alleged drift to the left and why Angela Merkel needs to work through certain aspects of her communist past. >>> | Thursday, May 14, 2009

BBC: France – Olivier Besancenot: French Rebel with a Cause

The young man dressed simply but smartly in a black shirt and jeans clutches a large microphone in one hand, while the other cuts the air, soars, jabs.

The impish grin has gone and he radiates passion and an air of seriousness - for all the world like the one member of a boy band who has the talent to go solo and live on beyond his good looks. (I owe my colleague John Lichfield, The Independent's superb Paris correspondent, for sparking the comparison.) Olivier Besancenot is the Robbie Williams of French Communism.

"Don't let them tell us that we are after utopia.

"It is" - and he spreads out the word to make a point about the economic crisis - "a pol-i-ti-cal choice: when there is a natural disaster, an earthquake or a war, the state declares a state of emergency. For us the social consequence of capitalism is a natural disaster". >>> Mark Mardell | Tuesday, May 12, 2009

Friday, 15 May 2009

Finanzkrise: Obama prangert Gier und Egoismus der Eliten an

WELT ONLINE: Mit deutlichen Worten hat US-Präsident Barack Obama in einer Rede an der Universität von Arizona amerikanische Eliten kritisiert. Viele Banker an der Wall Street seien wegen kurzfristiger Gewinne und Bonuszahlungen vom Weg abgekommen. Die Universität hatte Obama vorher den Ehrendoktor verweigert.

Rechnet mit gierigen Managern ab: US-Präsident Barack Obama geißelt den Egoismus der Führungskräfte seines Landes. Bild dank der Welt

US-Präsident Barack Obama hat in einer Rede vor Studenten Gier und Egoismus angeprangert. Die USA und die gesamte Welt befänden sich gerade in einer Zeit "außergewöhnlicher Schwierigkeiten", sagte der Präsident auf der Abschlussfeier der Universität von Arizona in Tempe.

Verantwortlich seien dafür größtenteils die politischen und wirtschaftlichen Eliten, sagte Obama vor 63.000 Zuhörern. Statt sich um die Interessen des Landes und die der Bürger zu kümmern, sorgten sich viele Politiker vor allem um die nächsten Wahlen. Viele Banker an der Wall Street seien wegen kurzfristiger Gewinne und Bonuszahlungen vom Weg abgekommen.

Obwohl US-Hochschulen die Redner bei ihren akademischen Feiern in der Regel mit Ehrendoktortiteln auszeichnen, ging Obama leer aus. Die Universität von Arizona hatte dem Präsidenten bereits im Vorfeld eine Abfuhr erteilt und erklärt, er habe für die Auszeichnung noch nicht genug geleistet. >>> AFP/AP/fsl | Donnerstag, 14. Mai 2009

Wednesday, 13 May 2009

USA : un donateur mystère 
au secours des universités

L'université du Michigan a empoché la somme record de 10 millions de dollars, le 23 avril dernier. Photo grâce au Figaro

LEFIGARO: Ces dernières semaines, 15 universités ont reçu entre 1.5 et 10 millions de dollars chacune et anonymement.

Les plus fins limiers américains ont de quoi s'arracher les cheveux sur cette nouvelle énigme, digne de Sherlock Holmes. Depuis début avril, quinze universités se sont vues remettre quelque 76 millions de dollars de la part d'un mystérieux donateur. Les dons tournent autour de 6 ou 7 millions de dollars par établissement environ. Seule l'université du Michigan a empoché la somme record de 10 millions de dollars, le 23 avril dernier.

A chaque fois, le schéma est le même : l'université se voit informer du don par un courrier apporté par un avocat, un banquier ou un intermédiaire. Les instructions sont aussi toujours identiques : l'argent doit être attribué à des bourses dédiées aux étudiants les moins argentés. Et condition sine qua non : l'établissement ne doit pas chercher à savoir d'où proviennent les millions.

Des consignes qui ont jusque là été bien respectées puisque personne ne sait qui se cache derrière ces incroyables dons. «La meilleure façon de rendre hommage au donateur, c'est de respecter son ou ses souhaits et de ne pas spéculer sur les détails», tranche ainsi la porte-parole de l'université Purdue, dans l'Indiana, qui a empoché 8 millions de billets verts.

Un raisonnement qui ne convainc pas les médias américains, à l'affût du moindre indice et de n'importe quelle théorie. >>> Julie Connan ( | Mardi 12 Mai 2009
1. Quartal: Freddie Mac verliert weitere zehn Milliarden Dollar

WELT ONLINE: Und wieder ein katastrophales Quartal für den US-Hypothekenfinanzierer: Freddie Mac hat zum Jahresanfang einen riesigen Verlust von fast zehn Milliarden Dollar eingefahren. Vor wenigen Wochen hatte sich bereits der Finanzchef des Instituts erhängt. Nun benötigt Freddie Mac weitere Staatsgelder.

Der staatlich kontrollierte zweitgrößte US-Hypothekenfinanzierer Freddie Mac hat zum Jahresauftakt erneut einen enormen Verlust von fast zehn Milliarden Dollar eingefahren. Nach dem bereits siebten Quartalsminus in Folge beantragte das Institut am Dienstagabend (Ortszeit) eine weitere Finanzspritze des Staates von 6,1 Milliarden Dollar (4,5 Mrd Euro). Die Hilfen summieren sich damit bisher auf mehr als 50 Milliarden Dollar. >>> dpa/lw | Mittwoch, 13. Mai 2009

Tuesday, 12 May 2009

City Bankers Are Already Lining Up for Bonuses Again

After helping the world get into its financial mess, bankers at HSBC are now lining up for renewed bonuses. Photo courtesy of MailOnline

MAIL Online: HSBC bankers are in line for bumper bonus payouts after an 'encouraging' jump in profits.

While the company's performance added impetus to a day of good economic news, the re-emergence of the City's discredited bonus system will be an embarrassment for Gordon Brown, who has promised to outlaw reckless behaviour in the Square Mile.

Taxpayer-controlled Royal Bank of Scotland has already started offering 'guaranteed' bonuses to traders in defiance of promises it made to rein in no-strings-attached rewards.

And Barclays is gearing up for massive payouts after profits rose 15 per cent in the first three months of 2009.

The culture of extravagant bonuses encouraged bankers to take ever bigger risks, laying the ground for the gravest financial crisis since the Great Depression of the 1930s. >>> By Simon Duke | Tuesday, May 12, 2009

Saturday, 9 May 2009

Barack Obama's Rich Supporters Fear His Tax Plans Show He's a Class Warrior

THE TELEGRAPH: Some of Barack Obama's richest supporters fear they have elected a "class warrior" to the White House, who will turn America's freewheeling capitalism into a more regulated European system.

Photo courtesy of The Telegraph

Wealthy Wall Street financiers and other business figures provided crucial support for Mr Obama during the election, backing him over the Republican candidate John McCain as the right leader to rescue the collapsing US economy.

But it is now dawning on many among them that Mr Obama was serious about his campaign trail promises to bring root and branch reform to corporate America - and that they were more than just election rhetoric.

A top Obama fundraiser and hedge fund manager said: "I'm appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it's the real world. I'm surprised that Obama is turning out to be so left-wing. He's a real class warrior."

Chris Edwards of the Cato Institute, a free enterprise think tank, said Democrats in Congress were unnerved by the president's latest plan to raise $210 billion over 10 years from multinational corporations.

The money is needed to pay for a national debt that will double over the next five years; and triple over the next 10 years to $17.3 trillion. But the crackdown already faces fierce Democratic resistance.

"These big companies are based in New York Boston, Seattle and Silicon Valley, where Democrats dominate," Mr Edwards said. "Obama's tax plan is already cleaving him from his big corporate supporters," he said.

Mr Obama made no secret of his plans to raise taxes on the "working rich" (individuals earning more than $200,000) by imposing a top income tax rate of almost 40 per cent, and there is little surprise that those plans remain on track, even during the worst economic crisis since the Great Depression.

But Democratic opposition is building in Congress to many of the President's proposals. A plan to reduce tax deductions for charitable gifts by richer people may have to be scrapped, because the charitable sector - which includes hospitals, museums and voluntary service groups - depends heavily on tax-deducted donations.

Charles Rangel, the New York chairman of the Ways and Means Committee, which drafts tax legislation, raised a red flag about the proposal last week. "I would never want to adversely affect anything that is charitable or good," he said.

Mr Obama also wants to "cap and trade" carbon emissions - seen by business as effectively yet another tax - to tackle global warming.

The president's plans are direct repudiation of the model of light touch regulation credited with creating economic growth and wealth in America in recent decades. >>> By Leonard Doyle in Washington | Saturday, May 9, 2009

Wednesday, 6 May 2009

Sharia Boards: Scholars Hold Sway over the Success of Products

FINANCIAL TIMES: The ultimate arbiters of the Islamic finance industry are not regulators, bespoke-suited bankers or the authorities, but a small, select coterie of ascetically garbed scholars versed in Koranic verses and arcane areas of jurisprudence.

This was made abundantly clear last year, when Sheikh Taqi Usmani, a leading scholar of sharia-compliant finance, shocked the industry by declaring many Islamic bonds, or sukuk, had gone too far in mimicking conventional debt.

Bankers and lawyers debate whether it was Sheikh Taqi or the credit crunch that caused the sukuk market to clam up: most admit the denouncement did not help.

The sharia supervisory boards – that Islamic banks must have – approve or ban transactions, products and services but do not become involved in credit policy or portfolio choices.

This can bring them into conflict with bankers who have conjured up increasingly complicated products.

“I’ve seen banks where the relationships were close, and others where they were tense, but everyone knows you cannot do anything without the scholars’ blessing,” says an industry insider.

Bankers say – until the credit crunch – the scarcity of sharia scholars was the biggest drag on growth of the Islamic finance industry.

Islamic banks have multiplied in recent years, thanks to government support, a profusion of petrodollars and a favourably inclined customer base in much of the Muslim world.

However, the number of scholars qualified to pass judgment on banks has remained low at about 30-40.

In addition to exhaustive knowledge of sharia and Islamic jurisprudence, scholars have to be financially knowledgeable and comfortable with English – the language of most financial and legal documentation. >>> By Robin Wigglesworth | Tuesday, May 5, 2009