Saturday 28 February 2009

Dubai Falls on Hard Times

NRC HANDELSBLAD: The wealthy Gulf state of Dubai has been hit hard by the global economic crisis. Tens of thousands of workers have been laid off and forced to return to their homelands. The Dutch community in Dubai is also feeling the pinch.

Jan Demmink has lived in Dubai for 28 years. It's the pleasant atmosphere, the entrepreneurial spirit and the climate that keep him in the Gulf state. He witnessed the transformation of what was once a tranquil and prosperous town into the vast collection of skyscrapers that makes up modern-day Dubai.

Under the leadership of Sheik Mohammed and his father Maktoum III, the emirate invested in the financial sector, tourism and real estate. The bigger, more expensive and more luxurious the better. Yet these are the very sectors that have been shaken to their foundations by the crisis and meanwhile Dubai has no major oil reserves to fall back on.

Financial nosedive

Jan Demmink works in the electronic security of complexes such as refineries, palaces and roads. His position is safe for the time being. "I work on long-running projects, so I have yet to feel the effects of the crisis," he explains. "But in construction you can see the signs already. A halt has been called to projects that were only started recently, or which have yet to get under way."

Dutch dredging company Van Oord is one of those in the firing line. The company hit the headlines worldwide with the construction of Palm Jumeirah, the first of Dubai's famous Palm islands and the construction of The World archipelago. Van Oord was all set to embark on a third island project, Palm Deira, an order worth 2.5 billion euros, the largest in the company's history. Part of the order has already been realised but the rest is on the back burner for the foreseeable future. The funding simply isn't there. Spokesman Bert Groothuizen says no one saw the rapid changes coming. "It was a nosedive. Especially in the fourth quarter of 2008. And I don't think these problems will be solved in six months' time." Expats Feeling the Economic Nosedive in Dubai >>> By Willemien Groot for Radio Netherlands Worldwide | Friday, February 27, 2009

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Friday 27 February 2009

Doha-sur-Seine: ce Qatar qui aime la France

L’EXPRESS.fr: Pour le tourisme ou les affaires, les Qataris adorent Paris. Immobilier de luxe, opérations financières, sponsoring sportif... ils investissent la capitale.

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L'hôtel d'Evreux (au centre), place Vendôme à Paris, a été acheté par l'émir du Qatar en 2003. Photo grâce à l’AFP

Un petit vent frisquet balaie les Champs-Elysées, cet après-midi de février. Emmitouflé dans une doudoune de marque, Fadi, 25 ans, fait quelques emplettes avec sa mère. Manteau long, foulard rehaussé de perles sur les cheveux, madame s'engouffre dans une boutique de luxe. "Nous sommes ici pour quelques jours, avec mes frères et soeurs, glisse le jeune homme. Nous descendons toujours au même hôtel, tout près d'ici." La conversation est rapidement interrompue par l'intervention d'un garde du corps, aux bras chargés de paquets. Une scène presque coutumière dans ce quartier chic: depuis quelques années, de nombreux ressortissants qataris, comme Fadi et sa famille, ont fait de Paris l'une de leurs destinations favorites. La Ville Lumière attire aussi bien les touristes fortunés que la famille de l'émir et les principaux groupes financiers du pays - ce qui revient parfois au même. Ces visiteurs, qui disposent de l'un des revenus par habitant les plus élevés au monde (48 900 euros par an), viennent goûter aux plaisirs de la culture, du luxe et du fameux "romantisme" made in France. Les hommes d'affaires, eux, investissent dans l'immobilier, l'hôtellerie quatre étoiles, le parrainage sportif, quand ils n'entrent pas dans le capital de grandes sociétés françaises. Alors que la Qatar Islamic Bank (QIB) doit ouvrir une succursale à Paris, l'année prochaine, quelques lieux privilégiés de l'Ouest parisien prennent déjà de faux airs de Doha-sur-Seine.

"Chez nous, les gens appellent les Champs-Elysées la ''route des Arabes du Golfe'", raconte, dans un français alerte, Talal, 21 ans, étudiant qatari en droit. L'été, les touristes de l'émirat prennent leurs quartiers dans les palaces voisins: George V, Fouquet's, Marriott, Crillon, etc. Dans ces établissements somptueux, où le prix d'une nuit peut atteindre 2500 euros, les clients bénéficient d'un confort et d'une confidentialité appréciables. "Ils se lèvent très tard, voire en début d'après-midi, car beaucoup d'entre eux sortent toute la nuit dans les cafés, restaurants et cabarets des alentours", confie l'employé d'un hôtel. >>> Par Boris Thiolay, Henri Haget, Olivier Saretta | Vendredi 27 Février 2009

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Global Shares Dive as US Recession Deepens

TIMES ONLINE: Shares across the UK, America and Europe tumbled today after it emerged that the US economy shrank at the fastest rate since 1982 in the final three months of last year, far worse than the US Government had initially estimated.

Gross domestic product (GDP) fell at an annual rate of 6.2 per cent between October and December, above initial estimates of a 3.8 per cent decline during the fourth quarter of 2008.

In response, London's FTSE 100 index plunged further below the 4,000 level today, losing 127.35 points to 3,788.29 and America's Dow Jones industrial average fell 132.45 points to 7,049.63.

Investors in Germany and France also took fright - Frankfurt's Dax fell 4.1 per cent while French-listed stocks dropped 3.3 per cent to 2,654.52.

With President Obama's fiscal stimulus packages not expected to become effective until the second quarter of this year, Wall Street is expecting growth numbers for the current quarter of 2009 to be as bad as the last three months of 2008.

According to the new GDP numbers, the US economy actually contracted by 6.2 per cent - the worst showing in 27 years - at the end of last year because American exports plunged by more than expected and the US consumer stopped spending.

The worse than expected numbers show that the US economy is struggling to cope on two fronts - on one side, foreign markets have applied the brakes to buying US goods as their own economies plunge deeper into recession.

On the other front, Americans have become so anxious that they may also join the soaring numbers of unemployed that they have stopped spending on all but essential items such as food and petrol. >>> Grainne Gilmore | Friday, February 27, 2009

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The Dangers of Printing Money

TIME Photo Gallery: The Fed's doing it. The Bank of England says it plans to do it, too. With printing money back in fashion, TIME reflects on Germany's efforts in the 1920s — and the crisis that followed >>> | Friday, February 27, 2009

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Liberals Are The True Heirs Of The Nazi Spirit

THE SPECTATOR: James Delingpole talks to Jonah Goldberg about his book on the affinities between the modern Left and the totalitarian movements of the 20th century

Jonah Goldberg’s Liberal Fascism is a conservative’s wet dream. No, it’s better than that. The moment you read it — presuming you’re right-wing, that is — you will experience not only a rush of ecstasy, but also a surge of revolutionary fervour and evangelical zeal. You’ll want to email all your friends and tell them the wonderful news: ‘I’m not an evil bastard, after all!’

What Goldberg very effectively does is to remove from the charge sheet the one possible reason any thinking person could have for not wanting to be right-wing: viz, that being on the right automatically makes you a closet fascist/Nazi scumbag. By accumulating a mass of historical evidence so extensive it borders on the wearisome, Goldberg comprehensively demonstrates that both Nazism and fascism were phenomena of the Left, not of the Right.

The book, a New York Times No. 1 bestseller has, needless to say, enraged lefties (‘liberals’ as they’re more usually known in the States) everywhere. ‘In the first week I had half a dozen emails from total strangers saying, “How dare you accuse us caring liberals of being fascists!” and then going on to say what a shame it was that my family hadn’t been sorted out once and for all a few years back in the concentration camps,’ he says.

Goldberg is a New York Jew and growing up as a conservative in Manhattan’s impeccably liberal, Jewish Upper West Side, he said he often felt like a Christian in Ancient Rome. At school and university, whenever he spoke in favour of tax cuts or a free market economy, the response was invariably the same. ‘Nazi’, he was called. Or ‘fascist’. By the time he was established as a contributing editor to National Review, he’d had quite enough of this. He spent four years researching and writing the book which would put the record straight.

What he found astonished him. Nazism and fascism, it turned out, were closer kindred spirits of Soviet communism than he could ever have imagined. The first expressed itself through ideas about racial purity and Jew-hatred, the second with ideas about the primacy of the nation, but in most other respects they were all remarkably similar: seizing the means of production; empowering the masses; rule by experts; the elevation of youth and brute emotion over wisdom, tradition and intellect; the submission of the individual to the will of the state. As Goldberg wryly puts it, ‘The Nazis were not big on property rights and tax cuts.’ >>> James Delingpole | Wednesday, February 25, 2009

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The Face that Turns Anyone's Stomach!

THE TELEGRAPH: Sir Fred Goodwin's £693,000-a-year pension is a symbol of banking excess we can ill afford, says Philip Johnston.

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’Fred the Shred’, the self-satisfied ex-boss of RBS who presided over the collapse of the bank, now walks away with pension arrangements in Monopoly figures whilst the taxpayer has to pick up the tab. Photo courtesy of The Telegraph

When he appeared before the Commons Treasury Select Committee a few weeks ago, Sir Fred Goodwin, the former chief executive of RBS, was asked about his pension arrangements. The Labour MP John Mann questioned whether his pension was linked to the fortunes of the once mighty bank that he had steered on to the rocks in his eight years at the helm. In light of the disclosure that Sir Fred is receiving a £693,000 annual pension from a 'pot' worth an estimated £25 million, it is worth recalling this exchange.

"Many pensioners in this country have seen their pension go down because share values have gone down", said Mr Mann. "As a principle, would it not be fair that your pension, which is rather a high pension – over £8 million I have seen quoted – would it not be fair to other pensioners in Britain that your pension was linked to the share value of the bank that you ran?" Sir Fred replied: "No, my pension is the same as everyone else in the Bank who is in a defined benefit pension scheme."

There was a populist edge to Mr Mann's line of questioning that should make anyone who believes in the free market and the right of successful individuals to enrich themselves feel uncomfortable. After all, is it being suggested that Sir Fred should not have a pension of any sort or a pay off when he is forced to leave his job? He also had a significant number of shares in RBS and therefore lost a lot of money when they fell in value from around £5.50 to 20p. On the other hand, he brought this disaster upon himself and many others who are far worse off than him; so why should he benefit in any way from the debacle?

What is most revealing about his evidence to MPs is what Sir Fred failed to say. When Mr Mann mentioned the figure of £8 million, he did not correct him and point out that it was, in fact, almost certainly three times that. Further sums, we now learn, were added to his pension pot shortly before the bank crashed with the biggest corporate debt in British history, forcing the taxpayer to rescue it. This top-up meant that Sir Fred could draw a pension even greater than his annual "basic" salary of £650,000 for the rest of his life. Pension analysts believe that to buy a £693,000 annual pension at the age of 50 would cost at least £25 million. >>> Philip Johnston | Friday, February 27, 2009

THE TELEGRAPH: Sir Fred Refuses to Give Back His Pension


THE TELEGRAPH:
Treasury Approved £700,000 Pension, Says Fred Goodwin: The "obscene" £693,000 a year pension paid to Sir Fred Goodwin, the man who steered Royal Bank of Scotland to the brink of collapse, was approved by Government ministers, it has emerged. >>> By Andrew Porter and Robert Winnett | Friday, February 27, 2009

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US Economy Shrank at Faster Rate in Fourth Quarter

REUTERS: WASHINGTON - The U.S. economy contracted at its sharpest rate since early 1982 in the fourth quarter, revised data showed on Friday, as exports plunged and consumers cut spending by the most in more than 28 years.

The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, shrank at a revised annual rate of 6.2 percent in the October-December quarter, much steeper than the 3.8 percent fall estimated last month.

The weaker GDP estimate reflected downward revisions to inventories and exports by the department.

U.S. stock index futures extended losses after the report, and the dollar fell against the yen. U.S. government debt prices were steady at higher levels.

"It's just doom all over. There's nothing good to take away from this report. I think there's a few more bad quarters to come," said Boris Schlossberg, director of currency research at GFT Forex in New York.

Prospects for the first quarter are equally bleak with data so far pointing to an acceleration in the economic downturn, now in its 14th month. >>> By Lucia Mutikani | Friday, February 27, 2009

THE GUARDIAN:
US Economy Shrinks at Worst Pace in 25 Years: Dow plunges over 100 points in early trading as commerce department says US gross domestic contracted at 6.25% >>> Daniel Nasaw in Washington | Friday, February 27, 2009

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Thursday 26 February 2009

Treasury Starts Legal Steps to 'Claw Back' Sir Fred Goodwin Pension Pot

TIMES ONLINE: Sir Fred Goodwin may be forced to give up some of his massive £650,000 pension if he refuses pleas to "do the decent thing" and surrender it voluntarily.

Alistair Darling, the Chancellor, today denied a suggestion from Sir Fred's successor at the Royal Bank of Scotland that the Government had known about the deal to top up the banker's pension pot when he left the ailing bank last year.

He also revealed that he had instructed a Treasury minister, Lord Myners, to contact Sir Fred and ask him voluntarily to give up some of his pension.

“I think people will find it very difficult to understand how you can get paid £650,000 a year for the rest of your life when just look at the state that RBS is in at the moment,” Mr Darling told BBC Radio 4. “You cannot justify these excesses, especially when you’ve got such a failure of this magnitude.” >>> Philip Webster, Political Editor, and Philippe Naughton | Thursday, February 26, 2009

BBC: RBS Reports Record Corporate Loss

Royal Bank of Scotland (RBS) has announced the largest annual loss in UK corporate history.

RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn ($34.2bn).

It also said it would put £325bn of toxic assets into a scheme that offers insurance for any further losses.

RBS is under fire over the pension of former boss Sir Fred Goodwin and the chancellor said the government had asked him to forego some of it.

Speaking at a news conference, RBS chief executive Stephen Hester said the bank was "under no illusions" about the scale of the losses.

He added that it was important "to think about the past, to know what went wrong, to disclose it and to address those issues". >>> | Thursday, February 26, 2009

Watch BBC video: Gordon Brown has said 'nobody can support very extensive pension arangements' at this time. >>>

Watch BBC video: Liberal Democrat treasury spokesman Vince Cable has launched a scathing attack on the government's scheme to insure banks against big losses. >>>

Watch BBC video: Chancellor Alistair Darling has spoken about the huge pension awarded to former Royal Bank of Scotland (RBS) boss Sir Fred Goodwin.

RBS has come under fire, after it emerged Sir Fred, who retired at 50, is drawing a £650,000 a year pension.

Speaking in the Commons, Mr Darling said the government had no part in negotiating the agreement otherwise it would not have been approved. >>>


THE TELEGRAPH:
Sir Fred Goodwin Refuses to Give Up £693,000 RBS Pension: Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland, has refused to give up his £693,000 a year pension and claims that a minister approved the deal. >>> By Katherine Griffiths | Thursday, February 26, 2009

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Staatliche Kontrolle: Obama will die Finanzmärkte weltweit regulieren

WELT ONLINE: Die Finanzmärkte müssen sich ändern, und zwar schnell und drastisch: US-Präsident Barack Obama forderte bei einem Treffen mit Wirtschaftsexperten des US-Kongresses eine stärkere Regulierung der Märkte. Bis zum G-20-Gipfel am 2. April in London soll ein Regelwerk ausgearbeitet werden.

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Scheinbar will Obama gar alles regulieren. Sicherlich wird er alles ganz anders machen als Reagan und Thatcher, die an die Macht gekommen waren, um die Leute zu befreien und die Wirtschaft durch Deregulierung einen Stoß vorwärts zu geben. Die Amerikaner sollten übers Wasser blicken, um zu sehen was Sozialismus mit sich bringt! Dann werden sie sehen können, was ihnen bevorsteht, und sie werden auch sehen können, was für Mist sie gebaut haben, in dem sie dieser Unerfahrene an die Macht gebracht haben! – ©Mark Foto dank der Welt

US-Präsident Barack Obama dringt auf eine zügige Reform der Finanzmarkt-Regularien. „Wir können die Märkte des 21. Jahrhunderts nicht mit den Bestimmungen aus dem 20. Jahrhundert aufrecht erhalten“, sagte er im Anschluss an ein Treffen mit Finanzminister Timothy Geithner und Wirtschaftsexperten des US-Kongresses.

Die aktuelle Finanzkrise sei nicht unvermeidbar gewesen, sagte Obama. Die gesetzlichen Regeln für den Banken- und Finanzsektor seien nicht den Änderungen der Branche angepasst worden.

Der US-Präsident kündigte strenge staatliche Aufsicht für Unternehmen an, deren Geschäfte die Sicherheit des Marktes beeinträchtigten. >>> Quelle: AFP | Donnerstag, 26. Februar 2009

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Obama veut lancer le chantier de l'assurance-maladie

LE FIGARO: Les tentatives de réformes ont maintes fois échoué. Obama propose de donner le choix à la population entre couverture publique et assurance privée.

Barack Obama veut que le Congrès adopte une réforme du système d'assurance-maladie dès cette année. «La réforme de la santé ne peut pas attendre et elle n'attendra pas encore un an», a-t-il martelé mardi soir sous les applaudissements des deux Chambres du Congrès.

L'objectif est très ambitieux car la réforme sera coûteuse : Obama prévoit la création d'un fonds de réserve de 634 milliards de dollars sur dix ans, a-t-il annoncé mercredi. Or, les finances fédérales sont gravement mises à mal par la récession et le plan massif de relance juste voté.

La semaine prochaine, à l'occasion d'un «sommet sur la santé», le président des États-Unis va réunir à la Maison-Blanche des experts du secteur privé et les élus les plus impliqués dans ce débat. Max Baucus, sénateur démocrate du Montana, un modéré qui pré­side la commission des finances, ainsi que Ted Kennedy, sénateur démocrate du Massachusetts, devraient jouer un rôle clé dans l'élaboration, d'ici à l'été, d'une proposition de loi. C'est en effet au Sénat, plus qu'à la Chambre, que le travail législatif délicat de compromis doit se faire.

Aucune loi ne peut être adoptée au Sénat sans que la majorité démocrate ne rallie à sa cause une poignée de voix républicaines. Les républicains partagent certains objectifs de leurs collègues démocrates. Ils veulent ainsi soulager les petites entreprises et les travailleurs indépendants du coût exorbitant des primes d'assurance privées. Ils souhaitent en outre promouvoir la concurrence entre assureurs privés. Entreprises asphyxiées >>> Pierre-Yves Dugua | Jeudi 26 Février 2009

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Wednesday 25 February 2009

Speech Lifts Obama But Stocks Fall Yet Again

TIMES ONLINE: The voters loved it. The pundits gushed. Even the pollsters were impressed.

But economic reality soon intruded to burst the bubble around Barack Obama's address to Congress last night in which he promised America that it would emerge "stronger than before" from the economic slump.

Wall Street stocks plunged again at the opening bell this morning, the Dow Jones Industrial Average losing almost 2 per cent in value as investors ignored Mr Obama's soaring rhetoric and lamented a lack of detail in his economic recover plans. Official data showing an unexpected drop in the number of home sales did nothing to reassure them. >>> Philippe Naughton, and Tim Reid in Washington | Wednesday, February 25, 2009

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Tuesday 24 February 2009

”There Will Be Blood”

GLOBE AND MAIL: Harvard financial guru Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends

Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.
“There will be blood.”

The Buy America penchant pushed by the U.S. Congress in passing the recent stimulus bill was only the tip of the iceberg.

Abu Dhabi buying Nova Chemicals at bargain-basement prices on Monday is a sign of things to come, with financial power quickly being transferred over to the world's creditors – namely sovereign wealth funds – and away from the world's debtors.

And much of today's mess is the fault of central bankers who targeted consumer-price inflation but purposefully turned a blind eye to asset inflation.

The Laurence A. Tisch professor of history at Harvard University, and author of The Ascent of Money, A Financial History of the World, sat down with The Globe and Mail's economics reporter, Heather Scoffield. >>> Heather Scoffield | Monday, February 23, 2009

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Asia Stocks Fall on Growing US Economic Fears

TIMES ONLINE: Asian stocks fell heavily on Tuesday following last night's sharp decline in American shares. Investors responded to fears that the world's largest economy is sinking further into recession and speculation that the US Government may be forced to buy stakes in ailing banks, despite assurances from Washington that lenders would not be nationalised.

Japan's Nikkei Index fell by 1.5 per cent to a four-month low, narrowly avoiding a slide to below 7,000 for the first time in 26 years, closing at 7,268.56. In Hong Kong, the Hang Seng lost 461.46 points, or 3.5 per cent, to end the day at 12,713.64. Last night, the Dow Jones industrial average fell to an 11-year low, losing 250.89 points to 7,114.78.

Japanese shares remained in the red for the day despite hints from Kaoru Yosano, the newly appointed Finance Minister, that the Government may be working on more measures to support the domestic share market. "The side-effects of falling stock prices are worse than expected,” said Mr Yosano. “We are witnessing many negative wealth effects with impaired assets held by banks and insurance firms.”

Japan's Government is understood to be mulling over plans to buy falling stocks with money from the public purse in an effort to keep prices buoyant. >>> Leo Lewis, Asia Business Correspondent | Tuesday, February 24, 2009

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Sunday 22 February 2009

EU-Länder wollen lückenlose Kontrolle des Finanzsystems: Vorbereitungstreffen in Berlin für den Weltfinanzgipfel in London

NZZ Online: Die wichtigsten EU-Länder haben sich laut Bundeskanzlerin Angela Merkel auf Schritte für strengere Kontrollen der internationalen Finanzmärkte verständigt.

Die europäischen G-20-Staaten dringen auf eine lückenlose Kontrolle des weltweiten Finanzsystems. Alle Finanzmärkte, -produkte, Markteilnehmer, Hedgefonds und Ratingagenturen, sollen einer Aufsicht und Regulierung unterstellt werden, sagte Bundeskanzlerin Angela Merkel in Berlin.

Dort kam das Vorbereitungstreffen für den Weltfinanzgipfel in London Anfang April zum Abschluss. Zur Verbesserung der Stabilität an den internationalen Finanzmärkte wollen die europäischen G-20-Mitgliedsländer Steueroasen austrocknen. >>> sda/afp/dpa/Reuters | Sonntag, 22. Februar 2009

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Saturday 21 February 2009

EU-Kommission will Bonus-Zahlungen begrenzen

Die Europäische Kommission bereitet laut Kommissionspräsident José Manuel Barroso eine Initiative zur Begrenzung von Bonuszahlungen an Manager vor.

«Exzessive Bonuszahlungen verleiten Finanzmanager dazu, unvertretbare Risiken einzugehen. Die Folgen sehen wir jetzt in der Finanzkrise», sagte Barroso in der Samstagsausgabe des «Hamburger Abendblatt». Daher solle ein System geschaffen werden, das die Gier nach schnellen Gewinnen zügele und das Scheitern nicht belohne. >>> mbr/ap | Samstag, 21 Februar 2009

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Friday 20 February 2009

Dow Tumbles on Bank Nationalisation Fears

THE TELEGRAPH: America's leading Dow Jones Industrial Average touched a new bear-market low last night as investor concern that a number of major banks may be nationalised reached fever-pitch and sent banking shares to 17-year-lows.

The Dow Jones index touched a new low for the current bear market following a number of near-misses earlier in the week, closing down 89.68 points – or 1.17pc – at 7,465.95. The closing level was some 87 points below the previous low in the current bear market – of 7552.29 on November 20.

The benchmark index was dragged down on fears over the solvency of a number of major banks, including Citigroup and Bank of America, both of which ended the day 14pc lower. The KBW banking sector index fell to its lowest level in 17 years as a result. >>> By James Quinn, Wall Street Correspondent | Friday, February 20, 2009

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Thursday 19 February 2009

Barack Obama Admits He Doesn’t Understand the Stock Market


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Rising Debt May Overwhelm Barack Obama's Effort to Rescue the Economy

TIMES ONLINE: President Obama was hit with another wave of grim financial news yesterday, amid signs that his Administration is in danger of being overwhelmed by the scale of the economic crisis.

As he outlined a $75 billion (£52 billion) plan to halt home repossessions across America, evidence emerged of the enormous struggle Timothy Geithner, the Treasury Secretary, is having to come up with a detailed solution to stabilise the stricken banking sector.

Chrysler and General Motors also said that they needed up to $22 billion more in government funds to avoid collapse, leaving Mr Obama the difficult decision of whether to keep pumping taxpayers' money into the carmakers.

The motor industry received $17.4 billion in federal funds in December. Its bankruptcy could cause millions of job losses. Mr Geithner and Lawrence Summers, the White House economic adviser, must determine by March 31 whether the companies' plans for long-term survival are viable.

In another sign of the depth of the recession a report showed that construction of homes and applications for future projects dropped by 17 per cent last month to a record low. >>> Tim Reid in Washington | Thursday, February 19, 2009

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Mandelson and Starbucks Clash on UK Economy: Attack stirs furious business secretary to defence of Britain

Listen to GUARDIAN audio: Andrew Clark on Peter Mandelson's tirade against Starbucks >>> Patrick Wintour, Political Editor | Thursday, February 19, 2009

THE INDEPENDENT: Mandelson strop: Who the F@#! Is Howard Schultz?

The Starbucks boss provoked an extraordinary response from Lord Mandelson when he dared to criticise the state of the British economy

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Howard Schultz, the Starbucks boss and one of America’s most senior entrepreneurs, upset Lord Mandelson by criticising the British economy. Lord Mandelson used a four-letter expletive. Photo courtesy of The Independent

Lord Mandelson’s famed silver-tongue deserted him on a business trip to New York when he responded with a four-letter tirade against one of America’s most senior entrepreneurs, the Starbucks boss Howard Schultz.

The American, chief executive of the world’s biggest coffee chain, spoke of his corporation’s recent struggles in a television interview. “The concern for us is western Europe and specifically the UK,” he said. “The UK is in a spiral.” Mr Schultz described consumer confidence in Britain was “very, very poor”. >>> By Martin Hickman and Nigel Morris | Thursday, February 19, 2009

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Wednesday 18 February 2009

Gold Hits Record against Euro on Fear of Zimbabwean-style Response to Bank Crisis

THE TELEGRAPH: Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a "Zimbabwe-style" debasement of the international monetary system.

"This gold rally is driven by safe-haven fears and has a very different feel from the bull market we've had for the last eight years," said John Reade, chief metals strategist at UBS. "Investors are seeing articles in the press saying governments should deliberately stoke inflation, and they are reacting to it."

Gold jumped to multiple records on Tuesday, triggered by fears that East Europe's banking crisis could set off debt defaults and lead to contagion within the eurozone. It touched €762 an ounce against the euro, £675 against sterling, and 47,783 against India's rupee.

Jewellery demand – usually the mainstay of the industry – has almost entirely dried up and the price is now being driven by investors. They range from the billionaires stashing boxes of krugerrands under the floors of their Swiss chalets (as an emergency fund for total disorder) to the small savers buying the exchange traded funds (ETFs). SPDR Gold Trust has added 200 metric tonnes in the last six weeks. ETF Securities added 62,000 ounces last week alone.

In dollar terms, gold is at a seven-month high of $964. This is below last spring's peak of $1,030 but the circumstances today are radically different. The dollar itself has become a safe haven as the crisis goes from bad to worse – if only because it is the currency of a unified and powerful nation with institutions that have been tested over time. It is not yet clear how well the eurozone's 16-strong bloc of disparate states will respond to extreme stress. The euro dived two cents to $1.26 against the dollar, threatening to break below a 24-year upward trend line.

Crucially, gold has decoupled from oil and base metals, finding once again its ancient role as a store of wealth in dangerous times. >>> By Ambrose Evans-Pritchard | Wednesday, February 18, 2009

SKY NEWS: Bank To 'Print Money' To Tackle Recession

The Bank of England could begin 'printing money' next month in a bid to tackle the recession.

Minutes of the Bank's Monetary Policy Committee (MPC) showed members were in agreement that more radical measures were needed to ward off deflation.

The committee voted 8-1 in favour of the half point rate reduction of the interest rate to an historic low of 1%.

The Bank of England does not actually print money when it moves to increase the amount of cash in the economy.

Instead it engages in a process known as quantitative easing, whereby it creates money to buy up Government securities - gilts - and private sector assets. >>> | Wednesday, February 18, 2009

THE NEW YORK TIMES: Fed Offers Bleak Economic Outlook

The Federal Reserve cut its economic outlook for 2009 on Wednesday and warned that the United States economy would face an “unusually gradual and prolonged” period of recovery as the country struggles to climb out of a deep global downturn.

In gloomy economic projections released by the central bank, the Fed’s Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would rise to 8.5 to 8.8 percent and that inflation would remain under greater pressure.

Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates “more than offset” any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook. >>> By Jack Healy | Wednesday, February 18, 2009

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Tuesday 17 February 2009

US Shares Dive on Doubts over Rescue Stimulus

TIMES ONLINE: US shares plunged by nearly 280 points in early trading today as investors grew nervous that President Obama’s financial stimulus plan will not be enough to boost the world's largest economy and carmakers may not be able to stave off collapse.

The Dow Jones industrial index plunged by 276.94 points to 7,573.47 points within half an hour of the US stock market opening — the first day of trading since Friday after being closed on Monday for Presidents Day.

At the same time, concerns over America's deepening recession, and the effect it may have on demand for energy, sent oil prices down more than $2 to $35.37 a barrel. >>> | Tuesday, February 17, 2009

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Sunday 15 February 2009

No Bonuses for Bankers Says David Cameron

David Cameron, the Conservative leader, has said that there should be no bonuses this year for senior staff at banks in which the Government holds a stake.


THE SUNDAY TELEGRAPH: He was speaking after The Sunday Telegraph disclosed that Lloyds Banking Group has drawn up plans to pay about £120 million in bonuses to staff even as it teeters on the brink of majority state ownership.

Sources close to Lloyds said the bank had drafted the bonus proposals and was "in consultation" about them with UK Financial Investments (UKFI), the Treasury body that owns a 43 per cent stake in the bank.

The revelations follow the disclosure last week that Royal Bank of Scotland, almost 70 per cent of which is owned by the taxpayer, was looking to pay staff as much as £1 billion in bonuses this year.

Mr Cameron said bonuses in future years should be paid in shares in the banks which can be cashed in only when it has entirely repaid the support it has received from the taxpayer.

He said he had no objection to bonuses of £1,000-£2,000 to low-ranking employees who have met targets and do not share the blame for the current financial crisis.

But the Tory leader told BBC1's The Politics Show: "For these banks that are owned by the taxpayer, or where the taxpayer has a large stake, it is completely wrong to be paying bonuses."

Mr Cameron said he raised the issue with Gordon Brown at the time of the banking bail-out in October, but the Prime Minister had been "asleep on the job". >>> By Duncan Gardham and Mark Kleinman | Sunday, February 15, 2009

THE SUNDAY TELEGRAPH: Gordon Brown Must Go, Says HBOS Whistleblower Paul Moore

Paul Moore, the bank whistleblower whose revelations forced the resignation of a senior Government adviser, has called for Prime Minister Gordon Brown to go for his part in creating the financial crisis.

Mr Moore, who was sacked after raising concerns over excessive risk-taking at HBOS, said Mr Brown should be "held accountable for his failure to oversee the stability of the country".

Following his explosive evidence to the Commons Treasury Committee last week, Mr Moore said he is planning to send the MPs a further dossier of 30 documents which will point the finger of blame for the bust at Mr Brown.

After Mr Moore's revelations forced the resignation of the deputy chairman of the Financial Services Authority Sir James Crosby, Mr Brown told another parliamentary committee that HBOS's massive losses - estimated at more than £10 billion - were caused not by Government policy but by the bank's flawed business model.

But Mr Moore, who was head of risk at HBOS from 2002 to 2005, today told the Independent on Sunday: "The failure goes right to the heart of the system - to the internal supervisory system and right to the top of government.

"Brown must go. He cannot remain in office. >>> | Sunday, February 15, 2009

THE SUNDAY TIMES: Ministers Take Tougher Line on Bank Bonuses

Ministers and the Opposition hardened their line against bank bonuses today amid suggestions that Lloyds intended to go ahead with payouts worth £120m this year.

Tony McNulty, Employment Minister, said that any bank employee who had responsibility for the disastrous business model adopted by the banks should "not get a penny". Junior staff should be able to get between £1,000 and £2,000, he said, but anyone with a significant involvement in the business model should be paid nothing extra at all. >>> Philip Webster, Political Editor, and Jenny Booth | Sunday, February 15, 2009

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Obama Warned over ‘Welfare Spendathon’

THE SUNDAY TIMES: The new administration's economic stimulus plan may undo reforms that cut the dole queues, critics say

RONALD REAGAN started it, Bill Clinton finished it and last week Barack Obama was accused of engineering its destruction. One of the few undisputed triumphs of American government of the past 20 years – the sweeping welfare reform programme that sent millions of dole claimants back to work – has been plunged into jeopardy by billions of dollars in state handouts included in the president’s controversial economic stimulus package.

As Obama celebrated Valentine’s Day yesterday with a return to his Chicago home for a private weekend with family and friends, his success in piloting a $785 billion (£546 billion) stimulus package through Congress was being overshadowed by warnings that an unprecedented increase in welfare spending would undermine two decades of bipartisan attempts to reduce dependency on government handouts.

Robert Rector, a prominent welfare researcher who was one of the architects of Clinton's 1996 reform bill, warned last week that Obama’s stimulus plan was a “welfare spendathon” that would amount to the largest one-year increase in government handouts in American history. >>> The Sunday Times | Sunday, February 15, 2009

THE SUNDAY TIMES: No Excuses if Obama Can't Fix 'His' Recession

If, like John Maynard Keynes, you believe that spending, any spending, will revive a flagging economy, the freshly minted, 1,000-page American Recovery and Reinvestment Act of 2009, calling for $504 billion in deficit-financed spending, is for you. Well, not quite. It seems that most of the money will not be spent very soon. About 30% won't hit the economy until 2011, and the balance is likely to be tied up in the procurement processes of the federal and state governments until well into 2010, and beyond. Besides, much of the spending will end up boosting other economies — subsidies for wind machines will benefit workers in the other countries in which such machines are manufactured, not our very own horny-handed toilers. And much of the spending will not create jobs for the unemployed: laid-off car workers do not have the skills to design the software to manage the "smart grid" that is the apple of the greens' eye.

If you have not jumped onto the new Keynesian spending bandwagon, but believe with Christina Romer, chairman of Barack Obama's Council of Economic Advisers, that tax cuts are more certain than spending to turn the economy round, you should love this bill, with its $286 billion in tax cuts and credits. Well, not quite. True, individuals earning less than $75,000 a year and families earning less than $150,000 will receive credits of $400 and $800, the earned income-tax credit for working families with three or more children is increased, and there is something for pensioners, disabled veterans, families of college students and a host of others.

Reflection suggests, however, the tax-cut contingent is doomed to disappointment. Much of the money will be saved or used to pay down credit-card balances, not bad things, but not very stimulative. Much will be spent in Wal-Mart, earning Congress the applause of Chinese trainer and t-shirt manufacturers. And much will never be claimed: the specific subsidies for college education are simply too small to have much effect on college enrolments. If you are a supply-side enthusiast… >>> Irwin Stelzer*

*Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute

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A Sorry Parade of Bankers Can't Put Things Right

The Government wrecked both our private and our public finances and if Gordon Brown doesn't get a better grip of the banking industry, the IMF will have to do it for him, says Michael Fallon.

‘We are profoundly and, I think I can say, unreservedly, sorry at the turn of events” was how the former chairman of HBOS put it. “I think I can say, unreservedly”? “The turn of events”? Only somebody as deeply immersed in the British establishment as Lord Stevenson of Coddenham could get away with destroying a great British bank, taking £17 billion of taxpayers’ money, and then offering up the kind of shaded apology more appropriate for somebody caught out by a sudden cold snap.

This won’t do, and the parade of hapless bankers in front of the Treasury Committee last week did not give us the answers we need to the crisis in British banking. Instead, we were shown a sorry picture of a sales-driven, deals-driven, bonus-driven culture wholly alien from the banks our fathers knew. >>> By Michael Fallon | Saturday, February 14, 2009

THE (SUNDAY) TELEGRAPH: Lloyds Plan to Pay £120 Million in Bonuses to Staff Threatens New 'Fat Cat' Row

Lloyds banking group has drawn up plans to pay about £120 million in bonuses to staff even as it teeters on the brink of majority state ownership, The Sunday Telegraph has learned.

Sources close to Lloyds said the bank had drafted the bonus proposals and was "in consultation" about them with UK Financial Investments (UKFI), the Treasury body that owns a 43 per cent stake in the bank.

The proposed payouts would be distributed among thousands of workers in Lloyds' retail and commercial banking businesses, who received about £150 million in bonus payments last year.

They are likely to inflame the growing row over City bonuses which was stoked last week by The Sunday Telegraph's disclosure that Royal Bank of Scotland, almost 70 per cent of which is owned by the taxpayer, was looking to pay staff as much as £1 billion in bonuses this year.

The disclosure comes as the Government and Lloyds attempt to find a way to pump billions more of taxpayers' money into the troubled bank without the Government being forced to take a majority stake. >>> By Mark Kleinman, Patrick Hennessy and Edmund Conway in Rome | Saturday, February 14, 2009

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Saturday 14 February 2009

L’Espagne en crise découvre un nouveau profil de pauvres

RÉCESSION | Présentée il y a peu encore comme un modèle, l’Espagne subit de plein fouet les effets de la crise financière, secteur du bâtiment en tête. La classe moyenne souffre.

Marta Villate a reçu son dernier chèque. Depuis trois ans, elle travaillait comme vendeuse dans une boutique de maroquinerie de la très commerçante rue Princesa, à Madrid. Il y a quelques jours, son employeur l’a prévenue que son contrat ne serait pas renouvelé. «Je m’y attendais, confie cette jeune femme de 29 ans. Depuis des mois, les clients se faisaient rares. On a attendu la fin des soldes pour voir si ça allait mieux, mais non.»

Ce qu’elle va faire? S’inscrire au chômage, quitter l’appartement qu’elle partage avec une amie, retourner chez ses parents et chercher un travail. «Si je ne trouve rien, j’en profiterai pour faire une formation, en attendant que les choses aillent mieux.» Elle s’estime heureuse de ne pas avoir de crédit immobilier sur les épaules.

Ils sont plus d’un million, comme elle, à avoir perdu leur emploi au cours de la dernière année en Espagne. La crise financière internationale et l’explosion de la bulle immobilière ont provoqué une brutale remontée du chômage passé de 8,5% à 14% en moins d’un an. Les perspectives de récession lourde ont refroidi le légendaire enthousiasme espagnol.

«La chute des prix de l’immobilier a provoqué une sensation générale d’appauvrissement, explique Gonzalo Garland, professeur d’économie, à l’IE business school de Madrid. Après avoir allègrement consommé durant des années, l’heure est à l’épargne et à la prudence.» >>> Cécile Thibaud | Samedi 14 Février 2009

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Friday 13 February 2009

European Finance Ministers to Attack Alistair Darling over Sterling's Slide

European finance ministers are planning to round on Alistair Darling and tell him to bring the pound back under control, in what many fear could represent the opening salvo of a "currency war".

French and German ministers are expected to confront the Chancellor over sterling's weakness at the opening dinner for the Group of Seven finance summit in Rome tonight. They will ask him to consider direct action to increase the value of the pound, which has suffered its worst devaluation since at least the final breakdown of the Bretton Woods agreement in the early 1970s.

It came as the pound dropped further against a range of currencies, following the Bank of England's unexpected acknowledgement earlier this week that it plans to start buying gilts imminently as part of its quantitative easing efforts. Sterling fell more than a cent against the dollar to $1.4248, although it did strengthen marginally against the euro. >>> By Edmund Conway, Economics Editor | Friday, February 13, 2009

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Wednesday 11 February 2009

The Scum of the Earth!

Eight Wall Street bankers were force fed large slices of humble pie on Capitol Hill as congressmen lined up to vent populist outrage over high living, lavish bonuses and gross incompetence on Wall Street.

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Photo of US bankers courtesy of The Telegraph

The heads of Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, JPMorgan Chase, Bank of New York Mellon and State Street all wisely took the train or drove to Washington rather than boarding private jets.

But that did not quell the demands for them to show the contrition expressed publicly by their British counterparts.

Barney Frank, chairman of the House of Representatives Financial Services Committee, addressed them and said: "I urge you strongly to cooperate," and respond to questions "not with mumbo jumbo but with reality".

The eight men behind the witness table did their best to placate him.

"It is abundantly clear that we are here amidst broad public anger at our industry," said Lloyd Blankfein, CEO of Goldman Sachs. "In my 26 years at Goldman Sachs, I have never seen a wider gulf between the financial services industry and the public." >>> By Toby Harnden in Washington | Wednesday, February 11, 2009

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RBS, Morgan Stanley and UBS to Axe 6,500 Jobs

Royal Bank of Scotland, Morgan Stanley and UBS are cutting more than 6,500 jobs in the latest blow to the ailing financial services industry.

RBS said it was in consultation with staff over plans to make 2,300 UK employees redundant. The cuts will affect about 2pc of UK staff.

Morgan Stanley kicked off its latest redundancy programme as part of a global restructuring that will see as many as 2,000 staff lose their jobs, hundreds of whom are likely to be UK based.

The majority of the RBS and Morgan Stanley redundancies are expected to come from back-office operations.

UBS said it would axe a further 2,200 jobs in its troubled investment bank. The Swiss institution expects staff numbers in the division to have shrunk to 15,000 by the end of this year, down from 26,000 in October 2007.

RBS, which claimed compulsory redundancies would be kept to a minimum, said the cuts would not affect customer-facing branch staff.

"It is essential that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the current economic circumstances," said Alan Dickinson, chief executive of RBS UK. >>> By Jonathan Sibun | Tuesday, February 10, 2009

TIMES ONLINE:
Unemployment hits 12-year high of 1.97m >>> Grainne Gilmore | Wednesday, February 11, 2009

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Tuesday 10 February 2009

Spending Money Like There’s No Tomorrow! Obama, the Two Trillion Dollar Man!

US Treasury Secretary Tim Geithner has admitted America’s original bank bail-out was “inadequate”, as he set out a revamped plan to provide more than $2 trillion to stabilise ailing financial institutions and revive lending.

Mr Geithner, who as the former president of the Federal Reserve Bank of New York was instrumental in devising the previous $700bn bail-out, admitted that the “force of government support” in the Autumn failed to prevent the “deepening pressure brought on by the financial crisis.”

Admitting public distrust in the first bail-out, led by his predecessor as Treasury Secretary, Hank Paulson, Mr Geithner admitted that today's “comprehensive strategy will cost money, involve risk, and take time.”

Today's plan comes a day after President Barack Obama used his first White House press conference to tell Americans that passing his massive economic stimulus bill would mean the difference between "catastrophe" and saving or creating "up to four million jobs."

US stock markets markets responded badly to the plan, with the Dow Jones Industrial Average extending losses to more than 3pc in early trading.

In place of October's plan, which simply injected capital into major US banks and hoped for the best, Mr Geithner unveiled a three-prong programme which he hopes will “use taxpayers’ money in ways that will benefit them.”

The programme will be known as the “Financial Stability Plan” – ditching the TARP (Troubled Assets Relief Programme) moniker – and Mr Geithner said that it would be monitored closely and reviewed regularly to ensure it is working. >>> By James Quinn, Wall Street Correspondent | Tuesday, February 10, 2009

TIMES ONLINE: Let’s Not Penny-pinch, for God’s Sake. What’s a Trillion between Friends?

The Obama Administration laid out plans yesterday to marshal an extraordinary $3 trillion to stabilise America's stricken banking sector and revive its collapsing economy. US shares dropped sharply despite an unprecedented few hours of emergency government action.

First, President Obama's Treasury Secretary unveiled a sweeping new rescue plan for the US banking system that could amount to at least $2 trillion. It involves a combination of taxpayers' and private money to help to free up the country's frozen credit markets and to save the financial sector from collapse.

Timothy Geithner's appearance unsettled Wall Street mainly because business leaders were concerned about the lack of detail in his plan. Two hours later an entirely separate plan - Mr Obama's $838 billion economic stimulus package aimed at creating jobs and reviving the economy - was narrowly passed by the US Senate, but in the face of almost unanimous Republican opposition. Needing 60 votes to avoid blocking tactics, the Bill attracted 61, with only three moderate Republicans backing it.

When Mr Obama was told of the Bill's passage during a rally in Fort Myers, Florida, he said: “That's good news. It's a good start.” Yet Mr Obama set himself tough benchmarks - as he did at a prime-time news conference on Monday night, part of a campaign to sell the stimulus package to the US public - in essence conceding that his presidency would succeed or fail on his ability to turn the economy around. He pledged that his stimulus plan would create or save three to four million jobs within two years. “If people don't think I've led the country in the right direction, you'll have a new president.” Barack Obama Team Rolls Out $3 trillion Plan to Save Economy >>> Tim Reid in Washington | Wednesday, February 11, 2009

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Western Companies Seen Eyeing Islamic Bonds

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REUTERS: LONDON/MANAMA - Cash-strapped Western companies are considering issuing Islamic bonds to tap Middle Eastern investors but face a challenge in choosing the right instrument, bankers and asset managers said.

Companies, especially in the UK and France, are looking to Islamic compliant investors as alternative sources of finance as the global crisis restricts their usual funding routes.

"There is a lot of interest from corporates to issue sukuk. My feeling is that as liquidity in the West gets scarce, they will look into the Middle East," said London-based Adnan Aziz, head of sharia advisory and structuring at asset manager BMB Group.

British retailer Tesco (TSCO.L) issued its first sukuk -- or Islamic-compliant debt --in 2007 for its Malaysian unit as well as raising conventional debt.

Islamic bonds do not pay interest, which is banned under Islamic law or Sharia, and are structured as profit-sharing or rental agreements, underpinned by physical assets such as real estate or commodities.

"We have discussions with clients, conventional issuers in Europe and we pitch both solutions, (bonds and sukuk) that is going to be a trend going forward," said Vikrant Bhansalim, who works for French bank Societe Generale (SOGN.PA) in London.

"In today's world the corporate sector is interested in the right price, the format is not as important," he said. >>> Reuters | Tuesday, February 10, 2009

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REUTERS:
Indonesia Reports Strong Demand for First Retail Sukuk >>> Reuters | Tuesday, February 10, 2009

SMART BRIEF: Report Details Growth of U.K.'s Islamic Finance Sector

A report by International Financial Services London found that the Islamic finance sector in Britain, with $18 billion in assets, is much larger than that of Pakistan, Turkey, Egypt and Bangladesh, countries where Islam is the primary religion. The report also states that the U.K. leads Western countries in the number of financial institutions focused on Muslims and sharia-compliant products. >>> The Telegraph | Tuesday, February 10, 2009

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People Have Been Shot for Less Than This! Witness Nicolae Ceauşescu

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Photo of Alistair Darling courtesy of The Telegraph

Alistair Darling, the Chancellor, has called for a change in the banking culture to stop executives being paid massive bonuses while presiding over failure.

Speaking as he announced an inquiry into banking bonuses, Mr Darling revealed that he had held talks with the Royal Bank of Scotland, which has received a £20 billion taxpayer bailout, to urge chiefs there to reconsider plans to pay out £1 billion to staff.

Meanwhile, George Osborne, the shadow chancellor, said that the banking industry should be told that "the party is over".

The Chancellor stressed that while incentive schemes may be appropriate in some circumstances, bonuses should only be paid in exceptional circumstances, to reward success rather than failure.

And he insisted that bankers responsible for the near-collapse of the financial system last autumn should not receive a bonus. Alistair Darling Urges Banks to Withhold Bonuses Amid Consumer Fury >>> By Rosa Prince, Political Correspondent | Sunday, February 8, 2009

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Abschied von Steuerprivilegien: Für Millionäre wird die Schweiz jetzt teurer

Der Kanton Zürich schafft die Steuerprivilegien für reiche Ausländer ab. Vermögende Ausländer, die in der Schweiz nicht arbeiten, mussten bisher nur die Höhe ihres Aufwandes, etwa für Instandhaltung oder ihrer Villa, besteuern. Jetzt müssen sie wie jeder Schweizer besteuert werden.

Ausländische Superreiche wie der russische Milliardär Viktor Vekselberg, der deutsche Milchbaron Theo Müller und die US-Sängerin Tina Turner genießen im Kanton Zürich künftig keine Steuerprivilegien mehr. Die Zürcher stimmten am Sonntag bei einer Abstimmung überraschend für eine Volksinitiative zur Abschaffung der sogenannten Pauschalbesteuerung. Die Aufhebung betrifft nur die Kantons- und Gemeindesteuern, nicht aber die direkte Bundessteuer. Für den Beschluss stimmten 52,9 Prozent. Zürich stimmte als erster Kanton über die Pauschalbesteuerung ab.

Die Steuer gilt bisher für etwa 150 Millionäre und Milliardäre, die im Kanton wohnen, in der Schweiz aber offiziell keiner Erwerbstätigkeit nachgehen. Sie werden bisher nicht wie normale Steuerzahler auf der Basis ihres Einkommens und Vermögens besteuert. Vielmehr wurden ihre pauschal erfassten Lebenshaltungskosten in der Schweiz für die Steuerberechnung herangezogen. Sie zahlten der amtlichen Statistik zufolge pro Jahr im Durchschnitt etwa 100.000 Euro Steuern, während reiche Schweizer wie etwa die Chefs der Großbanken dem Fiskus Millionen abliefern müssen. >>> Reuters/dpa/AP/heg | Sonntag, 8. Februar 2009

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Sunday 8 February 2009

Obama Is Setting Himself and the West Up for Complete Failure!

All you need in this life is ignorance and confidence; then success is sure. – Mark Twain, Letter to Mrs Foote, Dec. 2, 1887

The West faces two great challenges today: The survival of capitalism, an economic system which has brought prosperity to the masses; and the survival of Judeo-Christianity, a religious system which has brought civilization to us all. Without both, we would be very much more impoverished today, and we probably would still be living in a state of benightedness. Alas, because of recent failures in the economic system, our commitment to capitalism is appearing weak and shaky, and because of the Jihad being waged against a weakened West, our commitment to Judeo-Christianity is appearing weak and shaky, too.

We need to renew our commitment to both the economic system and to the underpinnings of our civilization, but to do that, we need good, strong leadership, and leadership from people who are equally committed to both capitalism and Judeo-Christianity. Sadly, such commitment is nowhere to be found.

In order to surmount these two great challenges we are now facing, we need crystal clear thinking and total commitment to the purpose. To-date, there is evidence of neither crystal clear thinking nor commitment to the civilization which is the keystone of our freedoms and way of life.

President Obama was swept to power in the belief that his administration would usher in a new dawn. He came to power on a promise of hope and change, though before the election, he omitted to explain to the electors what that “hope” stood for, and what that “change” would mean for Americans and for the world.

Obama’s confidence was so great that he promised us all that after his administration, the world would be a very different place. The “audacity of hope” indeed. One could also add the audacity of an upstart!

We all know that Obama wishes to stimulate the American economy by spend, spend, spending. The stimulus package worth $825bn shows Obama’s commitment to spending other people’s money: Taxpayers’ money! For as we all know, governments do not have any money; they have only other people’s.

This stimulus package is being hailed as some kind of stroke of Obama genius, whereas, in actual fact, it is old hat. He is only proposing what socialists have proposed down over the ages: To tax and spend. The only thing that is possibly new about Obama’s proposal is the scale of the stimulus package.

Spending money on roads and other infrastructure is all well and good, and doubtless there are many areas in America which need road-renewal programmes, and badly; but such spending will take a very long time to have an effect on the American economy. The lead-in times are going to be long; these projects are not going to have the immediate effects that Obama will surely be hoping for.

Further, spending public money on this vast scale is a sure recipe for corruption. Contractors, and many others, will be able to dip their hands into the overflowing pots of gold, and help themselves. If Obama thinks he can develop a system that will prevent this from happening, then he is naïver than even I thought.

Then there is the problem which spending public money on such a grand scale will bring with it: It will bring impoverishment to future generations, since future generations will be burdened with the massive debt which today’s generation is in the process of getting itself into.

Government intervention is now the order of the day, and on both sides of the Atlantic. But for government intervention, you can read socialism. For that is the path we are now going down. Wherever and whenever governments get involved in private businesses and corporations, their intervention and the ensuing government regulations end up crippling business communities and stifling initiative.

There is no doubt that we have got into this dire economic situation because of greed; and that greed was born in the complete and utter deregulation of the Reagan and Thatcher years. But what they did was not wrong at all, for their policies proved to be vote-winning, and they led to prosperity. The problems arose not because of the Reaganite and Thatcherite policies themselves, but because they were allowed, over the years long after both leaders had left power, to go on and on, unchecked.

So now, instead of following Friedmanite principles, principles which have been proved to work, we are in the process of throwing out capitalist principles: We are throwing the baby out with the bathwater, so to speak. And, as a consequence, we are being taken down the socialist route, taken down the road which leads to higher and higher taxes, increasing government interference, and stifled initiative. It is a road which leads to no paradise! Of that, be sure!

Of course, the excesses of many, especially bankers and their ilk, need to be curbed. It makes absolutely no sense to allow such people to keep paying themselves vulgar and enormous bonuses, especially when many others are experiencing difficulty in feeding their families. But that is an argument for strong government to put a stop to the worst excesses of the capitalist system; it is not an argument for abandoning the system altogether.

We need to reaffirm our commitment to the system by making it possible for people to start up businesses. This can be done with substantial tax breaks and, where necessary, government loans, subsidies, and grants. Unburden the people of their onerous taxation! Set the people free! Let them work and keep the fruits of their labours! Encourage manufacturing! Encourage initiative! Bring out the best in America!

In my judgement, the way Obama is going about correcting the economy, when Obama will no longer be the president of the USA, others will be left to pick up the pieces and pay the high taxes which he will surely introduce, since there is no other way to finance such an ambitious stimulus package. In short, President Obama shows no commitment to capitalism; on the contrary, his way of government is based on the socialist model.

But what is equally worrying, perhaps more worrying still, is Obama’s lack of commitment to Judeo-Christian civilization. In matters of faith, his vision is blurred to say the least. This is probably due to the nature of his family background.

This man is in grave danger of fudging the issues. Oh, sure he talks a good line. His tongue may well be said to be golden. But listen to what he says – carefully. Then you will be able to dissect the character, and see what he truly stands for. He kept those things well hidden from the people before he was elected, but that is going to be very much more difficult for him from now on. His mask is already beginning to slip.

Only yesterday, in a National Prayer Breakfast at the Washington Hilton, Obama spoke in a manner which was more redolent of a preacher than a politician. (That is worrying in itself.) It is well worth taking the time to hear what he had to say. You will find that he is not committed to Judeo-Christianity, and further, he has what can best be described as a view of the world which would do Pollyanna much justice!

Obama stated that “faith should not divide us”. Yes, Obama, in an ideal world, faith should indeed not divide us; but in the real world it truly does. And most definitely. It is in the real world that we have to live; and we have to deal with the challenges the real world kicks up for us. One of these challenges is precisely that faith does divide us. It is especially true to say that the faith of Islam is diametrically-opposed to the faiths of Judaism and Christianity. No sweet words from you, Mr President, will change this fact.

Further, Obama stated in the ‘National Prayer Breakfast’ that there is no religion whose central “tenant’ [sic] is hate. Well that’s where Obama is wrong again. Islam does have hate programmed into the faith. It is a tenet of that faith. A Muslim is to love only his brother or sister in Islam. He is not to love a Christian; and as we can see on a day-to-day basis, he is certainly not to love a Jew. Hence the basis for all the anti-Semitism we find in Islam since its birth.

Then there was the point he raised about the hadith, which states that “none of you [Muslims] truly believes unless you wish for your brothers what you wish for yourself”. Surely Obama cannot be this naïve! He must surely understand that this hadith relates to a Muslim’s brother in Islam – and to nobody else!

Then he spoke of the ‘Golden Rule’, which, he says, all religions have. The ‘Golden Rule’ of course is that we should do unto others as we would have them do unto us. As the son of a Muslim father, Obama should know that Islam does not have the concept of the ‘Golden Rule’. It is singularly absent in that faith.

From his speech at the ‘National Prayer Breakfast’, we learnt more about Obama’s understanding of faith than we have ever learnt before. My understanding of his understanding is this: His father was a Muslim who turned to atheism. His mother was suspicious of all organized religions. His grandparents were non-practising Methodists and Baptists; and Obama himself joined the Trinity United Church of Jesus Christ in Chicago, under the leadership of Rev Jeremiah Wright Jr. This is a concoction of faith which cannot possibly lead to clarity of thought, still less to commitment to Judeo-Christianity.

The following has been said about the Church Obama attended in Chicago:
Jesus is black. Merging Marxism with Christian Gospel may show the way to a better tomorrow. The white church in America is the Antichrist because it supported slavery and segregation.

Those are some of the more provocative doctrines that animate the theology at the core of Trinity United Church of Christ in Chicago, Barack Obama's church.



[Rev. Jeremiah A.] Wright [Jr.] has said that a basis for Trinity's philosophies is the work of James Cone, who founded the modern black liberation theology movement out of the civil rights struggles of the 1960s. Particularly influential was Cone's seminal 1969 book, "Black Theology & Black Power."

Cone wrote that the United States was a white racist nation and the white church was the Antichrist for having supported slavery and segregation.

Today, Cone, a professor at Union Theological Seminary in New York, stands by that view, but also makes clear that he doesn't believe that whites individually are the Antichrist.

In an interview, Cone said that when he was asked which church most embodied his message, "I would point to that church (Trinity) first." – Source
This says a lot about Obama. So where is Obama’s commitment to Judeo-Christian civilization? As he stated in the prayer meeting, his administration will not favour any one religious group over another. And herein lies the rub. How can we win a war against an implacable enemy, an enemy which is so committed to its own religion and ‘civilization’ that it will stop at nothing to win, stop at nothing to bring us down, when we ourselves are not committed to ours?

It would appear that Obama’s thinking on religion is as fudged as is his thinking on economics. He may well have been educated in Harvard; but so far, it doesn’t show.

What is needed at this very important stage in the development of the Western world is a renewed commitment to the principles which underpin our civilization, and a commitment, too, to the economic system which has brought us all so much. Capitalism has brought us material wealth unparalleled and unheard of in parts of the world following different economic models; and Judeo-Christianity has brought us civilized behaviour and unparalleled achievements in the sciences, in the arts, in education, in medicine, and in a wealth of other areas besides, such as human rights. Islam cannot compare in matters of achievement, no more than it can compare in matters of freedom, human rights, or in any other field of human endeavour. Yet we in the West find ourselves bereft of the very leaders we need to guide us forwards and upwards. There are many mountains to climb, many achievements still to be attained. Yet we find ourselves doubting the very validity of the founding principles of our economic system and our superior civilization.

Given such deep-seated doubts, it is hard to see how we can come out of all these tribulations unscathed. We are in danger of losing the best economic system ever devised by man, losing the best political system – democracy – ever conceived in the minds of man, however flawed it may be, and we are in danger of losing our civilization, for lack of knowledge, lack of clear thought, lack of courage, lack of commitment, and lack of foresight.

We need to move forward with confidence in both areas: We need confidence in capitalism, whilst at the same time correcting its excesses; and we need to thwart the advance of the enemy. And that enemy is Islam. Of that, be sure. It is not some bastardized version of the faith; it is the very faith itself. Islam and democracy are immiscible, and the capitalist system is incompatible with Islam too, committed as the latter is to Islamic economics and Shari’ah finance. This system of economics is not what the West was built on; but greed here, too, is guiding us up the garden path, since there is money to be made aplenty in Shari’ah finance.

The Jihad is being waged against the West for one purpose, and one purpose only; and that purpose is to supplant our civilization with an Islamic one – if civilization it may indeed be called; and the next purpose is to supplant our economic model of capitalism with a model based on Islamic economics and finance.

Obama, with all his smooth talk and sweet words, will not change these facts. He may be able to hoodwink his own people, but he will not hoodwink the Jihadis who are fighting us. Obama wants to reach out to the Islamic world, but what he should be doing is keeping the Islamic world at bay. He wants to “win hearts and minds” in the Muslim world, too. But that will be to no avail. It is a corny term, and it will surely be a fruitless exercise. A complete and utter waste of time, since the people who are fighting the Jihad on behalf of Islam are hardly the kind of people whose hearts and minds can be won!

Mark Twain’s quotation about ignorance and confidence leading to sure success is very pertinent here, for Obama certainly is displaying ignorance of both economics and Islam, and at very least he is displaying his naïveté. His ignorance was kept well under wraps in the lead up to his election, but his confidence was present in abundance. Both have brought him success in his bid to become the first black president; but it is doubtful – very doubtful – that this will be the winning formula, the winning combination in putting capitalism back together again, for capitalism, at the moment, rather resembles Humpty-Dumpty, whilst Judeo-Christianity resembles a boat without a rudder, and one on the high seas at that! One can have only skepticism of Obama’s recipe for correcting the ailing economy; for his recipe in dealing with the Islamic world, one can have only fear – fear of abject failure!

©Mark Alexander

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