”Let Them Eat Sand”
As I have been saying all along, the Saudis need us every bit as much as we need their oil. It’s high time to remind them of this fact. Remember this: Arabs respect strong people, not wimps. By behaving in a weak manner with Arabs, you get nowhere. They’ll walk all over you. Our political leaders do just that: Behave in a weak manner, and fawn. Quit it!- ©Mark

Photo of George W Bush with Prince Salman of Saudi Arabia, the king’s brother, courtesy of The Telegraph
THE TELEGRAPH: When President George Bush went to see Saudi Arabia's King Abdullah in January to plead for higher oil output, he was politely rebuffed.

The rematch today is likely to be a great deal more strained.

If the Saudis deny help once again, they risk incalculable damage to their strategic alliance with Washington. The price of crude has rocketed by over $30 a barrel since that last fruitless meeting, briefly touching the once unthinkable level of $127.

Goldman Sachs fears a "super-spike" to $200 a barrel this year.

Asked what he would tell King Abdullah this time, Mr Bush said caustically: "the price is even higher."

Indeed, it is, especially the political price.

The US-Saudi tango has been on thin ice ever since the terrorist attacks of 9/11. Sixteen of the hijackers were Saudi nationals.

The Bush family has cleaved closely to the Saudi monarchy, but strong factions in Washington see Riyadh's Wahabi monarchy as part of the Mid-East problem-- not the solution.

Saudi Arabia's one saving grace -- in the eyes of US critics -- is that it has over the years been willing to cap extreme surges in the price of oil, deploying its power as the world's swing producer. This time Riyadh is giving no ground.

Oil minister Ali al-Naimi insists that there is plenty of oil about, blaming the latest spike on "the internal logic of the financial markets”, meaning hedge funds and speculators. The US Congress gave its riposte this week.

New York Senator Charles Schumer is pushing for sanctions against Saudi Arabia, targeting $1.4bn in sales of bomb kits, light armoured vehicles, as well as gear for AWACS aircraft and F-15 fighters.

"You need our arms, but we need you to cooperate and not strangle American consumers.

"Saudi Arabia could do a lot more than they have done," he said.

The Democrats are also pushing legislation that would penalize the OPEC producers cartel for "anti-competitiveness practices".

The Bush White House has rolled its eyes in exasperation at such blunt methods, but hot feelings are aroused in American public discourse.

There have been calls for a food blockade of the Arabian peninsular on the US talk radio circuit. "Let them eat sand", has been the rallying cry of the shock-jocks. OPEC has -- in effect -- cut production repeatedly. US-Saudi Oil Axis Faces Day of Truth >>> By Ambrose Evans-Pritchard | May 16, 2008

THE TELEGRAPH:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/07/cnoil107.xml>Oil Could Hit $200 in 'Super-Spike' >>> By Ambrose Evans-Pritchard | May 10, 2008

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Recession Danger Is Real, Warns Mervyn King

THE TELEGRAPH: The British economy faces the real risk of falling into recession, the Governor of the Bank of England has admitted.

Mervyn King warned families to brace themselves for a further "squeeze" on household finances as rising energy bills and food prices continue to rise.

Mr King said that inflation was set to increase sharply to about 3.7 per cent - almost double the official target. As a result most British people will feel poorer this year as pay rises fail to keep pace with rising costs.

The Governor - who said that "the nice decade is behind us" - also warned homeowners that property prices would fall further and that it was impossible to predict the scale of the decline.

He became the first senior public figure to openly discuss the possibility that the British economy may now be heading for recession. The economy was "travelling along a bumpy road" and that a sharp downturn could not be ruled out, he said. Recession Danger Is Real, Warns Mervyn King >>> By Robert Winnett | May 15, 2008

THE TELEGRAPH:
Financial Crisis: Labour's History Is Repeating >>> By Edmund Conway | May 15, 2008

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Brussels Plans Crackdown on Car Advertising
SPIEGELONLINE INTERNATIONAL: The European Union bureaucracy is on a roll: After imposing restrictions on how tobacco, alcohol and food products can be advertised, it has set its sights on gas-guzzling cars. But German manufacturers and media conglomerates warn the financial impact could be devastating.

Only a select few VIPs are allowed to park on the paved lot directly next to the entrance to the enormous Berlaymont building in Brussels, the headquarters of the European Commission. The luxury sedans lined up in the parking lot include Audis, BMWs, Jaguars and Mercedes. The chauffeurs keep the engines running in the winter to stay warm, and in the summer to keep their energy-consuming air-conditioning systems going.

The contents of the Berlaymont's parking lot are especially impressive on Wednesdays, when European Commission President José Manuel Barroso and the 26 European Union commissioners gather around the conference table on the 14th floor. They often discuss climate protection, and what ought to be done to promote it.

To buck the trend, Commissioner for the Environment Stavros Dimas has chosen a Japanese hybrid (more...) known for its low emissions as his official vehicle. His position apparently makes this practically a requirement, but he's the exception rather than the rule. His fellow commissioners see no reason to revise their automotive preferences. "We commissioners travel a lot," says one of them, "and we need large, comfortable and fast cars."

Though clearly a topic that they have no serious interest in pursuing when it comes to their own luxury sedans, the commissioners are poised to tackle the issue in a way that will affect everyone else in Europe. Europe's lawmakers want to restrict and regulate automobile advertising. Their hope is that most drivers will lose interest in large cars and finally turn to more frugal models. Brussels Plans Crackdown on Car Advertising >>> By Hans-Jürgen Schlamp in Brussels | May 15, 2008

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Fat Cats Look Out! Europe Wants to Slim You Down!
Angela Merkel has called for a crackdown on the 'fat cat' abuses after Porsche chief pocketed €60m last year. Photo courtesy of The Telegraph
THE TELEGRAPH: A group of key EU finance ministers will today launch an assault on the rewards earned by bankers and top managers in a move that poses a potential threat to the City of London.

A confidential document prepared for the gathering in Brussels finds the "short-term" pay structure of modern capitalism has become deformed, causing firms to take on "excessive risk" without regard to the interests of stakeholders or society.

While there is no concrete legislation on the table, ministers are eyeing curbs on stock options, bonuses and golden parachutes.

The move is a clear sign that the EU noose is tightening on bankers, funds and corporate elites that have enjoyed light-touch regulation.

Today's meeting is being held under the auspices of the Eurogroup, the quasi-official club of eurozone finance ministers. The forum excludes Britain and free market allies from Eastern Europe.

Shutting out Chancellor Alistair Darling enables Berlin and Paris to create a head of steam behind possible legislation that could undermine London's competitiveness as the world's leading financial centre.

The text for the meeting - leaked to Spanish newspaper El Pais - indicts the Anglo-Saxon market model as a danger to global financial stability and castigates firms for chasing "immediate profits at the cost of massive sackings".

The loose plans are part of a slew of proposals floated in Europe over recent months aimed at disciplining the market. Ideas have included a pan-European regulator, curbs on private equity and restraints on sovereign wealth funds. None has yet crystalised into a draft EU directive.

EU governments are paying close attention to a law going to the Dutch parliament this month. It imposes a 30pc supertax on pay packages above €500,000 (£398,000) and limits bonuses and stock options to 100pc of pay - far below the windfalls made by UK-based traders and bankers at the height of the credit bubble. EU to Launch Assault on Bankers' Bonuses >>> By Ambrose Evans-Pritchard, International Business Editor | May 13, 2008

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"Neuer schnell wachsender Markt"
ISLAMISCHE ZEITING: (iz) So genannte „scharia-konforme“ Hotels wachsen im gesamten Nahen Osten und anderswo wie Pilze aus dem Boden, verstärkt durch einen Anstieg der Zahl arabischer Touristen. Die Entwickler dieser Hotels glauben, dass sie sowohl Muslime als auch Nichtmuslime ansprechen werden, da sie eine kulturell einmalige und entspannende Atmosphäre für Reisende bieten. Die Nachfrage nach scharia-konformen Unterkünften sei im Anstieg begriffen und stelle bereits jetzt etwa 10 Prozent des weltweiten Tourismus-Marktes, sagt Abdulla Almulla, Chairman der in Dubai ansässigen Almulla Hospitality. Während einer Rede auf der Arabian Investment Conference sagte Almulla, dass seine Firma plane, bis zum Jahr 2015 eine internationale Kette von 150 scharia-konformen Hotels aufgebaut zu haben, von denen rund 90 im Nahen und Mittleren Osten und Nordafrika gelegen sein sollen. "Neuer schnell wachsender Markt": "Scharia-konforme" Hotelketten - nicht nur für Muslime interessant >>>

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Turning towards Mecca
THE ECONOMIST: CHINA is not the only financial powerhouse with its hungry eye on Africa. Flush with oil wealth, the Gulf states, too, are spying profitable opportunities among the hundreds of millions of Muslims who live just a hop across the Red Sea. Africa's economies are growing fast, thanks in large part to the commodities boom. Although many people on the continent do not have a bank account, the banking systems in some countries are growing increasingly sophisticated. Bankers from the Gulf hope that the middle class, particularly in the Muslim north, will turn to Islamic finance, and that firms will raise money through Islamic bonds, known as sukuk. Moody's, a credit-rating agency, reckons that although Islamic finance was worth a puny $18 billion at the end of last year, its potential is close to $235 billion—about half what it estimates as the GDP of Africa's Muslim population.

So far, forays from the Gulf into Africa have been limited to a few countries. Sudan—where only sharia-compliant finance is allowed in the north—dominates, holding over half of Africa's Islamic-banking assets. A number of Gulf banks, familiar with the country's language and oil resources, have joined forces with Sudanese investors to open Islamic banks. Last year the first sukuk from Africa was issued by a Sudanese cement firm. Reportedly, the government also tapped the market in January—selling bonds to Gulf investors to sidestep American economic sanctions over the massacres in Darfur.

But Sudan's banking industry remains embryonic and few African countries combine the strong desire to promote Islamic banking with heavy demand from Muslim customers. “Islamic banking is a luxury product,” admits Anouar Hassoune of Moody's: it tends to do better in places with established banking systems, such as South Africa and Kenya. South Africa's only Islamic bank, Albaraka, was set up in 1989. Last year the Kenyan authorities licensed two Islamic banks, Gulf African Bank and First Community Bank, both backed by Gulf investment.

Western banks are also dipping their toes in. In Kenya Barclays was the first to offer an Islamic bank account appropriately named La Riba, meaning “no interest”. South Africa's ABSA opened an Islamic banking division in 2006. It offers phone, internet and branch banking. Its head, Ahmed Moola, says the division was profitable last year, though he declines to discuss numbers. Turning towards Mecca: Islamic banks join the race for Africa >>> |May 8, 2008

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Mecca,

Celebrating 10 Years of the Euro
Photo of euros courtesy of Google Images
BBC: When the euro was launched there were plenty of people who thought it would crash and burn.

Ten years on, its role as a global currency is secure, even if it hasn't achieved everything its founders hoped.

Wednesday is the 10th anniversary of the agreement that launched the single currency.

However, residents of the first 12 EU states that adopted the euro didn't begin using euro banknotes and coins until 1 January, 2002.

Things didn't start out so well.

The euro spent its early life hitting record lows against the dollar - but now it is the greenback that's falling.

Tourists and exporters in the eurozone have to cope with the euro at a record high. Many in Europe are now bracing themselves for the effects of the slowdown in America.

Stronger position

But as the European Commission is keen to remind us, for once the eurozone economies are coming into this credit crunch from a position of relative strength.

About 16 million jobs have been created in the eurozone since the birth of the euro, and unemployment has fallen, from 9% in 1999 to 7% in 2007.

In contrast to the UK, most governments also have room to cut taxes to boost growth if they need to: the average budget deficit in the eurozone countries last year fell to record low of 0.6% of GDP. Celebrating 10 Years of the Euro? >>> By Stephanie Flanders, economics editor, BBC news | May 7, 2008

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Inflation in Kuwait a National Challenge
AFP: KUWAIT CITY — Central Bank governor Sheikh Salem Abdulaziz al-Sabah warned on Wednesday that oil-rich Kuwait was faced with a "national challenge" after inflation hit 9.5 percent in January.

Sheikh Salem called for "coordination in various national economic policies to curb rising inflation," in a statement carried by the official KUNA news agency.

"Inflation constitutes a national challenge and was the result of local and foreign factors," he said.

The government Central Statistic Office said last month that the consumer price index in January hit 126.4 points, compared to 115.4 points a year ago, because of a sharp increase in housing services and the price of food.

The cost of housing services rose 16.1 percent in January compared to a year ago, while the price of beverages and tobacco rose 15.1 percent during the same period.

Medical care and education rose by 12 percent, household services 10 percent and foodstuffs by 7.7 percent.

The governor said inflation in Kuwait remained at around 1.1 percent between 2000 and 2004, and jumped to 4.1 percent in 2005 and to an annual average of 5.5 last year.

However, monthly inflation rates began rising rapidly since July last year. High Inflation in Kuwait a National Challenge: Governor >>>

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Western Banks Rush to Fill the Demand for Islamic Banking and Finance

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

This Video Shows How Islamic Economics Is in Direct Competition with Capitalism. It Will Eventually Bring the System Down!

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Islamic Banks ‘Are Making Their Mark’
GULF DAILY NEWS: MANAMA: A new report from a global strategic management consulting firm shows that Islamic banks are making their mark in non-Muslim countries.

The AT Kearney study reveals that these wholesale banks target a broad set of corporate, institutional and high net worth clients, both Muslims and non-Muslims.

While Sharia-compliant banking has traditionally focused on the GCC and Malaysia, there has recently been a dramatic increase in the number of Islamic banks outside the core markets, most remarkably in the UK, where the number of Islamic banks has more than doubled over the past 12 months.

At the same time, their products remain popular in their core markets, where Islamic banks consistently outgrow their conventional competitors.

"While Islamic banks in their core markets take a universal banking approach, with retail, corporate and investment banking business lines, they focus on wholesale banking in the UK," said AT Kearney Middle East manager of financial services Dr Alexander von Pock.

Assets in the Islamic banking sector grew to over $250 billion globally in 2006, according to the UK Treasury. Islamic Banks ‘Are Making [Their] Mark’ >>>

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Oil Could Reach $200 a Barrel
BBC: The price of crude oil could soar to $200 a barrel in as little as six months, as supply continues to struggle to meet demand, a report has warned.

With benchmark US light crude passing the $122 mark for the first time on Tuesday, the warning comes from Goldman Sachs energy strategist Argun Murti.

Surging demand was increasingly likely to create a "super-spike" past $200 in six months to two years' time, he said.

Oil prices have now risen 25% in the last four months and by 400% from 2001.

Mr Murti correctly predicted three years ago - when oil was about $55 a barrel - that it would pass $100, which it reached for the first time in January of this year. Oil Price ‘May Hit $200 a Barrel’ >>>

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A Muslim's Viewpoint: Bilal Philips - Interest and Islamic Banking

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New Head of Islamic Banking Unit Appointed by Citigroup
HOT FINANCIAL NEWS!: Citigroup steps up its Islamic banking operations. It has appointed the former head of its Middle East debt capital markets group as its chief executive of business.

Samad Sirohey has become the head of Citi Islamic investment bank and the head of global investment banking.

Investment banks are redeploying much of their top talent to the Middle East, hoping to secure revenues from one of the fastest-growing regions in the world at a time when their more established businesses are struggling because of the credit crisis.

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Riyazi Farook: Islamic Banking and Finance

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Le pétrole dépasse les 120 dollars
Photo grâce aux Google Images
LE FIGARO: Les prix de l'or noir se sont de nouveau affolés lundi après de nouveaux sabotages sur des installations pétrolières au Nigeria.

Le baril de «light sweet crude», côté à New York, a dépassé pour la première fois de son histoire les 120 dollars, atteignant un niveau record à 120,36 dollars vers 17H20 GMT, ce qui constitue un gain de 4,04 dollars par rapport à son niveau de clôture de vendredi.

Des statistiques américaines encourageantes et les conflits géopolitiques sont à l'origine de ce mouvement haussier. Lundi, des militants du Mouvement pour l'émancipation du delta du Niger (MEND) ont attaqué des installations pétrolières appartenant au groupe anglo-néerlandais Shell dans le sud du Nigeria. Or le Nigeria est le premier producteur africain d'or noir. «Quelques oléoducs ont été touchés et un peu de pétrole s'est répandu dans l'environnement», a déclaré à l'AFP un porte-parole de Shell, Precious Okolobo, soulignant que la société avait mobilisé ses employés pour nettoyer les dégâts.

«Nous avons également fermé certains volumes de production», a-t-il ajouté sans autres précisions, or le marché est sensible à la moindre variation en terme d'approvisionnement, d'autant plus que l'équilibre entre offre et demande reste, toujours aux yeux du marché, particulièrement fragile. Le pétrole dépasse les 120 dollars >>> Par A Panizzo | 05/05/2008

WELT ONLINE:
Ölpreis knackt auch die 120-Dollar-Marke >>>

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Eurozone to Speak with One Voice?
SPIEGELONLINE INTERNAIONAL: The EU's monetary affairs commissioner has called for far-reaching new powers for the European Commission. He would like Brussels to have greater control over economic policy in euro zone countries -- and even wants its members to speak with one voice on the international stage.

Opponents of the European Union claim that Brussels already has too much influence over the internal affairs of the EU's 27 member states. They are unlikely to be thrilled by the news that a leading EU official is calling for far-reaching new powers for the EU's executive branch when it comes to member states' economic affairs -- and even foreign policy.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia (more...) wants the European Commission to have more clout in all areas of economic policy. In the future, the Commission should be able to supervise and coordinate reform efforts in the countries of the euro zone, in order to promote more competition in Europe's product and services markets, including the market for financial services. The proposals are contained in a report marking the 10-year anniversary of the euro which Almunia will present on Wednesday. EU Commissioner Wants Far-Reaching New Powers for Brussels >>> | May 5, 2008

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Is the Greenback Due for a Comeback?
SPIEGELONLINE INTERNATIONAL: After years of weakness, the US currency may be at a turning point. Who would gain -- and lose -- from a greenback comeback?

There's a growing sense among currency traders that the US dollar might finally stop its long slide against other major currencies.

The euro almost hit $1.60, a record high against the dollar, on Apr. 22, the same day the dollar index -- a measure of the greenback against a basket of major currencies -- also showed record weakness.

But since then, the buck has been on a modest upswing. The euro traded at $1.54 on May 2, and the dollar index is 3 percent off its lows. "We think the dollar is carving out a bottom," says Meg Browne, senior currency strategist at Brown Brothers Harriman.

The main cause of the dollar's recent strength is the same reason for its rapid collapse over the past year: the US Federal Reserve. The dollar's value suffered when the Fed cut interest rates rapidly to stem the financial crisis and prevent a US recession. The turning point may have been on Apr. 30, when the Fed lowered the fed funds rate target by a quarter-point, dialing back on its policy easings after a series of half-point cuts. Many believe the central bank is putting its rate-cutting on hold for now. Has the Dollar Hit Rock Bottom? >>> By Ben Steverman

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Iran: Sanctions Continue to Bite
ADN KRONOS INTERNATIONAL: Rome, 11 April - Although Iranian president Mahmoud Ahmadinejad continues to downplay the impact of UN imposed economic sanctions, the economy of the Islamic Republic has been badly affected by this international isolation.

On Thursday the director of the French oil company Total said that the firm had decided to give up on investments in Iran.

"The existing tensions are preventing every investment and cooperation with Iran," said a manager of the oil company in an interview with the French newspaper Liberation. He said that they are instead in the middle of "talks to operate in the south of Iraq."

The former Iranian nuclear negotiator, Ali Larijani, has said that he finds "shocking" the statements by government representatives who continue to minimise the effects of the UN economic sanctions. Iran: Sanctions Continue to Batter the Economy >>> By Ahmad Rafat | April 11, 2008

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Islamic Banking Heads West
ARABIAN BUSINESS.COM: A.T. Kearney report reveals Islamic finance doubled in the past year.

A new report from A.T Kearney, a global strategic management consulting firm, revealed that Islamic banks are making their mark on the financial markets of non-Islamic countries. While shaira-compliant [sic] banking has traditionally focused on the GCC and Malaysia, there has recently been a dramatic increase in the number of Islamic banks outside the core markets: most remarkably in the UK, where the number of Islamic banks has more than doubled over the past 12 months.



At the same time, they're products remain popular in their core markets, where Islamic banks consistently outgrow their conventional competitors. Assets in the Islamic banking sector grew to over $250 billion globally in 2006, according to the U.K Treasury. In the GCC, this segment expanded to 15 per cent of the total system and is expected to reach 50 per cent within the next few years.



The success at home enables these banks to export their business abroad, as Islamic banks from the GCC are the major shareholders behind all of the newly set-up Islamic banks in the UK. However, the strategic approach they take on differs between there and their home countries. Islamic Banking Heads West >>> | May 5, 2008

A T Kearney >>>

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