Canada’s Hot New Banking Trend: Shari’ah-compliant Finance
ISLAM BANK: TORONTO, ONTARIO -- It's an unlikely image: staffers at the Office of the Superintendent of Financial Institutions - surely one of Ottawa's driest regimes - are busy brushing up on the fine points of sharia law these days to cope with the anticipated expansion of Islamic financial services in Canada.

"Lately we have had more expressions of interest," said Normand Bergevin, managing director at OSFI's approvals and precedents division.

Several people on his staff are learning about business plans, legal structures, accounting methods, types of governance and other issues related to Islamic finance.

"It's fairly new to us," he said. "There's not a whole lot of experience here in terms of supervising or even understanding the different types of products. They all have little twists on them that make them very unlike anything we've ever seen before."

They're likely to see a lot more. Islamic finance is becoming one of the hottest areas in banking and insurance in the world as the Muslim population grows and wealth increases. A Hot New Banking Trend: Sharia-compliant Finance >>> By Tavia Grant | September 14, 2008

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Verstaatlichungen: USA verabschiedet sich vom reinen Kapitalismus
WELT ONLINE: Amerika als Gralshüter des Kapitalismus – diese Zeiten scheinen vorbei zu sein. In der Not werden kapitalistische Grundsätze über Bord geworfen. Verstaatlichungen, Regulierungswahn, immer neue Milliardenausgaben: In den USA ist der starke Staat auf dem Vormarsch.

Aus der Autostadt Detroit war General-Motors-Chef Rick Wagoner am Freitag nach Washington gereist. Vor Senatoren forderte er auf dem Kapitolhügel „Zugang zu Kapital“ aus der Hauptstadt. Im vollbesetzten Saal „Dirksen G50“ des US-Kongresses erntete er prompt zustimmendes Nicken.

Die Reaktion war fast zu erwarten. Schließlich soll schon der Namenspatron des Gebäudes, der Ex-Senator Everett Dirksen, gesagt haben: „Eine Milliarde hier, eine Milliarde da – und bald redet man über richtiges Geld.“ Nur dass heutzutage in Washington selten von einstelligen Milliardensummen die Rede ist, wenn über neue Ausgabenprogramme debattiert wird – sondern regelmäßig von zwei- und immer häufiger von dreistelligen Beträgen.

Die großen Autofirmen aus Detroit wollen 50 Milliarden Dollar in Form von zinsvergünstigten Staatskrediten. Ein Paket von Energiesubventionen aus dem vergangenen Jahr kostet 80 Milliarden Dollar, allein für Ethanol-Subventionen werden gegenwärtig zehn Milliarden Dollar jährlich ausgegeben. Das Konjunkturpaket aus dem Frühjahr schlug mit 150 Milliarden Dollar zu Buche, ein zweites, das vor allem der demokratische Präsidentschaftskandidat Barack Obama fordert, würde weitere 50 Milliarden erfordern. Und die gerade lancierte Rettung der zuvor kräftig von Behörden und Politikern gepäppelten Immobilienbanken Fannie Mae und Freddie Mac könnte gar 200 Milliarden Dollar verschlingen. „Die Ära von ‚big government‘ ist wieder da, mehr denn je“, schreibt das „Wall Street Journal“. Verstaatlichungen: USA verabschiedet sich vom reinen Kapitalismus >>> Von Martin Dowideit und Olaf Gersemann | 13. September 2008

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Rupert Murdoch's News Corporation Sells Russian Ad Firm
THE TELEGRAPH: Media mogul Rupert Murdoch appears to be pulling out of Russia just days after investigators raided the offices of News Corporation's outdoor advertising arm. 



News Outdoor, wholly owned by News Corp, is in exclusive sale talks with JCDecaux in a deal that could value the company at up to $1bn (£570m). 



It is understood that talks between the two companies were ongoing before the raids on Monday evening, with the sale appearing to be indicative of the tycoon's feelings towards doing business in the country. 



Just last month, Mr Murdoch said: "The more I read about investments in Russia, the less I like the feel of it. The more successful we'd be, the more vulnerable we'd be to have it stolen." Rupert Murdoch's News Corporation Sells Russian Ad Firm >>> By James Quinn, Wall Street Correspondent | September 11, 2008

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Joseph Stiglitz*: America Counts Cost of Wars It Can’t Win
… most analysts agree that at least part of the rationale behind Russia's invasion of Georgia, reigniting fears of a new Cold War, was its confidence that, with America's armed forces preoccupied with two failing wars (and badly depleted because of a policy of not replacing military resources as fast as they are used up), there was little America could do in response. Russia's calculations proved correct. - Joseph Stiglitz

THE AGE / /Business Day: The war in Iraq has been an expensive lesson for the US Government.

THE Iraq war has been replaced by the declining economy as the most important issue in America's presidential election campaign, in part because Americans have come to believe that the tide has turned in Iraq: the troop "surge" has supposedly cowed the insurgents, bringing a decline in violence. The implications are clear: a show of power wins the day.

It is precisely this kind of macho reasoning that led America to war in Iraq in the first place. The war was meant to demonstrate the strategic power of military might. Instead, the war showed its limitations. Moreover, the war undermined America's real source of power — its moral authority. America Counts Cost of Wars It Can’t Win >>> By Joseph Stiglitz | September 10, 2008

* Joseph Stiglitz, professor of economics at Columbia University, and recipient of the 2001 Nobel Prize in Economics, is co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Costs of the Iraq Conflict.

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Final Humiliation for Zimbabwe Dollar as Foreign Currency Legalised
THE TELEGRAPH: Robert Mugabe's government has bowed to financial reality and legalised the use of foreign currency in Zimbabwe's shattered economy.

It is the final humiliation for Zimbabwe's battered currency, which was worth more than the US greenback at independence in 1980.

Even after two revaluations that have knocked a total of 13 zeros off it, it was trading on the black market on Wednesday at around 6,000 to the USD – or 60,000,000,000,000,000 to one in terms of the original Zimbabwe dollar.

Gideon Gono, the reserve bank governor and a key player in the ruling Zanu-PF party, said that 250 wholesalers and 1,000 retailers would be licensed to accept foreign currency as an 18-month "experiment".

"These reforms are essentially a pragmatic response to the realities in the economy," he said. "We have watched and observed with heavy hearts the suffering of fellow Zimbabweans as they wait and continue to wait in long queues at the borders as they bring in basic commodities.

"We have also seen desperate mothers, youth and the elderly spending cold nights in foreign lands as they seek for basic commodities."

But while Mr Mugabe and his officials lament the country's woes, they consistently blame them on foreign plots and profiteering businessmen, rather than their own mismanagement, typified by the seizure of white-owned land from 2000 onwards, which destroyed commercial agriculture, the mainstay of the economy.

Since then the country has spiralled downwards, with millions leaving in search of work abroad, particularly in South Africa, and officially inflation in Zimbabwe is now running at 11.2 million per cent – unofficial estimates put it far higher.

The imposition of price controls failed to dampen inflation and instead merely saw goods and commodities vanish to the black market. Final Humiliation for Zimbabwe Dollar as Foreign Currency Legalised >>> By Sebastien Berger | September 11, 2008

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Takaful, Shariaful: The UK Goes Further Down the Road of Economic Dhimmitude!
THE TELEGRAPH: More than 2m Muslims in Britain will now be able to arrange motor insurance without compromising their religious beliefs, according to Salaam Halal Insurance. Bradley Brandon-Cross, the chief executive of Salaam Insurance, says: "Conventional United Kingdom insurance options conflict with the core beliefs of the Muslim faith and, as a result, give Muslims living in the UK who wish to drive a car no choice but to go against their beliefs in order to follow the law, which requires motorists to have cover.

"The face of Britain is changing and it is the responsibility of British institutions to cater for such changes and welcome diversity."

In conventional insurance, the risk is entirely transferred from the policyholder to the insurance company upon payment of a premium, explained Brandon-Cross. He says: "In return for paying the premium, the policyholder gets peace of mind and in the event of a valid claim, the claim settled. This brings elements of uncertainty and, in the view of Muslims, gambling, into the contract as one of the two parties will make a loss, especially the policyholder if no claim occurs."

n Sudan in the 1970s, a concept called Takaful insurance was created to circumvent these problems. Takaful is an alternative form of cover which a Muslim can obtain against the risk of loss due to misfortunes and is a structure in which risk is shared between all policyholders.

Junaid Bhatti, director of independent Islamic finance consultancy Ballencrieff House, says: "So far, the only successful Takaful product in the UK has been Amanah’s home insurance offering, which is normally cross-promoted with the HSBC Islamic Mortgage product. It is great to see that the Government’s support for the industry has continued, and a fully sharia-compliant Takaful company has received authorisation."

Takaful provides its members with the same level of protection offered by conventional insurance, but it operates in a different way. This type of insurance allows participants to pay their contribution into a pool which is invested strictly in sharia-compliant investments and any investment profits are distributed back to the Takaful fund.

Takaful is an Arabic word meaning "guaranteeing each other" or joint guarantee. Theoretically, Takaful is perceived as co-operative insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of "bear one another’s burden". The Car Insurance that Obeys Sharia Rules >>> By Kara Gammell | September 8, 2008

Cross-posted at: A New Dark Age Is Dawning >>>

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London Stock Exchange Trading Hit by Computer Crash on Frantic Day
THE TELEGRAPH: Trading on the London Stock Exchange has been halted after a computer system failed on one of the most frantic days of trading so far this year.

In an embarrassment for the LSE, the exchange said that no orders can be entered or executions of those trades occur. The LSE plans to bring back trading in a “controlled way’’, but couldn't say how long that will take.

The computer crash left the exchange's customers fuming on a day of heavy trading following the US government's bail-out of mortgage lenders Freddie Mac and Fannie Mae. London Stock Exchange Trading Hit by Computer Crash on Frantic Day >>> By Jamie Dunkley | September 8, 2008

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FTSE 100 Jumps after America Bails Out Fannie Mae and Freddie Mac
THE TELEGRAPH: The FTSE 100 jumped more than 100 points at the open this morning, following an earlier rally across Asia, on hopes that the nationalisation of America's two biggest mortgage lenders may help revive the troubled US housing market.

In an unprecedented move, the US Treasury yesterday took control of Freddie Mac and Fannie Mae in the largest financial bail out on record in a move designed to restore confidence in the $12 trillion (£5.8 trillion) US mortgage market.

The action, which comes at an unknown cost to the American taxpayer, prompted a bout of risk taking from investors across the globe.

Alongside the rally in the FTSE 100 and in stock markets in Germany, France, and Italy, prices for government bonds were hit and the dollar tumbled. FTSE 100 Jumps after America Bails Out Fannie Mae and Freddie Mac >>> By James Quinn, Wall Street Correspondent | September 8, 2008

THE TELEGRAPH:
Freddie Mac and Fannie Mae Rescue Sends Dollar Tumbling >>> By Jamie Dunkley | September 8, 2008

THE INDEPENDENT:
US Bail-Out Sends UK Shares Leaping >>> By Russell Lynch, PA | September 8, 2008

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Russian Invasion Spooks Investors
BBC: After further falls on Friday, the Russian stock market has plunged more than 30% since the country's invasion of Georgia last month.

Investor confidence has been hit hard by the conflict.

Some international banks estimating that between up to $20bn (£11bn)in foreign capital has been pulled out of Russia in the last month alone.

Since the invasion the value of the rouble has slumped, reportedly leading to the central bank stepping in.

So whereas Russia may have got away with a slap on the wrist from Europe for its invasion, Moscow is being punished much more directly by international investors. Russian Invasion Spooks Investors >>> By Rupert Wingfield Hayes, BBC Moscow correspondent | September 5, 2008

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Sterling Takes a Royal Pounding
FINANCIAL TIMES: Gordon Brown, UK prime minister, holidayed in the UK. Who can blame him? Going abroad has become expensive for British people. The decline in sterling, which began last year, is now turning into something of a rout.

The UK is exposed in three ways to the aftermath of the credit squeeze. It has heavily overvalued housing, the most indebted consumers in the world and an economy that is peculiarly reliant on financial services. High borrowing costs, a painful housing market correction and losses in the financial sector mean most of the UK’s assets have been dramatically revalued down. Sterling has suffered.

Against the euro, it has lost a sixth of its value since last summer. Against the US dollar, it has lost 13 per cent of its value. This week has been especially brutal. After nine successive days of falls, the pound is now trading at levels closer to those it plumbed in the aftermath of Black Wednesday than to the highs of last summer. A downbeat medium-term assessment from Alistair Darling, chancellor of the exchequer, some dire economic predictions and weak domestic data led to a 2.5 per cent fall against the dollar since Friday afternoon alone. Sterling Takes a Royal Pounding >>> | September 3, 2008

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Fannie Mae und Freddie Mac: Bush will Hypothekenfinanzierer verstaatlichen
WELT ONLINE: Zur Rettung der durch die Immobilienkrise schwer angeschlagenen US-Hypothekenfinanzierer Fannie Mae und Freddie Mac bereitet sich die US-Regierung nach Zeitungsangaben darauf vor, die Unternehmen komplett unter staatliche Kontrolle zu stellen. Die Aktien beider Institute stürzten daraufhin ab.

Wie die „New York Times“ und die „Washington Post“ am Freitagabend berichteten, soll das Management abgesetzt und die Finanzierer mit einem Notpaket aus Steuergeldern vor dem Absturz gerettet werden. Die Geschäftsführungen seien bereits über die Pläne informiert worden, hieß es unter Berufung auf namentlich nicht genannte Regierungsbeamte. Die Führung der Unternehmen solle zunächst einem Verwalter übertragen werden. Bush will Hypothekenfinanzierer verstaatlichen >>> | 6. September 2008

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Wall Street Open: Share Rout Continues as Jobless Figures Disappoint
THE GUARDIAN: Stock markets fell sharply in London and around the world today after further evidence of weakness in the US jobs market revived worries about the health of the global economy.

Jobs data released this afternoon showed that unemployment in the US soared to its highest level in nearly five years in August, as the credit crunch continues to takes it toll on the country's already fragile economy.

The US Labour Department said that employment in the US outside the agricultural sector fell 84,000 in August, exceeding economists' expectations of a 75,000 drop.

There was also an unexpected increase in the country's unemployment rate last month, to 6.1% - the highest since December 2003. Analysts has expected it to remain steady at 5.7%.

The US non-farm payroll figures for July were revised up to 60,000 and June's to 100,000 from a previously reported 51,000 in each month. Employers cut payrolls for the eighth consecutive month and also reduced hiring in a bid to save money. Wall Street Open: Share Rout Continues as Jobless Figures Disappoint >>> By Julia Kollewe and Kathryn Hopkins | September 5, 2008

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US Stock Markets Dive for Fourth Day on Sales and Job Fears
THE TELEGRAPH: The US entered bear territory yesterday as investors took fright at a combination of weak domestic retail sales, a declining labour market and fears that faltering global growth will impact on the profits of some of America's largest multi-national companies. 



The Dow Jones Industrial Average lost almost 345 points, or 3pc, while the broader S&P 500 index also fell 3pc in its longest stretch of losses since January, as traders and hedge fund managers continued to sell shares in major companies. 



The Dow was dragged down by heavy falls in financial companies' shares, including Bank of America, American International Group and Citigroup. Other companies to be hit included Boeing, down 4.6pc, and Caterpillar, down 5.6pc.



Nasdaq, the technology-focused stock market, was also badly hit, falling 3pc, on fears that global technology providers like Cisco, which fell 4.4pc, could be hit by an international slowdown. All three indexes were in bear territory – defined as a 20pc drop from a recent peak.

Fresh economic data added to the gloom, with government numbers showing an unexpected jump in the number of people filing for unemployment benefits, while a report by ADP Employer Services showed private employers cut 33,000 jobs last month. US Stock Markets Dive for Fourth Day on Sales and Job Fears >>> By James Quinn, Wall Street Correspondent | September 4, 2008

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Foreign Direct Investment in Saudi Arabia’s Tadawul Seen as Next Step Following Swap Agreements
THE FINANCIAL TIMES: The introduction of swap agreements that permit indirect foreign investment in Saudi Arabia’s stock exchange is a step toward opening the market to direct foreign investment in the Tadawul, said local bankers.

“Next comes the removal of the swap contract and allowing foreign direct investment. There is no date. It could be months or years,” said Morgan Stanley Saudi Arabia managing director and chairman, Fahad Almubarak.

“The next step is to allow investors to buy directly instead of through swaps but I don’t think [the regulator] is in a hurry,” said one Riyadh-based banker.

The swap agreements allow an authorised local firm to trade on the Tadawul on behalf of a foreign client. Its introduction has been seen by bankers as a significant move by the Capital Market Authority (CMA) toward opening the market to foreign investment. “This is very much the opening up of the market. It is absolutely going to facilitate foreign investment in the underlying shares,” said HSBC Saudi Arabia CEO Timothy Gray shortly after the introduction of swap agreements was announced on 20 August.

Both Morgan Stanley and HSBC are authorised by the CMA to transact swap agreements with foreign investors.

Previously, investors outside the GCC were banned from trading on the bourse, except indirectly through mutual funds. The introduction of swap agreements will allow international funds to stock pick, said Almubarak. “It is very significant as Saudi Arabia has been closed to direct investment in specific stocks. Significantly, it will allow them to pick stocks and decide on the duration and the amount. Now investors will receive the direct economic benefit,” he said. Foreign Direct Investment in Saudi Arabia’s Tadawul Seen as Next Step Following Swap Agreements >>> By Victoria Robson in Dubai | September 3, 2008

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Abu Dhabi: On a Mission to Buy Up the West?
THE TELEGRAPH: Football club takeover shows Gulf is growing

The world's richest city, Abu Dhabi, is better known for its interest in oilfields than football pitches.

But when an investment fund based in the tiny Gulf state took over Manchester City Football Club this week, it added to the growing evidence that the region is starting to look beyond its traditional source of wealth.

Abu Dhabi - the capital city and largest of seven states in the United Arab Emirates - is awash with 9pc of the world's proven oil reserves and 5pc of the world's natural gas.

The region, which discovered its vast reserves only in 1958, has been quietly building up its wealth under the rule of the UAE Royal Family since gaining independence in 1971.

It is now said that if oil prices rise by $1 (56p), the population of Abu Dhabi rakes in $500m a day - all heading for state coffers worth an estimated $3 trillion.

The city is less well known than its high-profile neighbour, Dubai, but its ambition is far greater, says Middle East expert Christopher Davidson, of Durham University.

"We are dealing with an economic superpower here and it is going to completely eclipse Dubai in the coming years," he says. "Since the Crown Prince inherited the presidency in 2004, he has been increasing investment in the city itself.

"The Manchester City investment is sending money abroad, but its purpose is very much about putting Abu Dhabi on the map."
Where Dubai is known for glitzy skyscrapers and shopping malls, Abu Dhabi is taking the Gulf upmarket by buying itself a Guggenheim Museum and Louvre art gallery. It is also shoring up the West with investment, Dr Davidson explains.

Many of these deals are orchestrated by secretive sovereign wealth funds associated with the Royal Family, investing $1 trillion of oil money on behalf of the state's three million residents. Abu Dhabi Deal Gives Tradition a Kicking >>> By Rowena Mason | September 3, 2008

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Britain Up for Sale?
THE INDEPENDENT: Manchester City is one of many companies to tap the deep pockets of private and state-run funds from capital-rich regions. But should these investors be a cause of concern?

From the former Thai prime minister to a Middle Eastern property tycoon, Manchester City's changing ownership is emblematic of the shifting balance of power of the global economy.

The club confirmed yesterday that it is to be sold by Thaksin Shinawatra to the Abu Dhabi United Group for Development and Investment, fronted by Dr Sulaiman al-Fahim, the chief executive of Hydra Properties.

The deal is one of many. Not only are football clubs increasingly snapped up by foreign investors, from Roman Abramovich's Chelsea to Malcolm Glazer at Manchester United, but businesses across all sectors are increasingly attracting fortunes made in booming developing economies.

It is not an entirely new trend – the Chinese bought MG Rover as long ago as 2002 – but it is gathering pace. India's Tata Group picked up Jaguar Land Rover for £1.15bn in March, and in May, the Malaysian tycoon Ananda Krishnan took a 20 per cent stake in Johnston Press under the newspaper group's £212m emergency fundraising proposal.

But the deepest pockets, and the biggest shoppers, are the sovereign wealth funds (SWFs). Worth just $2bn (£1.1bn) in 2003, the value of SWFs rocketed to $92bn by last year, according to Monitor Group. The funds made some $58bn-worth of investments in the first three months of this year – more than the combined total between 2000 and 2005 – and predictions of future value go up as high as $10 trillion (£10,000bn) by 2012.

"Individual investors, big companies and sovereign wealth funds are all part of the same story," said Gerard Lyons, the chief economist at Standard Chartered bank. "There's a shift in world economy where developing countries are becoming more important, and these investors are a reflection of that shift in financial power."

Mr Fahim's native Abu Dhabi has the biggest sovereign fund of all. There are two separate entities, the Abu Dhabi Investment Authority (ADIA) and the Mubadala Development Corporation. The former alone is estimated at $875bn, and between them the vehicles own stakes in ventures as diverse as Ferrari, the Suez Cement Company and New York's iconic Chrysler building.

In public, at least, Abu Dhabi's UK investments are limited. But the Prime Minister said in June that talks with the ADIA around the Government's plans to open up UK energy markets to foreign investors were progressing well. Other Middle Eastern countries are already well-represented here. Britain Up for Sale? >>> By Sarah Arnott | September 2, 2008

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Pound Falls to Two-Year Low on Darling Blunder
TIMESONLINE: The pound fell to a two-year low of $1.80 against the dollar today as the market digested last week's comments by Chancellor Alistair Darling that Britain could be heading for the worst economic conditions for 60 years.

Sterling also weakened ahead of this month's interest rate decision on Thursday, on hopes the Bank of England's Monetary Policy Committee (MPC) will vote to cut borrowing costs. Pound Falls to Two-Year Low on Darling Blunder >>> By Dearbail Jordan | September 1, 2008

THE TELEGRAPH:
Sterling Tumbles to Record Low against the Euro >>> By Rowena Mason | September 1, 2008

TIMESONLINE:
Chancellor Alistair Darling Feels Heat as Sterling Plunges: Business leaders accused Alistair Darling of talking Britain into a recession as the pound fell to a record low yesterday. The Chancellor’s warning that Britain is facing its biggest economic challenge for 60 years was described as a “self-fulfilling prophesy”. >>> By Francis Elliott, Peter Riddell and Christine Buckley | September 2, 2008

THE TELEGRAPH:
Sterling Sell-off Intensifies as Investors Turn Their Backs on Britain: The pound's slump accelerated for a second day in London as traders abandoned British investments following Alistair Darling's warning that the economy is facing its worst threat for 60 years >>> By Edmund Conway, Economics Editor | September 2, 2008

THE FINANCIAL TIMES:
Dollar Surges as Commodities Sell-Off >>> By Peter Garnham | September 3, 2008

BBC:
Pound Dips Further against the Dollar >>> | September 3, 2008

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Islamic Economics
THE MUSLIM NEWS: Islamic and conventional insurance to be separated 
In Bangladesh, the Insurance Ordinance 2008, approved last month, will allow Islamic insurance, but no company will be permitted to do both Islamic and conventional businesses simultaneously in a major change in the 70-year-old insurance laws. 


Many insurance companies, which run both forms of practices, have to choose either Islamic or conventional insurance after the promulgation of the new law. 


Out of 60 insurance companies currently in operation under the private sector, six are full-fledged Islamic insurance companies. Of these six, three deal with life insurance while the remaining are general insurance companies. Islamic Economics >>>

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The Labour Party Has Done It Again! Darling Warns of Economic Crisis
Photo of Alastair Darling, the Chancellor of the Exchequer, courtesy of The Guardian
BBC: The UK is facing its worst economic crisis in 60 years, Chancellor Alistair Darling has admitted.

He told the Guardian newspaper that the economic downturn would be more "profound and long-lasting" than most people had feared.

Using strong language, Mr Darling acknowledged voters were angry with Labour's handling of the economy.

Ministers are expected to announce a package of measures next week to kick-start the moribund housing market.

Voter anger

House prices are falling at their fastest rate in 18 years, leading to fears of a wave of repossessions in the upcoming months.

Mortgage lending has slowed dramatically due to the credit crunch while key indicators have suggested that the economy could be poised to go into recession in the near future.

The economy showed no growth in the second quarter of the year while building firms and retailers have laid off thousands of staff in recent weeks amid fears that the economy will deteriorate further. Darling Warns of Economic Crisis >>> | August 29, 2008

THE GUARDIAN:
Economy at 60-Year Low, Says Darling. And It Will Get Worse: In an exclusive interview, chancellor says Labour failing to communicate with voters.

Britain is facing "arguably the worst" economic downturn in 60 years which will be "more profound and long-lasting" than people had expected, Alistair Darling, the chancellor, has told the Guardian today.

In the government's gravest assessment of the economy, which follows a warning from a Bank of England policymaker that 2 million people could be unemployed by Christmas, Darling admits he had no idea how serious the credit crunch would become.

Darling's blunt remarks lay bare the unease in the highest ranks of the cabinet that the downturn is making it all but impossible for Gordon Brown to recover momentum after a series of setbacks.

The chancellor, who says that Labour faces its toughest challenge in a generation, admits that Brown and the cabinet are partly to blame for Labour's woes because they have "patently" failed to explain the party's central mission to the country, leaving voters "pissed off". >>> By Nicholas Watt, chief political correspondent | August 29, 2008

THE TELEGRAPH:
George Osborne Slams Alistair Darling for British Tax Exodus: Shadow chancellor George Osborne has accused Alistair Darling of damaging the UK economy as yet another company confirmed it is quitting the country for tax reasons >>> By Helen Power and Jonathan Russell | August 29, 2008

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For the Third Year Running, Angela Merkel Tops the Forbes List of the Most Powerful Women in the World
Photo of Angela Merkel, the Chancellor of Germany, courtesy of Google Images
THE GLOBE AND MAIL: BERLIN — German Chancellor Angela Merkel topped Forbes magazine's list of the world's 100 most powerful women for the third year running, while U.S. Secretary of State Condoleezza Rice slipped to seventh from fourth last year.

Ms. Merkel, who became Chancellor in November, 2005, was cited by the magazine in its latest edition for her efforts to streamline Europe's biggest economy, increasing the national retirement age and putting more women in senior government posts.

The magazine was impressed with her because she “bulldozes through controversy,” referring to her meeting with the Dalai Lama last year, her chastising of Zimbabwean President Robert Mugabe and her push “to make the euro a bigger player in global financial markets as the dollar wanes.” Merkel Tops Forbes List of Powerful Women >>> Associated Press | August 28, 2008

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