Dubai is sliding into financial meltdown even more quickly than its property boom took off, and is increasingly dependent on its wealthier neighbours in Abu Dhabi for support. It managed to sell $5bn of bonds to two state-controlled Abu Dhabi banks yesterday, but there seems to be little private sector appetite for Dubai debt, which the credit ratings agencies estimate adds up to at least $80bn.

Indeed, yesterday's bond issue was part of a $20bn issuance programme. There has been little ( Read more... )
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But we're getting distracted again. Lloyd Blankfein, the chief executive of Goldman Sachs, in his speech in Frankfurt this week, promised to ban the practice. Timothy Geithner, in a town hall meeting on Thursday, name-checked the guaranteed bonus as a particularly egregious problem.

Except that the real issue with Wall Street remuneration is not the guaranteed bonus, it is the unguaranteed bonus, the one that employees feel they have to shoot high and take big bets in order to achieve. ( Read more... )
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What's more likely, however, is that the Supreme Court will uphold the judgements of two previous hearings in lower courts, both of which ruled that the OFT is well within its rights to look at whether the charges banks have levied when people exceed overdraft limits or bounce cheques broke the law. Since the OFT has been quietly continuing its investigation while waiting for this final ruling today, that could mean a verdict from the regulator within just a few weeks.

That verdict will ( Read more... )
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NewsCorp is furious that Google pays it not a dime for the content it skims from its global publishing empire, while Microsoft is fed up with seeing its own search engine service, relaunched earlier this year as Bing, so comprehensively outgunned. But what if Microsoft were to pay NewsCorp for displaying its content on Bing, on the understanding that the publisher then prevents Google from linking to any of its work?

It could be a win-win. NewsCorp finally starts getting paid when its content ( Read more... )
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That ugly word "macroprudential" cloaks a simple idea, and one that can do good. It means that the banking system as a whole, and perhaps some institutions in particular, would be required to put more money aside during boom times, which can then be used to support lending during slumps ? "capital surcharges". You can see how this might be a neat way of solving the riddle of the credit cycle; it would, in theory at least, have made the boom a bit less boomy, and made our present ( Read more... )
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The top shareholders at Goldman Sachs are getting restive, it is reported ? and not before time. While the great vampire squid has been trumpeting the modest and self-interested donations it is making to charity in an attempt to pay reparations for the credit catastrophe, its investors are finally rousing themselves to play their proper role in taming Wall Street pay.

Or at least, maybe just a little bit. Some of Goldman's biggest shareholders are said to have asked, politely, ( Read more... )
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There is way too much internet. Or, to put it another way, there are more people and corporations creating ever more content for the web than can possibly make a living from ads placed alongside the material being uploaded. It is an inauspicious time to be ramping up one's journalism on the internet, yet that is precisely what AOL is doing.

It has been boxed into this. The other half of its business is demonstrably and imminently doomed. Its dial-up internet service provider operations ( Read more... )
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Indeed, the England and Wales Cricket Board will be much more upset about today's ruling than Sky. The broadcaster would, of course, like to keep the Ashes, which won it 1.9 million viewers for the climax of the summer series. But a biennial sporting event does not have the commercial significance of, say, weekly Premier League football.

Nor is the fourfold increase in audience figures that terrestrial TV might deliver ? Channel Four got 7.4 million viewers for England's Ashes victory in ( Read more... )
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It's also debatable whether the measures ? brought in on the grounds of preventing cut-price dumping - did anything to protect shoemakers in Italy, Portugal, Poland and Spain, which were supposedly the beneficiaries. Most of them operate in much more upmarket niches than their Asian competitors, so much so that it's almost as if Gucci were to start demanding tariffs on the handbags imported by Primark.

There's also a dirty little secret that's not often talked about: a number of European ( Read more... )
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The likelihood is that there will be volatility, and lots of it, although it seems fairly clear that prices are going to rise over the next few months, and perhaps quite sharply, before the inflation rate eases back later in the New Year.

Faced with this, the awkward issue for the Bank is that its means of controlling inflation (an increase in interest rates) appears to have been denied it by economic circumstances.

A rate hike now could very well prove to be disastrous for the British ( Read more... )
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The financial details of about 4,450 UBS clients are to be handed over, and 4,200 of them are suspected of "advanced and serious fraud".

A further 250 are suspected of the lesser offences of tax dodging.

The fun will really start when the information reaches the authorities and names start to be named in indictments.

American capitalism might have a litany of failings, but it certainly appears more than capable of dealing with white collar criminals, who are (more or less) ( Read more... )
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For all these reasons, investors are increasingly focused on so-called "exit strategies". How and when should economic life-support policies be removed? After all, interest rates in the developed world are at their lowest levels ever, the gentle hum of the monetary printing press can still just about be heard and budget deficits are huge. Are these policies still necessary, or is it time to expect the world economy to stand up on its own two feet?

It's easy ( Read more... )
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You can't put a price on the change in consumer and business confidence that has come about because property prices have arrested their decline. The imploding financial system, the collapsing consumer economy, the creeping blight of many neighbourhoods across the US ? the FHA has been a key piece of all of these.

The agency was set up in the depths of the Great Depression to sell cheap mortgage insurance to people, such as first-time buyers, who cannot rustle up a down-payment of more than ( Read more... )
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In Britain alone we've committed almost £1 trillion (a million million) to the banking system, and the strains are becoming unbearable. Sooner or later, the official money drip will run dry, the banks will shrink their lending yet again, and the economy will take another nasty hit.

Second, a reckoning for public finances cannot be long delayed. Only the most radical programme of spending cuts seems likely to fix Britain's soaring budget deficit, and that means higher taxes and deteriorating ( Read more... )
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The banks say bad debts are peaking and (in some cases) coming down, something that usually lags a recovery. A better than expected result on unemployment is the latest evidence. It may prove to be a blip. But the predictions held that we should be in a much worse state than we are actually in.

There's been no wave of optimism, to be sure. More a steady drip, drip. But it is there, and it is perceptible.

I don't want to underestimate the challenge this country faces. The Government's ( Read more... )
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The pound immediately took a bath on the foreign exchange markets, while the cost of insuring Britain's debt against default over five years increased (yes, credit crunch or no, you can still play around with crazy derivatives like this). The spotlight is once again right back on Britain's yawning budget deficit, and perhaps it should be. A look at one of those counter things that shows how rapidly it is increasing is enough to tell you that.

But there is another issue at work here, too. ( Read more... )
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Despite all the encouraging signs of recovery in recent months, the US unemployment rate continues to rise. In October, the rate rose to 10.2 per cent, despite a half-decent bounce in overall output in the third quarter. Unemployment is in danger of reaching a new post-war high. If recovery is on the way, why are companies letting workers go? Why are they not re-hiring to meet higher future demand? The answer may come from the varying fortunes of different parts of the US economy.

The Institute ( Read more... )
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O2, of course, also has exclusive rights to the iPhone here. But while you can see the attraction of such deals to O2 and its rivals, why would a handset maker choose to limit potential sales by selling only to the customers of one network?

Interestingly, Palm's boss, Jon Rubinstein, used to work at Apple, so he's following the distribution model of his former employer. One rationale is technological ? neither Apple nor Palm is a phone specialist, and as each network requires tweaks to the ( Read more... )
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Michael Arrington's TechCrunch blog is embroiled in a hacking scandal of its own, after publishing secret internal documents that were stolen from Twitter. An anonymous hacker, calling himself Hacker Croll, obtained more than 300 electronic files, ranging from Twitter's financial projections and information about negotiations with Facebook and Google, to personal staff details and the names of every senior Valley executive who has asked to work there.

Scintillating ( Read more... )
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At first sight, the banning of commission that the FSA proposes is long overdue. Under the current system, many financial advisers earn their living through selling products on which the provider decides what level of commission is payable. That means customers can never be sure whether the advice they receive was given because the product recommended is the best one for their needs or because it paid the biggest commission to financial advisers.

The industry understandably takes umbrage ( Read more... )
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