Bush to host world summit on financial crisis

WASHINGTON (CNN) -- President Bush announced Saturday that he will host the first of what could be several summits of world leaders to discuss the global response to the financial crisis.

"It is essential that we work together because we're in this crisis together," Bush said at Camp David, Maryland, with French President Nicolas Sarkozy and European Union President Jose Manuel Barroso.
"Together we will work to modernize our financial systems," Bush said. "We must resist the temptation of financial isolationism."
Bush said the summit would include developed and developing nations from around the world.
No date was set, though a White House statement said the gathering would be held in the United States "soon after" the November 4 general election.
Sarkozy emphasized the need to bring Asian states into the discussions.
"We must make haste, because we must stabilize the marketplace," he said. "This is a worldwide crisis, so therefore we must find a worldwide solution."

The summit will seek to establish reform measures to "assure global prosperity in the future" and would be the first in a possible series of such meetings designed to implement the measures.

Official: Sarkozy's bank account hacked by thieves

PARIS, France (AP) -- The French Cabinet's spokesman says "swindlers" have broken into the personal bank account of President Nicolas Sarkozy.

Spokesman Luc Chatel told France's Radio-J an investigation is under way and insists the incident "proves that this system of checking (bank accounts) via the Internet isn't infallible." He did not elaborate.
Weekly Journal du Dimanche reported Sunday that thieves seized Sarkozy's bank account information and swiped small sums of money.
The newspaper said Sarkozy reported the theft last month and that those responsible haven't been found. The report cited an unnamed official close to the investigation for its information.
The press service for Sarkozy's office declined comment

Stocks slide after Bush speech

Bush said the bailout spending would protect thefree market system[AFP]

US stocks have closed lower amid more bleak assessments of the country's economy - just hours after George Bush, the US president, defended the financial bailout of ailing banks.
The Dow Jones index fell 1.4 per cent to close at 8,852 on Friday following reports which indicate poor US consumer confidence and weaknesses in the nation's housing market.
Bush had earlier addressed the US chamber of commerce, saying the country was dealing with a "serious financial crisis".
He is due to meet European leaders on Saturday to discuss the global financial crisis. Bush is to hold a meeting at Camp David with Nicolas Sarkozy, the French president, and Jose Manual Barroso, the European Commission president, who are to stop in the US on their way home from a summit in Canada.
European leaders have said the meeting could pave the way for an overhaul of the global financial regulatory system.
'Focus on economy'
Charlie Parker, an investment editor from Citywire, a financial news service, told Al Jazeera: "The markets have moved from a sense of utter panic last week ... to a sense that the time has come to focus on the economy.
"The problem is, even if markets stabilise, we are looking at a situation where production is falling, unemployment is growing, and not just in the Western world.
"In one sense - and I don't want to give credit to George Bush - governments have been pretty decisive around the world. "They reacted and it has helped. Banks are starting to lend again. "Have they avoided a recession? No, they haven't. And really, they were never going to."
Earlier, Bush said every dollar spent on the $700bn bailout, which is using taxpayers money to buy up bad loans held by financial institutions, will be "subject to strong oversight".
"We're looking into serious incidents of fraud, abuse in the financial system," he said.
"American people want a clear explanation of what this crisis means for them, what the government is doing to fix it and what it means for the future of the free market.
"As a strong believer in the free market, I would oppose such measures [government intervention] under ordinary circumstance, but these are not ordinary circumstances."
Bush blamed the global crisis on bad mortgages, packaged up as "complex financial assets that were sold ... across the world".
Lack of regulation
"Had the government not acted, the hole in our financial system would have grown larger," Bush said, adding that the bailout, passed by congress on October 4, had been necessary in order to avoid "more drastic and costly measures later on".
The bailout plan will also see the US government take stakes in some US institutions, bringing the it closer to deals arranged in Europe.
The US government announced on Tuesday that it would use up to $250bn of the bailout to buy stakes in major banks.
Many Americans see highly paid executives on Wall Street, as well as a lack of regulation of their activities, as being behind the credit problem.
Troubled markets
Rosiland Jordan, Al Jazeera's correspondent in Washington, said that Bush was trying to bolster confidence in the US moves to end the crisis.
"We've heard from President Bush this fall [autumn] much more frequently than one might expect ... it's very important from where President Bush sits to try to convince people that this crisis will spell itself out," she said.
The falls on Wall Street followed a US government report that said home construction fell more than expected last month to the lowest pace since early 1991.
The commerce department report said that first-time home purchases fell more than six per cent in September, below the 880,000 units forecast by Wall Street economists.
The report is a reminder that the original source of much of the economy's turmoil, the housing market and the sub-prime chaos, remains troubled.

The One Percent Doctrine

The One Percent Doctrine (ISBN 0-7432-7109-2) is a nonfiction book by Pulitzer Prize winning journalist Ron Suskind about America's hunt for terrorists since September 11th. On July 24th, 2006, it reached number 3 on the New York Times Best Seller list.
It assesses the ways in which American counter-terrorism agencies are working to combat terrorist groups. In the narrative, Suskind criticizes the Bush administration for formulating its terrorism policies based on political goals rather than geopolitical realities.
The title comes from an excerpted story from the book itself, in which Vice President Dick Cheney describes the Bush administration's doctrine on dealing with terrorism:
“ If there's a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It's not about our analysis ... It's about our response ”

World Financial Crisis: Lesson form Islamic Economics

By M. Fahim Khan,

No doubt, riba (interest, usuary) and maysir (gambling, speculative activities similar to gambling) are the major factors leading to the current financial crisis. Islam's prohibition of Riba and Maysir along with Islamic values and morals, and recognizing others' interest in one's economic fortunes, if adhered to, could not have lead the world to the present day financial crisis. Keeping individuals and Society free form financial and economic crises can clearly be seen as one of the objectives of such institutions.

The question, however, is how to do this now? Where to go from where we are now? Even if we can declare that taking and charging of interest in banking operations is prohibited, the question remains; what is the alternative? Current practice of Islamic banking has not provided any convincing alternative. With the Tawarruq made Shari'a compatible, the results can not be expected much different from those of interest based banking system.

Through this forum, I like to draw the attention of all concerned about the need to investigate into the institutional framework of financial system that prevailed in the Islamic societies before they were colonized by the West. The contemporary financial system came into existence when the Muslim societies had already been colonized and their institutions demolished or diluted. The modern financial system developed without taking any lessons from the Muslim civilization.

It is curious to note that almost all branches of modern knowledge admit the contributions of Islamic civilization often referred to "medieval ages" towards their discipline, except science of Economics and Finance which does not recognize any contribution made by Islamic civilization in this field. Even Schumpeter, writing history of economic thought totally ignores the long history of economic successes in the era of Islamic civilization. It was the period when the poverty was non existent. Basic needs of every one were met. No one was "poor" enough to look forward to receive charity. Worldwide famine type situations were intelligently and successfully dealt with. There is no evidence of financial and economic crisis in the long history spread over about 1000 years.

It is now the time that visionary economists and financial gurus look back and investigate into the institutional set in the economy of medieval ages to find solution for the current crisis. Those familiar with the economy of medieval ages do know that its financial system was not a banking-based system. Its system was either market (of goods and services) based system or it was based on Qardh Hasan (benevolent loans, normally understood as charities). Financing needs in the market were met through trade contracts. Sale contracts with deferred payments and sale contracts with advance payments met the financing needs through the market without needing financial intermediation. "Know thy client" is more relevant for market based financial system and hence the issues of adverse selection, moral hazard and transaction cost were minimized. The financing needs that market could not or did not want to meet, were met by the institutions of Qardh Hasan, Zakah and Awqaf promoted by Islamic teachings. The issue of moral hazard, adverse selection and transaction did not occur even in these institutions. The need for developing financial intermediaries never arose despite economic growth and development.

It is not the place to discuss the details of such a system to meet the financing needs of a modern economy. Once the concept is acceptable, the details can be worked out. The point is that market itself is a better place to generate a financial system to suit its own needs. If markets are functioning well and institutions are in place to give support and protection for the market to provide financing as part of the contract of the sale and purchase of goods and services and if there are institutions to meet the social needs not met by market, there will be no need to develop banks to provide a financial system on interest basis. Even now, several businesses large and small, wholesale and retail, are doing the business by providing financing while selling/purchasing goods and services, without letting their customers go through the banking system to get the financing. They do not have to explicitly refer to interest calculations when providing financing for their sales and purchases. Every thing is built-in within the price.

The concept of Forward Sale as give by Islam (known as Bai' Salam) is wonderful guide to develop a market of Futures contract without tempting the traders and producers in the market to go into gambling or gambling type "speculation". (For more detailed discussion on this, see my paper on "Islamic Futures and their Market" published by Islamic Research and Training Institute and is downloadable free from their website). Modern finance does not recognise the financial system prevailing in medieval ages because it did not borrow anything from there. Occasionally, somewhere we may find a reference to forward contracts of the medieval ages. But there is hardly any attempt to understand the nature and economics of those forward contracts in comparison with the forward and future commodity contracts of today. The financial gurus may find a lot in the economic and financial system that was in practice when Islamic civilization was on top of the world.

For drawing lessons from the Islamic financial system as prevalent in the so called medieval ages, what is needed to be done is to reform the market of goods and services in a way that allows the market to develop its own financial instruments to suit the financing needs of the society. Infrastructural institutions are required to be developed to promote and protect the financing provided by the market of goods and services as part of its sales and purchases, rather than promoting and protecting the banking institutions to finance gambling and speculation.

A bank-free but market-based financial system is the key to have crisis-free financial and economic system. The developed world can take lead in introducing market-based financial system and show the way to the developing world too, how to get out of the trap of banking based financial system.

Banking-based financial system has long been losing its credibility in the eyes of financial gurus. To Frederic Mishikin, it is a puzzle, "What makes banks so important?" when there are better and less complicated options available in the market to raise financing (including loans). See his book The Economics of Money, Banking and Financial System.

The World Bank report on Institutions, 2000 identifies two types of financial system. Market based financial system and banking based financial system. Germany has been mentioned to be having a more market based financial system compared to other countries in the West and now, probably, it is Germany which is in a better shape among the G-7, in this time of worst financial crisis.

It is in the interest of both the Islamic economists and conventional economists to look into the Islamic economic system which has been in practice for a very long time. Islamic Civilization gave a lot to the modern world to develop physical and natural sciences. Let us see if there is anything for the science of economics and finance to borrow from there in the interest of the wellbeing of man on earth. I particularly invite those working in the framework of New Institutional Economics (NIE) to take it up as a commitment to their own discipline. Let us think of an economy at least free of commercial banking. To start with, let us see how an economy would shape up if there were no commercial banks and there were no short term borrowing and lending on interest through financial intermediaries.
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M. Fahim Khan is the President of Islamic Society for Institutional Economics [www.i-sie.org]

Russian missile test adds to arms race fears

Russia yesterday threatened a new cold war-style arms race with the United States by announcing that it had successfully tested a new intercontinental ballistic missile capable of penetrating American defences.
Russia's hawkish first deputy prime minister, Sergei Ivanov, said the country had tested both a new multiple-warhead intercontinental missile, the RS-24, and an improved version of its short-range Iskander missile.
He said the missiles were capable of destroying enemy systems and added: "As of today Russia has new missiles that are capable of overcoming any existing or future missile defence systems. In terms of defence and security, Russia can look calmly to the country's future."
The missile tests follow months of anger in Moscow over the Bush administration's determination to install parts of a controversial missile defence shield in eastern Europe.
President Vladimir Putin has been incensed by the Pentagon's plans to site missile interceptors and radar shields in Poland and the Czech Republic. The row has contributed to the worst relations between Russia and the west for 20 years.
But as well as confrontational rhetoric from Mr Putin, Russia has also been preparing a secret military response, analysts said yesterday. They said the new RS-24 missile was capable of:
· carrying multiple independent warheads, making it almost impossible to shoot down
· travelling inter-continentally to hit targets thousands of miles away
· using sophisticated navigation systems which allow the warheads to lock on to different targets
Yesterday's launch took place at the Plesetsk cosmodrome in north-west Russia. The missile successfully hit its target 3,400 miles away in far eastern Kamchatka peninsula, on Russia's Pacific coast, the Russian strategic missile forces said.
The statement said the missile would replace two ageing ICBM systems - the RS-18 and RS-20, known in the west as the SS-19 Stiletto and SS-18 Satan, respectively. Separately, an upgraded and more accurate version of the Iskander-M cruise missile, was fired from southern Astrakhan.
Mr Ivanov, a potential successor to Mr Putin next year, hailed both tests as successful. He said Russia now had a "new tactical system and a new strategic system". He also signalled that Russia was preparing to upgrade its nuclear forces.
The treaty between the US and the Soviet Union banning intermediate range nuclear weapons was no longer effective, warned Mr Ivanov, Russia's former defence minister, because it did not apply to Russia's neighbours such as China.
Alexander Pikayev, an arms control expert and senior analyst at the Moscow-based Institute for World Economy and International Relations, said the development of the missile had probably been inevitable after the Bush administration unilaterally withdrew from the Soviet-era anti-ballistic missile treaty in 2002, preventing the Start-II treaty from coming into force. The treaty banned missiles with multiple warheads.
The test comes at a time of increased tension between Russia and the west over missiles and other weapons issues.
The Bush administration insists its new missile defence system is aimed at rogue missiles fired by Iran or North Korea. But Russia says the system destroys the strategic balance of forces in Europe and is a direct threat to the country's nuclear arsenal.
"We consider it harmful and dangerous to turn Europe into a powder keg," Mr Putin said yesterday when asked at a news conference with the Portuguese prime minister, Jose Socrates, about the test.
On Monday Russia called for an emergency conference in June on the key Soviet-era conventional forces in Europe treaty, which has been a source of increasing friction between Moscow and Nato.
The call follows last month's statement from Mr Putin in which he declared a moratorium on observing Russia's obligations under the treaty, which limits the number of aircraft, tanks and other non-nuclear heavy weapons around Europe. The treaty was first signed in 1990 and amended in 1999 to reflect changes since the Soviet breakup.
Russia has ratified the amended version, but the US and other Nato members have refused to do so until Moscow withdraws troops from the former Soviet republics of Moldova and Georgia - an issue Moscow says is unrelated.
Mr Putin warned that Russia could dump the treaty altogether if western nations refused to ratify its amended version, and the foreign ministry said on Monday that it had lodged a formal request for a conference among treaty signatories in Vienna, Austria, on June 12-15.

Al Arabiya Hacked By Shiite Extremists

Al Arabiya Hacked By Shiite Extremists
Hackers accusing Saudi-owned Al Arabiya of being pro-Sunni shut down the channel’s news website shortly after midnight on Thursday in a cyber attack that claimed to be in retaliation for recent attacks on Shiite websites. Al Arabiya’s website was forced to change its domain to www.alarabiya.tv, the network reported on Friday.
The hackers put the following text on the frontpage of www.alarabiya.com:


As you can see, not only did the hackers accuse Al Arabiya of being pro-Sunni and anti-Shia, but seemingly also of being pro-Israe. One of the flags being burned is obviously an Israeli flag.
Either that, or the Shia extremists could not stop themselves from insulting and threatening Israel while hacking a Sunni-owned website.
Although Al Arabiya is owned by Saudis, it employs both Sunnis and Shia. Its stated goal - and in my experience they mostly do so, albeit from a distinctly Middle Eastern perspective, which often seems quite ‘progressive’ to Westerners - is to be moderate, balanced and objective.

What America is Missing

Goodness, look at this! A political figure boldly standing up and answering real questions with real answers and solving real issues! People speaking their minds, even when it means getting angry or hurting someone else's feelings. They get to the truth. That's what we're missing in America today. Bush wouldn't last two minutes in this place!

Democracy...!!

Hillary sent me

President Clinton campaigns for Obama-Biden in Orlando on 10/1/08.

HELLARY SENT ME BUTTON

Hillary sent me to vote for Obama buttons. Cool 2008 election buttons for Clinton supporters voting for Barack Obama. Original Hillary voters for Obama bumper souvenirs and buttons. Cool buttons for smart women vote on issues, not gender.

Homer Simpson tries to vote for Obama

Homer Simpson tries to vote for Obama in the '08 election...

Why The Patriot Act of Finance Failure Prevents Dictatorial Control

So for those who are sitting in their soon-to-be-foreclosed-on homes financed with FHA or subprime mortgages, a little bit of righteous indignation seems to be in order over therejection of The Bush Bailout Plan by Congress. That was your ticket out, right? Big deal if you bought a house you knew you couldn’t afford with taxpayer subsidies! You’re entitled to a rescue! Well, you might want to keep your shirt on for the moment, unless that was purchased with make-believe credit, too. The bailout plan put before Congress isn’t exactly something that would’ve been good for America. The plan contained a very sly stipulation that would’ve given Treasury Secretary Henry Paulson more power than God.

What They Tried to Sneak By

At face value, “bailout plan” sounds well and good to those who have no objections to socialist economic policies. Ah, but the plan was not so benign. The law contained the following insidious and downright frightening provision: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” Translation: Henry Paulson can do whatever the hell he wants. To a lesser extent, so can his agency at its “discretion.” But beware-discretion is soon to be the new fascism.

Recap on Dictators

Under the bailout plan that Congress had the good sense to shut down, Henry Paulson would have basically been allowed to make unilateral decisions, all while enjoying the unparalleled pleasure of an accountability-free reign. He could rule with an iron fist, toying with the nation’s economic equilibrium, and no one would be able to say a word. So let’s recap how this kind of dictatorial strategy has fared throughout history. Consider the following rip-roaring success stories and all-around just nice guys:

• Benito Mussolini
• Adolf Hitler
• Fidel Castro
• Kim Jong II
• Henry Paulson (still in a dictatorship intern program…full honors come with the next bailout plan)

So What’s the Patriot Act Got to Do with It?

Sometimes “crises” force politicians to do foolish things. Even more so than usual. For example, 9/11 was the impetus for the Patriot Act, which also managed to completely circumvent court oversight. Abuses of power and a sort of extreme-sports eavesdropping went down, and the bill managed to totally buck any kind of judicial review. Thus, the scuttlebutt has pegged the defeated bailout plan as the Patriot Act of finances. And, really, who could argue? This moment calls for a cliché: absolute power corrupts absolutely.

We Have to Blame Someone

The government is an easy whipping boy when economic hard time strike. The media creates what I like to call a CINO (a crisis in name only), people panic, causing the market to take a dive, and, because it’s an election year, suddenly politicians are in a feverish frenzy to “fix” the alleged crisis. But, honestly, has the government ever really fixed anything?! Government attempts to correct the market always fail miserably, as do most government plans to remedy situations. It’s like when the dishwasher would break in your house, and your dad, eager to demonstrate his mechanical prowess, would refuse to call a professional and instead try to fix it himself. Before you know it, you’re sleeping on a mattress of dirty dinner plates, the kitchen’s on fire, you can’t find the dog, and the whole fiasco ends up costing you more, in stress, money, and time, than it would’ve if your dad had just stayed out of it.

Like it or not, we’re sticking with the dishwasher analogy. In the case of our economic “crisis,” the professional dishwasher repair man is what the father of modern economics, Adam Smith, called “the invisible hand.” Notice that he did not say the very visible hand (or iron fist) of Henry Paulson, Barack Obama, or Dubya (God love him). The market naturally goes through vicissitudes-ups and downs that are part of the economic cycle. What really screws the economy up is when Dad, representing almost any politician today, comes along and tries to fix something he’s incapable of fixing and probably had a role in breaking in the first place. A Henry Paulson dictatorship is not going to fix the economy. Remember “laissez-faire,” that vaguely familiar term from high school econ and the cornerstone of capitalism? Literally, it means, “let do.” In other words, leave it alone, Henry Paulson. Leave it alone, George W. Bush. Leave it alone, two buffoons who are running for president.

New Leadership: Our Economic Savior?

The current administration has taken its best shot at the economic crisis, and I use the term loosely, and failed. Congress rejected the plan, thankfully, but, had the bill passed, the equivalent of the Patriot Act of finances would have been upon us. I’m going out on a limb here, but Henry Paulson dictating monetary policy with unbridled power may not be the answer. So what IS the answer?? New leadership? Doubt it. Let’s evaluate John Sidney McCain III and Barack Hussein Obama II on this issue.

John McCain has entered Congress in 1982. His career in the Senate began in 1987. Age-wise, John is in his early hundreds. The point: McCain has had ample time to “fix” and perhaps even foresee this crisis, but he has seen fit to do so only in the month before a presidential election in which he is the Republican nominee. Something smacks of political expediency, wouldn’t you say? You have to remember when politicians throw around phrases like “suspending my campaign to fix the economic crisis,” this really can just be summed up in one word: gimmick.

Now onto the political Messiah, Barack Obama. First, recall that one of the biggest disasters that kick-started this economic panic was the failure of the Lehman Brothers, whose collapse was traced to corruption and abject stupidity at Fannie Mae and Freddie Mac. These two massive mortgage banks continued to survive, doling out loans to deadbeats who were clearly terrible credit risks to begin with, but how could any business manage that? The answer: political contributions. Fannie Mae and Freddie Mac were bedfellows with a number of senators in order to keep their unsound and floundering business afloat. Now guess the politician who received the second-largest amount of political donations from these banks, despite having only been in the Senate for four years. None other than Barack Obama.

Bottom line, we don’t need Dad, Obama, Bush, Paulson, or any other politician fixing our economic dishwasher. We have one Patriot Act, and that’s plenty.

Economic Crisis

This video is an insightful look into the causes of our current economic crisis, which has its roots in policy developed 13 years ago.

What Caused Our Economic Crisis

This video is an informative look at the factors that are causing our current financial and economic crisis. It discusses policy changes 13 years ago that unleashed the sub-prime mortgage-backed securities market, which accelerated prices erratically, inviting speculation and loose lending practices which were both condoned and encouraged by existing regulation and carried out by risk-blind executives and Fannie Mae and Freddie Mac.