Economic Crisis Updates and Discussions

[Venom]

Originally Posted by Dry Ice

The economy is so bad that:

• I got a pre-declined credit card in the mail.
  
• I ordered a burger at McDonalds and the kid behind the counter asked, “Can you afford fries with that?”
  
• CEO’s are now playing miniature golf.
  
• If the bank returns your check marked “Insufficient Funds,” you call them and ask if they meant you or them.
  
• Hot Wheels and Matchbox stocks are trading higher than GM.
  
• Parents in Beverly Hills have fired their nannies and learnt their children’s names.
  
• A truckload of Americans was caught sneaking into Mexico.
  
• Exxon-Mobil laid off 25 Congressmen.
  
• Dick Cheney took his stockbroker hunting.

And finally:

Congress says they are looking into this Bernard Madoff scandal. Oh, great!! The guy who made $50 Billion disappear is being investigated by the people who made $1.5 Trillion disappear!

The Economy, How Bad Is It? | Steve Keen's Debtwatch

they serve u twix on a flight instead of a full meal...that happened with me :)

[Dry Ice]

IMF: Middle East economy weathered global crisis

By Nathanael Massey
Special to The Daily Star
Wednesday, October 14, 2009

BEIRUT: The Middle East has proven surprisingly resilient to the world economic crisis, due in large part to countercyclical governmental spending, according to the International Monetary Fund’s Regional Economic Outlook report for October 2009. The report was presented Tuesday by Saade Chami and Eric Mottu of the IMF, along with Saad Andari, Vice Governor of the Banque du Liban.

“When we say that the impact of the crisis was lessened, we do not mean that Middle Eastern states were untouched,” said Chami. “Rather, we mean that the effects could have been much worse.” The prudent measures taken by regional governments allowed economies to continue functioning despite enormous obstacles, he said.

The economic crisis led to a sharp drop in oil prices, the major source of capital inflow for Gulf states. In response, oil exporters implemented expansionary fiscal policies and drew on substantial reserves built up prior to the crisis, allowing their financial sectors to continue functioning while lessoning the impact to the broader economy, according to the report.

“The use of reserve buffers … by oil exporters mitigated the impact on their own economies and generated positive spillovers for their neighbors,” said IMF Middle East Director Masood Ahmed, speaking at the original release of the REO report. “The crisis has also shown the need for continued efforts to strengthen oversight to reduce the vulnerabilities of financial markets in the region.”

Lebanon’s economy is closely tied to the Gulf in multiple sectors, foremost in banking. In addition, Lebanon’s economy relies heavily on remittances – which account for 20 percent of the national GDP – from Lebanese abroad, the majority of whom work in the Gulf.

The onset of the economic crisis sparked fears by analysts that troubles in the Gulf could have a catastrophic impact on the Lebanese economy, but as of yet those impacts have been relatively minimal. GDP growth slowed in 2009, but is still strong.

The Lebanese economy was supported as well by measures undertaken by the banking sector, Mottu said. “The response of Lebanon’s banks was both swift and appropriate, and should be taken as a model by other countries,” he said.

Lebanon’s banks hold a large part of their capital in reserve and do not invest in derivatives to the same extent as banks in other countries. Derivative markets declined sharply during the crisis.

The crisis “has revealed some vulnerability in the region’s financial sector,” according to the IMF report, specifically in terms of weak risk management systems and over-leveraged institutions. Improvement in these areas will be crucial to safeguarding the system against future shocks, it said.

The countercyclical spending by oil exporters led to a sharp reduction in national account surplus. However, the IMF predicts that reserves will rebound in 2010 thanks to rising oil prices and a rebounding world economy.

The national account balance for Qatar, for example, dropped from $28.5 billion to $10 billion in 2009, but is estimated to rocket to $32 billion in 2010. Lebanon’s account balance is negative, due to it’s high national debt, but its level has not changed dramatically during the crisis.

Merchandise exports and foreign investment have been the hardest-hit sectors of the economy. The report estimates that these sectors declined by as much as 32 percent in 2009. Tourism receipts and remittances are also lower.

The IMF report states that the current priority for Middle Eastern economies is financial market development and diversification beyond bank-based economies. Employment for the Middle East’s rising population of youth is also a major priority.

[Dry Ice]

By Dana Halawi
Daily Star staff
Wednesday, October 21, 2009



BEIRUT: The global financial crisis has had a positive effect on the world tourism industry said Rotana CEO Selim al-Zyr who noted supply was beginning to exceed demand in the hotel industry. Zyr said that for a country with such a small population, Lebanon’s 75,000 rooms were highly disproportionate. She noted that Las Vegas, with its larger population and number of tourists, only has 80,000 rooms. “This correction therefore was necessary,” she said.

Her remarks came during the opening of Raouche Arjaan Hotel in Beirut on Tuesday in the presence of the director general of the Tourism Ministry Nada Sardouk.

The hotel is operated by Rotana, which is a leading hotel management company that manages a portfolio of 68 properties throughout the Middle East with an aggressive expansion plan.

The hotel, which targets both the leisure and business sector, is comprised of 176 studios and suites with state-of-the-art amenities and recreational facilities, including a rooftop swimming pool and a health and fitness center.

Sardouk expressed her admiration for Rotana’s leading position in the hotel management industry in the Middle East and North Africa and emphasized the importance of Rotana properties’ contribution to the rise in tourism and economic welfare in Lebanon.

“We are working on increasing investments in the country. We have discussed with the government the possibility of issuing legislation that would facilitate investments in hotels in the country. We have also been working on issuing laws that would encourage the establishment of small- and medium-sized enterprises in Lebanon,” said Sardouk.

She cited statistics issued by the World Tourism Organization, saying that each new hotel room contributes to the employment of three people. “It is necessary to open hotels in Beirut and other areas as well such as in the Metn and Kesrwan which have not yet received loans for rehabilitation,” she said.

The tourism sector in Lebanon attracts $7 billion in investments a year, and is capable of creating thousands of new job opportunities in the country. Moreover, an additional numbers of five-star hotels are scheduled to open in the coming few years, including the Grand Hyatt and the Summerland Kempinski.

Sardouk underlined as well the importance of opening 3 and 4-star hotels which are affordable to everyone because 32 percent of tourists who come to Lebanon do not use hotels but instead stay with friends and family.

[Dry Ice]

Recession unofficially ends as economy grows 3.5 percent

Reuters
Thu Oct 29, 2009

Analysts are hoping that the slowdown in the inventory decline by businesses will continue to support the economy in the fourth quarter, even as consumer spending is expected to retreat under the weight of the worst labor market in 26 years.

Excluding inventories, GDP rose at a 2.5 percent rate compared to a 0.7 percent increase in the second quarter.

The weak dollar boosted exports, but a rise in imports subtracted from real GDP during the quarter. Federal government spending contributed to growth, but both state and local governments were a drag.

Business investment fell at 2.5 percent pace, with investment nonresidential structures dropping 9 percent, a reflection of ongoing problems in the commercial property market.

A separate report from the Labor Department showed the number of U.S. workers filing new claims for jobless benefits dipped by 1,000 last week to 530,000 last week.

Analysts polled by Reuters had forecast claims to fall to 521,000 last week from 531,000.

Continued claims of people still on jobless aid after an initial week of benefits slid by 148,000 to 5.797 million in the week ending October 17. It was the lowest reading since March.

[Dry Ice]

Al Sanea operated $10bn ‘Ponzi scheme’, says Al Gosaibi

The National
01 November 2009


Maan al Sanea, the head of the embattled Saad Group of Saudi Arabia, “operated one of the largest Ponzi schemes in history”, according to documents filed in a New York court.

“He fraudulently arranged for the borrowing of billions of dollars from dozens of banks, steadily increasing the loan levels year-by-year,” the filings allege. It is the latest legal broadside from the al Gosaibi family, which is locked in a bitter dispute with Mr al Sanea over what it claims is a US$10 billion (Dh36.73bn) fraud.

A Ponzi scheme is a type of fraud in which investors are paid out of illusory profits which are actually fresh money injected into the business by new investors. The most famous example is the $68bn fraud by the disgraced US financier Bernard Madoff.

The claim, which Mr al Sanea has denied, came amid a flurry of legal action in New York late last week. The al Gosaibis made fresh allegations against Mashreqbank of Dubai in the ongoing battle between them over $400 million in disputed foreign exchange transactions.

The al Gosaibis filed documents that they said supported their claim that Mashreq was aware of the fraud they said was perpetrated on them by Mr al Sanea and that the bank aided and abetted Mr al Sanea’s conduct. Mashreq has rejected these claims.

Lawyers for Ahman Hamad Al Gosaibi and Brothers claimed to have unearthed fresh evidence of long-term collusion between Mr al Sanea and Mashreq. According to documents submitted by Al Gosaibi, in June 1999, Adel al Mannai, an officer of Mashreq in Bahrain, wrote to Mr al Sanea advising him that Mashreq “would like to start a relationship with the group and will contact you on my next visit to Al Khobar the Saudi city which is HQ that is home to both the Saad Group and Al Gosaibi to discuss in more detail areas of co-operation”.

The filings cast doubt on the nature of foreign exchange transactions between Mashreq and Al Gosaibi. These were, in fact, “short-term loans”, Al Gosaibi alleges, rather than genuine foreign exchange transactions, and were not based on genuine remittance business.

“The volume of forex transactions $4.97bn exceeded the volume of the remittance business $66.75bn by 75 times. The remittance business had nothing to do with the scheme, nor could Mashreq have thought that remitting money to foreign workers could remotely have approached the scale of these transactions,” said Al Gosaibi’s lawyers, the US firm of Baach Robinson and Lewis.

The filings also contain further allegations that Mr al Sanea committed forgery with Mashreq’s knowledge: “When Al Sanea directed employees to refuse to provide a notarised signature on loan documents, because the chairman of the Al Gosaibi company was comatose and could not sign, Mashreq agreed to waive the rules.”

In a statement, Mashreq responded: “The central facts in this case remain that the defendant, the Al Gosaibis, by failing to complete foreign exchange transactions totalling approximately $150 million, is in default of agreements with Mashreq, and we look forward to presenting our case to the court.

“As for Al Gosaibi’s allegations that its own organisation was riven with massive fraud and forgery, Mashreq saw no evidence of this, and at all times acted in good faith in dealing as a counterparty with Al Gosaibi. In making these claims, Al Gosaibi is trying to avoid its lawful obligations to Mashreq and the more than 100 other international financial institutions to which Al Gosaibi is now in default.”

In separate legal moves in New York, Mr al Sanea’s lawyers filed documents accusing Al Gosaibi of “forum shopping” – bringing actions in multiple jurisdictions around the world. They also disputed the jurisdiction of the New York courts as the appropriate arenas for the legal actions and argued that Saudi Arabia would be the best place to litigate the dispute.

Ian Edge, the director of the Centre for Islamic and Middle Eastern Law at the University of London’s School of African and Oriental Studies, said: “In my opinion, Saudi Arabia is the most appropriate forum – probably the only appropriate forum – for the settlement of this dispute. It maintains an effective judicial system that is fully capable of adjudicating commercial disputes.”

By Frank Kane © The National 2009

[Dry Ice]

GCC company earnings down 23% in Q3 - Markaz

by Andy Sambidge
arabianbusiness.com
Tuesday, 17 November 2009

Aggregate earnings of GCC companies continue to suffer amid the impact of the global downturn with Q3 results down by 23 percent so far, a new report showed.

Kuwait Financial Centre (Markaz) said that with 58 percent of companies declaring results so far, the aggregate results showed a negative growth of 23 percent across the region, compared to the third quarter in 2008.

It said the visibility was "very poor" for Kuwait with only 20 percent of companies reporting their earnings so far.

It added that there was an improvement on a sequential basis for Saudi Arabia with Q3 earnings higher by 8 percent than the previous quarter and with Q2 being 52 percent better than Q1.

"This is expected to impact the overall earnings direction for 2009 positively for GCC. Saudi Arabian earnings form 50 percent of the overall GCC earnings during normal years like 2007," Markaz said.

In Qatar, all the listed companies have declared their results for Q3 2009, with an average 17 percent decline on a year-on-year basis. In comparison to the second quarter the earnings have declined by 12 percent.

In the UAE, Markaz said 60 percent of companies have reported their Q3 earnings so far, with average falls of 17 percent.

"Among the sectors, the decline can be mainly attributed to the real estate segment in the UAE with a 74 percent decline in earnings for the nine months of 2009 compared to the same period in 2008. Banks in UAE also have suffered a decline of 23 percent," the report added.

[joe tayyar]

Nakheel in dubai to close soon.

Lots of real estate companies and contractors in dubai want from nakheel millions of dirhams, and they cant even pay little.
Nakheel will declare its bankrupt soon.

[Venom]

Originally Posted by joe tayyar

Nakheel in dubai to close soon.

Lots of real estate companies and contractors in dubai want from nakheel millions of dirhams, and they cant even pay little.
Nakheel will declare its bankrupt soon.

source.......!!