Wednesday, January 19, 2011

Who is the next............Tunisia.................

Change has arrived “New Political Reality in North African Arab World”

Food Riots in North African Arab World

There are riots in many African Countries recently. Especially the riots have significance looking at the strategic importance of these countries to the west, Algeria, Tunisia, Morocco, and Egypt. These are the countries who are staunch supporters of the western powers and all of them has key role in crushing Islamist. These are the dictators enjoying powers for long time with the help of their western allies in return for so called war on terror efforts. They remain in powers years after years without much growth and development to the nation.

Now youths are angry and want justice. They are angry because they don’t have work, employment, and growth opportunity. The prices are rocketing high and affording anything is difficult. Under these circumstances they are asking for justice from these corrupt regimes supported by their western allies for their own benefit. There are many dimensions to the crisis and none of them are really in the hands of single country in this Globalised environment”.

The famous columnist of Al Jazeera Television Channel Mr. Marwan Bishara writes “The so-called international community has been traditionally silent about totalitarian practices and abuses within its member states, except in cases where certain Western countries or powers have invoked questions of regime oppression either as a tool of foreign policy or championing the cause of human rights for public consumption.

Arguably, the neoliberal economic opening to Western investments has played no small part in the deterioration of the economic situation in Tunisia and other Arab countries.

So that when those regimes, as in Tunisia, co-operated with their Western counterparts on economic or strategic issues, their abuses of power have been generally ignored.

Politics: Algerian President Bouteflika led his country out of the civil war that broke out when Islamists were denied an election victory; since the 1990s.

Economy: Algeria is a key oil and gas supplier

In 1992 a general election won by an Islamist party was annulled, heralding a bloody civil War. However, poverty remains widespread and unemployment high, particularly among Algeria's youth. Endemic government corruption and poor standards in public services are also chronic sources of popular dissatisfaction.

Major protests broke out in January 2011 over food prices and unemployment, with two people being killed in clashes with security forces. The government responded by ordering cuts to the price of basic foodstuffs.

Algeria has seen three days of unrest over the rising costs of living and unemployment, which government figures show standing at about 10 per cent, but which independent organizations put closer to 25 per cent.

Layachi Ansar, professor of sociology at Qatar University, told Al Jazeera that the cutting of food taxes and duties was "a superficial measure" that doesn't address "the deep crisis" going on in Algeria, connected with the "unequal distribution of wealth - this wealth is spoilt by corruption, by bad governance and lack of accountability of government officials and state civil servants".

'Out of control'

Mohamed Ben Madani, editor of The Maghreb Review, said the situation was "out of control" and that the protests could continue for weeks.

Mohamed Zitout, a former Algerian diplomat, told Al Jazeera: "It is a revolt, and probably a revolution, of an oppressed people who have, for 50 years, been waiting for housing, employment, and a proper and decent life in a very rich country.

"But unfortunately it is ruled by a very rich elite that does not care about what is happening in the country - because they did not give people what they want, even though the government has the means to do so, the people are now revolting."

If we look at the other side of the story why this all is happening. Even though economy is slow, there is enough food for everyone and prices are going UP.

According to World Bank “The world economy is moving from a post-crisis bounce-back phase of the recovery to slower but still solid growth this year and next, with developing countries contributing almost half of global growth, says the World Bank’s latest Global Economic Prospects 2011.
The World Bank estimates that global GDP
[1][1], which expanded by 3.9% in 2010, will slow to 3.3% in 2011, before it reaches 3.6% in 2012. Developing countries are expected to grow 7% in 2010, 6% in 2011 and 6.1% in 2012. They will continue to outstrip growth in high-income countries, which is projected at 2.8% in 2010, 2.4% in 2011 and 2.7% in 2012.

Global Stock Market Performance in 2010

The following are some of the key points from a review of the 2010 performance of equity markets around the world:

Stock markets can rise despite low or poor economic growth. The U.S. market was a perfect example of this scenario. While the U.S. economy continued to struggle last year with high unemployment rates, slowing demand, more bank failures and other negative events, corporate profits rose and equities took off ending the year with double-digit returns for the S&P 500.

It was a very good year 2010 for many markets with amazing returns. India gave a 16% odd returns in 2010. The MSCI Emerging Markets Index (+16.4%) had done enough earlier in the year to outperform the MSCI World Index (+9.6%) by a wide margin for the year as a whole.

FAO food price indices

The FAO Food Price Index in December slightly surpassed its peak of early summer 2008. The indices of sugar and oils and fats increased the most.

o In Asia, domestic prices of rice further strengthened in December and are at record levels in several countries.

o Prices of wheat and wheat flour in importing countries of Asia, Latin America and Africa, remained at high levels.

In December 2010, the FAO Food Price Index averaged 215 points, 1 point above its peak in early summer 2008. The highest increases were recorded for the Sugar and Oils and Fats price indices. The December 2010 index was up 25 percent from December 2009. The Cereal Price Index rose to 238 points, up as much as 39 percent from December 2009.

Why this rise:- If we look at the present global scenario and prices going, there is big gap between what it should be and what it is. When economy is really not growing, poverty is increasing, food supply is enough………still Prices are going up………. The reason is not poor got more money to eat more unfortunately according to George W Bush ex US president when he Said “ India and China eating more”, and according to recent statement of Indian Prime Minister Dr. Manmohan Singh, economist himself and beloved US follower “ because people got more disposable income so prices are rising.” Unfortunately this can not happen, when people spent more they spent more on cream and not the basic staple food, in fact basic consumption of staple food goes down. The answer lies in the Commodities market! 24/7 casino’s played across the world to make money and make more people hungry and deprived.

The price of traded food staples such as wheat, corn and rice soared 26 percent from June to November, nearing the peaks reached during the global food crisis of 2008. According to the UN Food and Agriculture Organization, 925 million people worldwide suffered from hunger in 2010, an increase of about 150 million since 1995-97. One third of children in the so-called developing world are malnourished.

The new explosion in commodity prices is being fueled by the cheap credit policies of governments and central banks in Europe, Japan and, above all, the United States, where core short-term interest rates remain near zero. The Federal Reserve in November announced that it would purchase $600 billion in US Treasury securities by, in effect, printing dollars. This cheap-dollar policy has the effect of debasing the world’s primary trading and reserve currency, thereby fueling inflationary tendencies around the world and increasing the flow of hot money to emerging economies with faster growth and higher interest rates.

In the US alone, corporations and banks are sitting on some $3 trillion in cash which they refuse to invest in production and hiring. A good portion of the global surfeit of cash is being used to ramp up the prices of commodities from oil, copper, cotton, gold and silver to food staples such as wheat, corn, rice and soybeans.

A major factor in the rise in corn prices is the diversion of a third of US corn production to the more profitable production of ethanol in 2010.

In the United States, which harvested 416 million tonnes of grain in 2009, 119 million tonnes went to ethanol distilleries to produce fuel for cars. That’s enough to feed 350 million people for a year.
The combined effect of these growing demands is stunning: a doubling in the annual growth in world grain consumption from an average of 21 million tonnes per year in 1990-2005 to 41 million tonnes per year in 2005-2010. Most of this huge jump is attributable to the orgy of investment in ethanol distilleries in the United States in 2006-2008

In the past four months, the Silver has risen 51 percent to a series of 30-year highs, before inflation. It closed last week at $29.31 a troy ounce, as compared to $16.822 at the beginning of 2010―a rise of 74 percent. Wall Street Journal writes “Of the general surge in commodity prices, the Journal wrote: “Prices are rising despite over-supply and a lackluster recovery in industrial demand. Many analysts expected those factors would keep a lid on prices in 2010. What they didn't expect was an overwhelming flow of money into the market from investors eager to ride a commodity rally.”

FOOD PRICES AND INFLATION

If all the food in the world were shared out evenly, there would be enough to go around. That has been true for centuries now - if food was scarce, the problem was that it wasn't in the right place.

The poor, urban multitudes in these countries (including China and India) spend up to half of their entire income on food, compared with only about 10 per cent in rich countries.

When food prices soar, these people quickly find that they simply lack the money to go on feeding themselves and their children properly - and food prices now are at an all-time high.

Unfortunately we live in world which does not understand logic and rationales. Only vested interest of Global Powers and Power Brokers and lobbies prevail. No one care how many will die of hunger and poverty.


Wednesday, January 12, 2011

OH ALLAH FORGIVE

OH Allah Forgive .


Australia Flood Disaster


OH ALLAH MOST BENEFICIENT and MOST MERCIFUL FORGIVE US FOR OUR SIN.

Our Lord! Thou art indeed Full of Kindness, Most Merciful. [59:10]

Our Lord! Condemn us not if we forget or fall into error [2:286]
Our Lord! In Thee do we trust, and to Thee do we turn in repentance: to Thee is (our) Final Goal [60:4]
Our Lord! Make us not a (test and) trial for the Unbelievers, but forgive us, our Lord! for Thou art the Exalted in Might, the Wise. [60:5]
Our Lord! Perfect our Light for us, and grant us Forgiveness: for Thou hast power over all things. [66:8]

"And the Firmament has He raised high, and He has set up the Balance (of Justice), In order that ye may not transgress (due) balance, so establish weight with justice and fall not short in the balance." Quran Surah Rahman: Ayah 7-9:

Allah has created this world in balance and justice but our deeds messes it. These deeds vary from personal life, our social behaviors, and our economic and political activities. If we see at the financial crisis world is in, this is very clear example". Today people wants to transfer the risk, this will never work. What we are in "Financial Crisis" is ultimately result of not sharing the risk but transferring it to other. This is because we transgressed our limits on balance and justice. If we want to change, we need holistic approach to change our lives, then and then only justice and peace can come to the world. If we want to change this world, it must come from within first.


La illaha illa Anta Subhanak, inni kuntu min adh-dhalimeen
There is no God but You; Glory be to You, Truly I have been one of the wrongdoers. [Surah al-Anbiyah, 21: 87


OH ALLAH, You are the Rabbul Aalmin, You are sustainer and most merciful, forgive us, definitely we are transgressor. All the wealth which is below the earth and above it all belongs YOU and we all will come back to you.

O Allah! Forgive me my faults, my ignorance, any excesses in my matters and in that which You have more knowledge of than me. O Allah! Forgive me my sins done in jest, those done mistakenly, those done intentionally and all those shortcomings that are within me.

Our Lord! We have wronged our own souls: If thou forgive us not and bestow not upon us Thy Mercy, we shall certainly be lost. [7:23]

Our Lord! Make us not a trial for those who practise oppression; And deliver us by Thy Mercy from those who reject (Thee) [10:85-86]

Our Lord! Avert from us the Wrath of Hell, for its Wrath is indeed an affliction grievous,- Evil indeed is it as an abode, and as a place to rest in. [25: 65-66]
Allah states, “We seized Pharaoh’s people with years of drought and scarcity of fruits, so that they would hopefully pay heed. (Quran: 7:130) and “We sent down on them floods, locusts, lice, frogs and blood, which are clear and distinct signs, but they proved arrogant and stuck to their evildoings.” (Quran: 7:133).
Quran (7:80-81) describes it: “And Lot/Lut asked his people if they committed an obscenity not perpetrated before them by anyone in all the worlds. Lut told the people of the tribe that they had lust for men instead of women, dubbing them a depraved lot.”
Allah further says:
“We rained down a rain upon them. See the final fate of the evildoers!” (Quran, 7:84) and “We will bring down on the inhabitants of this city a devastating punishment from heaven because of their deviance. We have left a clear sign of them behind for people who use their intellect.” (Quran, 29:34-35)

We use and exploit YOUR resources, minerals, oil, gas and everything which in the earth and on the earth, the forest sea and water. But make poor suffer from hunger and death.

Poverty ON RISE


Quran Maun - 1-7] Have you seen him who belies the rewards and punishments of the Hereafter? He it is who drives away the orphan and does not urge giving away the food of the poor. Then woe to the praying ones, who are careless of their Prayer, who do good to be seen, and withhold small kindnesses (from the people).
And urges not on the feeding of Al-Miskîn (the needy),]

POOR AT RECEIVING END OF DEVELOPMENT


Another characteristic of those who deny the Recompense is that they do not feed the poor and the needy and do not urge one another to help the helpless of the society. Muslims who have means have been commanded to feed the poor and the needy and encourage one another to help them.
Narrating the great virtues of helping the weak members of the society, the Prophet said:
“The one who looks after a widow or a needy person is like a Mujâhid (fighter) who fights for Allah’s Cause, or like him who performs prayers all the night and fasts all the day.” [Narrated by Al-Bukhari]

FOOD RIOTS

And withhold Al-Mâ'ûn (small kindnesses).]
This verse means that those who deny the Recompense do not worship Allah well, nor do they treat His creation well. They do not even lend that which others may benefit from and be helped by, even though the object will remain intact and be returned to them (like an axe, a pot, a bucket and similar items). These people are even stingier when it comes to giving Zakat (obligatory charity) and different types of charity that bring one closer to Allah. [Tafsir Ibn Kathir]
[39:51] They suffered the consequences of their evil works. Similarly, the transgressors among the present generation will suffer the consequences of their evil works; they cannot escape.
[39:52] Do they not realize that GOD is the One who increases the provision for whomever He chooses, and withholds? These are lessons for people who believe.
The first wealth is also very attractive to the nature of mankind, thus every man inclines to have wealth as Allah says, "Fair in the eyes of men is the love of things they covet: women and sons; heaped-up hoards of gold and silver; horses branded (for blood and excellence); and (wealth of) cattle and well-tilled land. Such are the possessions of this world's life; but in nearness of God is the best of the goals (to return to)" (Qur'an 3:14).


FEED POOR _ HELP THEM YOU WILL BE BETTER


WARNING:- DON’T TRANSGRESS THE BOUNDARIES, OPPRESSION, EXPOITATION,INJUSTICE WILL BE PUNISHED HERE AND HEREAFTER. THE POWERFULL WHO ARE USING THE WEALTH BESTOWED ON THEM TO DESTROY THE BALANCE IN THIS WORLD AND LIVES OF THE POOR PEOPLE BY HUNGER AND INJUSTICE WILL BE PUNISHED. THIS MAY ECONOMIC OR ECOLOLOGICAL.






Friday, November 5, 2010

India's Growth - Where is poor going............

India Capitalist Way
India is growing and growing very fast but where is its poor going...........unfortunately I am not able to see. Stock market is zooming, how many indians are investing in it. When world's biggest capitalist is coming to India, at this time the most important question the government must answer .. " Where its commitment lies?".

Unfortunately this goverment may be good for rich, but with all words of development poverty is rising. If India fails to include its poor in growth and development, then it is going to be disastar for the nation.

Unfotunately present government with all its rhetoric for inclusive growth fail to include the poor in this story of development. Life and its affordability becoming more and more difficult for poor.

Healthcare, drinking water and electricity, housing , sanitation all are absent in rural India. Electricity comes occasionaly and yes no water in summer. Malnutrition Childs are highest here.

India's Hungry
Without taking all together, growth can not be servived.

Water Conservation and Agriculture and village industries should be the pririty of the development.

Privatisation ............ or selling of old assets of nation can't solve the real problem.

New paradigm of development is must....... which includes all sections of societies.

Thursday, April 29, 2010

God's Own Work@Goldman Sach

This is unending love story of capitalist economy called “Financial Crisis”. How the Wall Street and biggies of Wall Street loves money, and how much they love it. They have given this name “God own work”. They are doing God’s own work by cheating and defrauding. Making richer more rich and poor …………… poorer. This is called God’s Own Work in their words. But unfortunately this is exactly the definition of Capitalism. The whole concept of free money, free economy, without control and restriction and governance is what Capitalist Want.

If we look at whole financial crisis we can very easily say that the core reason is manipulation, and cheating, which they named structuring. Structuring of financial product, derivatives and swaps in such a way which nobody can understand.

Goldman Sach is being investigated for fraud, but the list is very long. The Greek debt by Goldman Sach should also be considered as cheating and their role in collapse of Lehman Brothers must also be investigated.

When I have gone through whole document of evidence and financial crisis I came to the following conclusion.

Financial Crisis

Financial Crisis, world has seen the big names of finance and banking no more exists, they are gone and gone for ever. Because of the financial melt down, more people has gone into poverty and more people finding it difficult to meet the both ends. What is problem and who is responsible for, and what is the alternative and long term solution.

What is problem?

The problem lies in the system where making money from money at any cost is sole objective called as capitalism. The specific reason related to the financial crisis is as below.

Institution and Product

  • Financial Crisis and collapse of financial industry, moral hazard is the core of the causes.
  • Securitization eliminates the incentive for the originator of the loan to be credit sensitive... With securitization, the dealer (almost) does not care as these loans can be laid off through securitization.(called a ‘‘moral’’ hazard). The originating banks replenished their funds, enabling them to issue more loans and generating transaction fees.
  • Credit rating agencies having given investment-grade ratings to MBSs based on risky subprime mortgage loans. However, there are also indications that some involved in rating subprime-related securities knew at the time that the rating process was faulty. ( moral hazard)

· The Bank of International Settlements, which seems to be the only institution that tracks the derivatives market, has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional/OTC derivatives. And a look at their massive exposure shows that even a small miscalculation or stumble in the capital markets could be a recipe for unprecedented disaster. The majority of the $1.28 quadrillion in derivatives are “owned” on somewhere near 95 percent margin!

“Reason for Financial Crisis in Short”

o Unethical Practices and Moral Hazard

o Securitization and speculation

o Paper Currency

o Derivatives and Structured Products

If we look at the core of the financial crisis, it all started with unethical practices of lenders/banks to lend the money who can not afford it. These bankers are only interested in getting processing fees and placement fees and making money on it. They bundled these entire low quality loan into securities, and sold to the market. Most importantly rating agencies rated these securities wrongly to get good rating. Then market players sold CDS and Interest rates swaps on them based on these rating. Then speculators played on these securities to generate profits.

When it comes to commodities I can say securitization of commodities market and derivatives played by the speculators are the sole reason for the high prices of commodities across the world. Derivatives are the other reason of collapse. Role of paper currency is another very important issue at the center of financial crisis. These papers currencies which do not have any weight themselves has become most important tool of the speculators, derivatives, currencies and their casino’s has played key role in financial crisis. Securitization and securities market has become the 24 hour casinos for the speculators who play on 95% barrowed money. (Commodities, currencies and derivatives)

Why not Auditors and Credit Rating Agencies?

But a crucial question remains that has not had much exposure: where were the auditors? Unqualified audit reports up to the collapse had concluded that the directors’ reports and accounts reasonably reflected reality.

Role of auditors:

Auditors have contributed to the crisis by accepting directors’ “mark-to-market” valuation of trading assets, when some basic questions would have shown them that those directors (i) hadn’t the remotest clue what was in the mortgage / loan packages they had acquired; (ii) were utterly bemused by the nature of the complex derivatives on which their asset valuation rested; and (iii) knew that there was no market to “mark” to.

Derivatives are central to the demise of Lehman. Its annual accounts mention derivatives contracts with a face value of $738bn and fair value of $36.8bn.

UK forensic accountant Richard Murphy says: "The fundamental question is how accountants got away with changing rules of accountancy, which state they don't have to assess the valuation of assets underlying the assets on a balance sheet. How did they get away with changing the audit rules?"

The Role Played by Credit Rating Agencies

Flaws in rating methodologies were the major reason for underestimating the credit default risks of instruments collateralized by subprime mortgages.

The governance of credit rating agencies did not adequately address issues relating to conflicts of interests and analytical independence.

Rating process needs to be optimized
Looking back at market developments and rating activities during the past few months, it becomes clear that a number of factors have adversely affected the quality of the work done by CRAs:

Tuesday, December 15, 2009

Jane Wells: Viva Las Vegas? Keep Watching CityCenter - CNBC

Jane Wells: Viva Las Vegas? Keep Watching CityCenter - CNBC

This is the real Dubai World. The leader of Gambling in the world. Those who do not understand Islamic Finance Should not certify. The shariah Scholar who certified Nakheel and its Parent Company Dubai World must answer this.

These Sukuk voilates first principle of Islam i.e. Maqasid Al Sharia. The income or rent Sukuk holders has received is basically from Prohibited Businesses i.e. Haram Activities ( Alcohol, Pork, Gambling, Dancing and Prostitution.). The income and guarantee of income from Haram Sources are Haram. All the income received by Sukuk holder therefore is haram and must be cleaned.
Structures and Contract are two essential things but what is more important is business model which should not voilate Maqasid Al Shariah. Even if the structure and Contract are valid but Business Model voilates Maqasid Al Shariah and indulges into Haram such structures and contracts are void. It is very important that complete value cycle of the product must be shariah compliant. The income from such void contract is Haram.