In The News

Islamic Bond Decree Cripples Sukuk, Imperils Projects

Haris Anwar September 5, 2008
Strict interpretation of Islamic law discourages interest payments associated with debt. Banks in fast-growing areas of the Middle East, like Dubai, created a special group of bonds – or sukuk market – described as Shariah-compliant, which allow payment through the exchange of assets rather than money. Bonds, as instruments of debt, raise capital and spur development of property, and unlike...

US and Global Economies Slipping in Unison

Peter S. Goodman August 28, 2008
Reckless real-estate lending and a credit crisis in the US have led its consumers to purchase fewer foods in the global marketplace, which in turn slows foreign investment within US borders, reports Peter Goodman for the New York Times. “Overseas demand for American goods and services was supposed to continue compensating for waning demand in the States,” Goodman writes, reporting on the...

Bailing Out Economies

Nayan Chanda August 1, 2008
Capital is mobile, seeking profit, and it moves to countries where the returns are higher, with no regard for immobile workers, explains Nayan Chanda in his column for Businessworld. Flush with cash, foreign investors in search of safe havens invested in bonds issued by US government-sponsored mortgage lenders, Freddie Mac and Fannie Mae. With the bonds not as safe as advertised, the US...

Zimbabwe Can't Paper Over Its Million-Percent Inflation Anymore

Marcus Walker July 9, 2008
After losing a March election, Robert Mugabe clung to power in Zimbabwe and his supporters relied on irregularities and violence to discourage the opposition. German politicians have been among the most outspoken in rejecting Mugabe’s refusal to transfer power – and quickly pressured a Bavarian printing company to stop providing expensive blank notes used for printing money to Zimbabwe. With...

Globalized Inflation

Joachim Fels June 20, 2008
Intricate connections between global economies – including trade treaties, exchange rates and foreign investment – prevent individual nations from completely controlling how their individual economies are molded. Low US interest rates have fueled a credit crisis and inflation so drastically as to render ineffective any region’s effort to staunch inflation. The inability of other regions, like...

Globalization’s Aftershocks

Temma Ehrenfeld April 29, 2008
The new world order born out of the fall of the Soviet Union triggered fundamental changes in the global economy, many out of the reach of government regulation. Italian economist and author Loretta Napoleoni, in an interview with Newsweek, defines this trend of trade in unregulated markets as the rise of “rogue economics” – including black market sales, poaching of fish or rare species, as well...

Irrational Exuberance to Bust: Financial Bubbles Demand Regulation

Kemal Dervis April 23, 2008
As the financial sector has gained dominance in the world economy, some investors have become accustomed to steady growth and double-digit profits. While the financial industry rewards efficiency and innovation among competing firms, the relentless quest for profits and a short-term mentality in some finance circles have contributed to a series of asset bubbles: the Asian-Russia financial crisis...