The House of Representatives defeated the White House’s historic $700 billion financial-rescue package — a stunning turn of events that sent the stock market into a tailspin and added to concerns that the U.S. faces a prolonged recession if the legislation isn’t revived.

The Dow Jones Industrial Average sustained its biggest point drop in history and its biggest closing decline since the day the markets re-opened after the Sept. 11, 2001, terrorist attacks. The Dow, which had opened sharply lower on fears of more possible bank failures, finished the day down 7%, with a 777.68 point drop to 10365.45. Losses to shares on the broader Dow Jones Wilshire 5000 index amounted, on paper, to $1.2 trillion — eclipsing the size of the proposed bailout package. The Nasdaq Stock Market finished down 9.1%.

Bailout Bombs in House

1:41

A $700 billion financial bailout plan failed 206-227 in the House, despite impassioned debate on the floor and urging for action from President George W. Bush. Video courtesy of Fox. (Sept. 29)

The widely watched VIX index, a measure of market volatility often called “the fear index,” closed at its highest levels in its 28-year history. In early trading in Asia Tuesday, Japan’s Nikkei was off 4.5%, and other markets also were down.

The 228-205 vote, which defied a full-court press from the president and the Treasury secretary, marked a dark moment in a month that has shaken the financial system to its core and forced the government to take a host of ad hoc measures to shore up confidence. Earlier Monday, U.S. authorities helped arrange the sale of Wachovia Corp. to Citigroup Inc., while the Federal Reserve joined other central banks in injecting more funds into credit markets.

The bailout was designed in part to get financial institutions lending again by ridding the market of the toxic mortgage-backed securities and other holdings that lenders fear could cause borrowers to default. If credit markets continue to seize, the impact on businesses and consumers could be widespread. Access to loans would be reduced, crimping spending and investment. Economists said the credit crunch could lead to increased layoffs in the U.S. and prompt a hefty rate cut from the Federal Reserve.

“The legislation may have failed,” said House Speaker Nancy Pelosi, a California Democrat. “The crisis is still with us.”

The bill’s failure puts the Treasury Department in a bind. Officials there considered the rescue plan as a last-ditch effort to come up with a systemic approach to tackling the financial crisis. The Treasury can take some incremental steps, such as expanding a program to buy mortgage-backed securities issued by mortgage giants Fannie Mae and Freddie Mac, or using other administrative tools. But none of these measures would be as comprehensive in tackling the problems at the heart of the financial system.

In lieu of legislation, Treasury is likely to revert to addressing problems institution by institution, according to a person familiar with the matter, while waiting to see whether Congress will revisit Monday’s vote. The government is likely to continue trying to extinguish fires by lending money to troubled institutions, aiming to prevent failures that could ripple through the financial sector. That could result in the government taking on the same toxic assets, but by a different route. The Federal Insurance Deposit Corp., which resolves failed banks, could also play a greater role.

“Our tool kit is substantial but insufficient,” Treasury Secretary Henry Paulson said after the bill’s failure.

Ever since Mr. Paulson unveiled the proposal two weekends ago, the rescue package had helped buoy financial markets. But it also sparked deep unease among lawmakers over what would be an unprecedented government intervention in the private sector.

The bill’s failure marks a stinging defeat for the nation’s political leadership. Both Republican and Democratic leaders in Congress and the White House had crafted an agreement over the weekend that was supposed to appease these simmering tensions.

But Monday’s vote split both parties, whose members had been barraged all week with angry messages from constituents who opposed the bill. Among Democrats, 140 supported the bill and 95 voted against. Support among Republicans, who had revolted against an earlier iteration of the bill last week, was at the low end of what was expected by the House Republican leadership, with 65 in favor and 133 against. One Republican, retiring Rep. Jerry Weller of Illinois, did not vote.

In voting against the bill, conservatives who opposed government intervention were joined by many Democrats facing tight races in November. Other no votes were cast by House members from poorer districts, including members of the Congressional Black and Hispanic caucuses.

Of the 18 Democratic and Republican incumbents in close races — classified “tossup” contests by the Cook Political Report — just three voted for the bill. All six freshmen Democrats in tossup races voted against the bill.

Congressional leaders said they intended to go back to work on the bill, with a new vote possibly late in the week after the Jewish holiday of Rosh Hashanah, which began at sundown Monday and runs through Wednesday night.

‘Calm Down and Relax’

But complex election-year politics make the outcome hard to predict. “We are going to continue to work,” said Rep. Steny Hoyer, House majority leader. John Boehner, his Republican counterpart, suggested there would be further efforts to change the bill. “We need everybody to calm down and relax and get back to work,” he said.

Democrats face a choice whether to continue work on a bipartisan bill or try to pass the bill with a majority of their party alone. That would likely mean reviving points that Republicans oppose, including an economic-stimulus package and a controversial provision that would allow bankruptcy-court judges to alter the terms of mortgages. For now, House Speaker Pelosi is committed to a “bipartisan bill,” a Democratic leadership aide said.

Following the bill’s failure, both parties embarked on a round of bitter finger-pointing. Congressional Republicans cited a speech by Ms. Pelosi on the House floor that blamed the economic crisis on years of Republican economic policies, including deregulation. “For too long this government, eight years, has followed a right-wing ideology of anything goes, no supervision, no discipline, no regulation,” Rep. Pelosi said. “It has created not jobs, not capital; it has created chaos.”

Rep. Eric Cantor of Virginia held up a copy of the remarks at a press conference held by Republican leaders and said Rep. Pelosi’s “failure to listen and failure to lead” was to blame for some Republican defections.

Rep. Roy Blunt, the minority whip, said that “a couple” of Republicans said they were offended by the speaker and changed their minds. But he said those lawmakers were already wavering.

Rep. David Obey, a Wisconsin Democrat who stood watching the Republicans criticize Rep. Pelosi, called their remarks “ridiculous.” He said the Republicans were jockeying for position before upcoming leadership elections. “The President wouldn’t have gotten to first base without the cooperation of the Democratic leadership,” Rep. Obey said. “Evidently some of these guys would rather lose the economy than lose the election.”

The measure would have given Treasury a $700 billion line of credit and wide authority to buy the mortgages, securities and financial assets that are undermining market confidence.

Wall Street What?

2:30

After the bailout vote, WSJ’s Andy Jordan hit the street — Wall Street — to hear what bankers, investors and tourists had to say. (Sept. 29)

The Bush administration had hoped the plan would stabilize financial markets as bad assets are pulled under the government’s wing. Under the legislation, troubled banks and investment firms would qualify for government assistance, as would pension plans, local governments and small banks.

In many ways, the plan was star-crossed from the beginning. Treasury’s initial two-and-a-half page proposal was ridiculed by lawmakers for granting the administration virtually unfettered power to spend the money as it saw fit. During a week of negotiations, the bill swelled with extra conditions and protections for taxpayers.

On Thursday, President George W. Bush convened a White House summit in a bid to unite leaders of both parties, as well as presidential candidates Sens. Barack Obama and John McCain, behind the proposal. But conservative House Republicans, encouraged by the return to Washington of Sen. McCain, demanded additions to make the bill more “free market.” The dissention derailed an already contentious summit.

The administration, meanwhile, failed to get a handle on the politics of the package. It was quickly dubbed a “Wall Street bailout.” Although President Bush talked repeatedly about the impact of restricted lending on small businesses, jobs and savings, a populist uproar continued to tag the bill as a rescue plan for the financial whizzes who caused the financial mess. In addition, lawmakers were frustrated with the terse answers from Treasury about how exactly the money would be spent.

“I guess [Democrats] saw the same problems we did and they didn’t want to go home and explain this thing,” said Rep. Scott Garrett, a Republican from New Jersey who voted against the bill.

When the deal was brokered, Democrats said they planned to come up with 120 votes. Party leaders drew votes from the New York delegation, which tends to be sensitive to stock-market concerns, and gained support from moderate Democrats.

On the Republican side, Rep. Blunt, the minority whip, told Majority Whip James Clyburn that he expected 70 votes. If the “energy on the floor” took hold, Rep. Blunt said, he might be able to deliver as many as 80, according to a Democratic aide. Old-guard Republicans, such as Reps. Jim McCrery of Louisiana, David Dreier of California and Spencer Bachus of Alabama, were lined up behind the administration’s effort.

Though the vote was expected to be tight, few on Monday morning foresaw the possibility of defeat. President Bush and Treasury Secretary Paulson called numerous lawmakers, including Rep. Randy Neugebauer, a Texas Republican, trying to whip up last-minute support.

“Secretary Paulson said, ‘We need you, and is there any question I can answer that is keeping you from voting yes,’” Rep. Neugebauer said. “I asked all the questions. I just didn’t like the answers.”

Shortly after noon, less than an hour before the voting began, White House spokesman Tony Fratto predicted the votes would be there. He said that Vice President Dick Cheney and senior aides, including chief of staff Josh Bolten and counselor Ed Gillespie, were also making calls. “I think everyone with a phone is calling to see if we can shore up a member who may be skeptical of the proposal,” Mr. Fratto said.

Early in the afternoon, as the vote got under way, the stock market was jittery. Investors were rattled by the weekend collapse of Dutch-Belgian bank Fortis NV and the sale of Wachovia to Citigroup. As the 15-minute window for House members to cast their vote opened shortly before 1:30 p.m., the Dow Jones Industrial Average was down by more than 250 points.

By about 1:40 p.m. the “nay” votes were slightly ahead. On trading floors, traders stood in semicircles around televisions, watching the slowly changing tally.

Lurched Downward

When the voting clock hit zero at about 1:43 p.m. with the “no” votes in the lead, the stock market lurched downward. In the span of one minute the Dow lost 100 points, extending its loss to 414 points. By 1:45 p.m., the loss reached 580 points; two minutes later, it had widened to 673 points.

Top Democrats argued about whether or not to keep the vote open to whip up enough votes, but decided against it.

Senate Democrats were in a caucus meeting when a staffer brought Senate Majority Leader Harry Reid of Nevada a note with the vote tally. Almost immediately, lawmakers began handing their BlackBerrys to each other and sharing the news, according to a person present.

Democrats, dismissing complaints about Rep. Pelosi’s speech, immediately blamed Republicans for failing to deliver enough votes on their end. “Because their feelings were hurt, they’re deciding to punish the country,” said House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat. “We think they are covering up the embarrassment of not having the votes.”

Amid the acrimony, Rep. Blunt called Reps. Hoyer and Frank, as well as several senators, to say he was ready to find a way forward. Mr. Blunt said he plans to reach out to lawmakers who voted no. “You don’t have to find very many,” he said. “But you can’t do things that drive ‘yes’ votes…away.”

House Democrats met late Monday afternoon to decide those issues. Negotiations weren’t expected to resume immediately. The House reconvenes on Thursday.

Source:The Wall Streat Journal,http://online.wsj.com/article/SB122270285663785991.html#articleTabs%3Darticle

Former Malaysian Prime Minister Tun Dr. Mahathir Mohamad said today
that PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi as “Making a
political move, a man very unpopular trying to do something ‘right’. He
is making use of the system in the worst ways”, when reacting to the
suggestion of the Prime Minister attempting to “make good against the
Judiciary”, which was purportedly damaged during the former’s time.

Talking
to Stephen Sackur in a BBC “Hardtalk” first aired this afternoon, who
described him as “A personified fellow and opponents call him a
‘Dictator and Racist’ ”. The program was taped in London on Friday, 18
April 2008, was his first interview on air in a foreign media since the
12th Malaysia General Elections on 8 March 2008.

He said
“Results of the GE shows former supporters of the ruling party (BN),
voted Oppositions, not because they like them!”. When asked for the
reason, the stern response was “The Government promised to remove
corruption but they themselves are corrupt”. He also explained that PM
‘Flip-Flop’ Abdullah must go now because the next leader needed time to
revive the party and the support and unless there are changes, then
this might be the beginning of the end of BN.

On the New
Economic Policy, “It was a system initiated by my predecessors. The
system worked for 50 years and worked very well. it is to correct the
imbalance created since the British days”. Sackur asked about “The real
discontent” from different ethic groups in the country and charged
Malaysia, especially in Tun Dr. Mahathir’s time practiced racial biased
policies and now no longer relevant nor acceptable. He even quoted
Penang Chief Minister Lim Guan Eng’s statement. His response was
“Malaysia is built for all. Everyone is prosperous. All benefited from
the Government policies and progressed. Why only now and not during my
time?”.

Then Sackur charged if people were to voice out
against him then, they would be arrested. “Hundreds of people were
arrested?”. Tun Dr. Mahathir’s instant response, “Who are they?” and
contradicting the host with “The first thing I did as the Prime
Minister, was to release many political detainees”. He the added that
foreign media is fond of making up these stories and end up propagating
them as “the truth”. “Tell me who are the hundreds who I have put in
prison (for political reason)?”.

In the case of Anwar
Ibrahim, when asked to comment about having the support of many and
even BN MPs ready to defect, and wanted to make changes in the system,
including racially based policies “He is welcomed to do that, when he
becomes to the PM” and added “The present leadership should be blamed
for losing support of the BN MPs”.

On issues raised by Anwar,
which is favourable to the minority groups “Now, there is opportunism
for him. He was in Government before. He did not complain”. Then the
issue about his arrest and conviction was trumped up and now proposing
that the former regretted on that episode “Why should I regret? He was
arrested under the laws of the country, tried under the laws of the
country and locked up for abuse of power. This is accordance to the
Malaysian law”. Sackur then added that Anwar wanted to do a full and
thorough public inquiry for all Tun Dr. Mahathir’s wrong doings in the
22 years in office, he responded with sarcasm, “Lets see him so a fully
impartial inquiry. Probably he can get foreigners”.

When
responding to Sackur’s list of Western report of unfair trial for
Anwar, Tun Dr. Mahathir asked in return “What are the track record of
these countries? The are the sort of people who arrest people without
law and trial, like Guantanamo Bay”. Then the issue was raised about
use of the Internal Security Act, which was a put in place as Emergency
Ordinance by the British. “We did it under the law of the country. We
need to prevent people from causing racial riot and disharmony”. He
later elaborated on Malaysia being multi ethnic and multi religious
society.

On the Judiciary, relating to the issue involving a
video with lawyer V K Lingam purportedly talking on the phone and
mentioning Tun Dr. Mahathir’s name, “This man had his video taken
beccause he was deffending him. This man was defending me and Anwar is
the one who released this tape. Anwar wanted to blackmail him!”.

On
the move by PM ‘Flip-Flop’ Abdullah making ex-gratia payments to
dismissed Lord President Tun Mohamed Salleh Abas and five Supreme Court
Judges, “A political move by a man very unpopular, trying to do
“something right”. He is not dismantling the system. He is making use
of the system in worst ways!”. What he did not say was, none of the
members of the bench attended the Bar Council dinner where PM
‘Flip-Flop’ Abdullah made the announcement.

About the
appointment of PM ‘Flip-Flop’ Abdullah, Tun Dr. Mahathir explained that
he former seemed ‘clean’ and ‘pious’ when he was appointed as the
successor, even though he did not have the bigger support as the Vice
President of UMNO. “We all made mistakes. Just like the British people
made a mistake by putting a liar like Blair to power”.

The
debate when on towards democracy. He elaborated that democracy has to
be fully understood and used with with the right intention, otherwise
it can turn anarchy. He also quoted that many earlier civilisation did
not practice democracy and they turned out to be great. “Democracy is
good when the leader is good. It was a leader of a democratic country
who dropped atomic bombs”.

Sackur then charged him as being
‘Anti-Semitic’ and the instant response was “Antisemitism is something
created by the Jews themselves”. He then related to the earlier issue
of democracy “There are journalist who were arrested for talking about
and against the Holocaust. Where is the ‘Freedom of Press’ then?”. He
also explained on his speech “The Jews rule the world by proxy”, with
“The United States allow the Israelis to do anything they want”.

The
interview was ended when he was asked, whether he will continue to
attack the Leadership and Government and whether “Its time for you to
be quiet”, the response with his typical smirk, “Why should I be quiet,
when they are doing something wrong to my country?”.

The wide ranging 30 minute program, was a really good interview, indeed.

The interview can now be viewed on the BBC.com Hardtalk page.

source:http://bigdogdotcom.wordpress.com/
 

Muslim scientists and clerics have called for the adoption of Mecca
time to replace GMT, arguing that the Saudi city is the true centre of
the Earth.

Mecca is the direction all Muslims face when they perform their daily prayers.

The call was issued at a conference held in the Gulf state of Qatar
under the title: Mecca, the Centre of the Earth, Theory and Practice.

One geologist argued that unlike other longitudes, Mecca’s was in perfect alignment to magnetic north.

He said the English had imposed GMT on the rest of the world by force
when Britain was a big colonial power, and it was about time that
changed.

Mecca watch 

A prominent cleric, Sheikh Youssef al-Qaradawy, said modern
science had at last provided evidence that Mecca was the true centre of
the Earth; proof, he said, of the greatness of the Muslim "qibla" - the
Arabic word for the direction Muslims turn to when they pray.

The meeting also reviewed what has been described as a Mecca watch, the brainchild of a French Muslim.

The watch is said to rotate anti-clockwise and is supposed to
help Muslims determine the direction of Mecca from any point on Earth.

The meeting in Qatar is part of a popular trend in some Muslim
societies of seeking to find Koranic precedents for modern science.

It is called "Ijaz al-Koran", which roughly translates as the "miraculous nature of the holy text".

The underlying belief is that scientific truths were also
revealed in the Muslim holy book, and it is the work of scholars to
unearth and publicise the textual evidence.

But the movement is not without its critics, who say that the
notion that modern science was revealed in the Koran confuses spiritual
truth, which is constant, and empirical truth, which depends on the
state of science at any given point in time.

source:http://news.bbc.co.uk/2/hi/middle_east/7359258.stm

Malaysia’s ruling coalition tried to
regroup on Monday after a shocking electoral setback that decimated its
ranks and sent markets swooning over the political uncertainties ahead.

Prime Minister Abdullah Ahmad Badawi was sworn into office after his
Barisan Nasional (National Front) coalition lost the two-thirds
majority in parliament it had held for nearly four decades at the
weekend’s elections.

He got a much-needed vote of support from his United Malays National
Organisation (UMNO) to stay on as both party president and prime
minister at a special meeting of the party on Monday, despite calls
from his predecessor Mahathir Mohamad to quit.

But the prime minister has an enormous task ahead in holding
together his battered coalition and filling holes in his Cabinet –
four ministers lost seats in the weekend election, including Works
Minister S. Samy Vellu, the head of the main Indian party in the
coalition.

Sources close to the Prime Minister said Abdullah had cancelled
plans to attend next week’s Organisation of the Islamic Conference
summit in Senegal — he was to hand over chairmanship of the 57-member
grouping — to deal with the crisis at home.

A key partner in the multi-racial coalition, the Malaysian Chinese
Association (MCA), dismissed speculation the party might pull out of
the coalition that has ruled Malaysia uninterrupted since independence
from Britain in 1957, and the Malaysian Indian Congress (MIC) was
expected to follow suit.

The poll carnage was spectacular and wreaked havoc on the markets.
Trading in Malaysian stocks was suspended for an hour — the first time
that’s ever happened — after they fell to the daily 10 percent limit.

But Credit rating agencies Fitch and Moody’s on Monday maintained
their sovereign ratings on Malaysia, saying the economy was on a sound
footing.

"The element of uncertainty has gone up but the fundamentals of the
economy are quite strong to withstand a sharper-than-expected
heightening of uncertainty," Moody’s senior analyst Aninda Mitra told
Reuters.

REVIEWING MEGA-PROJECTS

Race riots erupted the last time the ruling coalition lost its
two-thirds majority in 1969, but the streets have been calm since
Saturday’s vote, perhaps because members of all three ethnicities voted
against the status quo.

A loose alliance of three opposition parties took control of five of
Malaysia’s 13 states, their most by far. They have threatened to review
projects in the multi-billion-dollar development "corridors" in states
now under their control that have been the centerpiece of Abdullah’s
economic program.

Malaysian states control land and water and can effectively scuttle federal development projects.

The first indication of that came on Monday when the incoming
government in Penang said it would review plans for an $8-billion real
estate project, whose major backer is a firm partly owned by
businessman Patrick Lim, a friend of the prime minister’s son.

Government-linked infrastructure companies took a beating on the
bourse. Malaysian Resources Corp tumbled a whopping 39 percent, UEM
World 24 percent, and Sime Darby 17 percent, over fears the opposition
would scrap projects on the drawing board.

Opposition parties were trying to parcel out cabinet posts and power
sharing arrangements in the first test of how well they will govern
before being sworn into office on Tuesday.

The opposition Islamist party, PAS, is expected to lead the northern
heartland states of Kedah and Perak and easily retained power in its
stronghold in northeastern Kelantan state.

PAS played down fears it would try to ban gambling and alcohol in states under its control.

Former Prime Minister Mahathir Mohamad, who anointed Abdullah his
successor but now has waning influence in the party, advised him on
Sunday to take responsibility and quit.

Mahathir’s son Mukhriz Mahathir, who commands some support within the party, was also expected to call on Abdullah to quit.

Barisan Nasional won just half the popular vote and 62 percent –
down from 90 percent — of the seats in the 222-member national
parliament. The MCA saw their strength in parliament halved from 31 to
15, while MIC lost two-thirds of their seats.

A protest vote from ethnic Chinese and Indians, upset over what they
saw as racial inequality in terms of business, job and education
opportunities, had been expected.

But Malays, who are all Muslims and traditionally support Barisan,
completed a perfect storm for the government, giving the opposition
Islamists a record vote to protest rising prices.

Without a two-thirds parliamentary majority, Barisan can no longer change the constitution or make some key appointments.

source:REUTERS,10 March 2008

by Dr. Ben Mollov
JERUSALEM—Malaysia stands, in my view, as a
place for great social pioneering. I recently returned there for the
second time in two years. My first visit took place in December 2005.

As an Israeli, this was an unusual event as there are no diplomatic
relations between Israel and this large, influential Muslim country
(Malaysian law even prohibits its citizens from visiting Israel). But I
was privileged to appear as the sole Israeli speaker at a Global Peace
Forum in Kuala Lumpur, held under the auspices of the Perdana
Leadership Foundation headed by former Prime Minister of Malaysia, Dr.
Mahathir Mohammed.

I accepted the invitation apprehensively, but the experience turned out
to be extremely positive. In fact, the Israeli flag was displayed in
the massive Kuala Lumpur convention centre, and, as a religious Jew, I
wore my kippa
(religious head-covering) while addressing the 1,000-person Malaysian
audience. (I’m happy to note that my appearance was met by applause).
The theme of my presentation was “Approaches to, and the Impact of,
Israeli-Palestinian Inter-religious Dialogue.”

This was my first exposure to Malaysia, a country that has been
endeavouring to find balance in its Islamic, but multi-cultural
character. Many Muslims in Malaysia combine the traditional with a
certain relaxed attitude. Teenage girls, for instance, routinely wear
the hijab head covering with jeans.

While few Israelis are able to visit Malaysia, I found in it a mirror
of my own society. Malaysia has a history facing the challenges of
multi-culturalism, and I saw its potential to bridge both religious and
cultural differences. I returned home with a new sense of perspective
in seeing Malaysia as an Islamic and multi-cultural society, akin to
viewing Israel as a Jewish and multicultural society.

I returned to Malaysia in January 2008 to participate in an
international academic conference on globalisation and peace in the
Islamic area of Terengganu. I presented a paper entitled “Approaches to
Intercivilisational Dialogue,” drawing on my many years of field and
research work amongst Jews and Arabs to conclude that: between their
respective religions, there is a common basis for constructive
Israeli-Palestinian dialogue.

I compared Malaysia’s recent cosmonaut, Sheikh Muszaphar Shukor, who
has become a national hero, with Israel’s first astronaut, Ilan Ramon.
They both sought guidance from their respective religious authorities
as to how to maintain Sha’aria law and Halacha
(Jewish law) whilst out in space. The answers formulated attest to the
remarkable similarity of structure and practice in both religions, such
as the dietary laws, frequency of prayers, and even laws of modesty.

Such comparisons were probably new for many who had little familiarity
with Judaism, and it was clear that my presence as a Jewish religious
Israeli, the first many had ever met, involved breaking down barriers
of stereotypes and misconceptions. However, the more religious faculty
at the University of Terengganu had no trouble helping me identify
foods consistent with my kosher requirements—they could identify with
my problem as they too had had to cope with diet restrictions while
abroad.

But I was certainly not the only Jew in Malaysia. In Kuala Lumpur I met
an American Jewish factory owner who had settled in Malaysia 20 years
ago. He dressed openly in Jewish religious garb, and reported little or
no animosity towards him as a Jew. Through him I met many people of
diverse backgrounds. Together we visited a Middle Eastern restaurant
belonging to a Syrian Muslim, who was very pleased to meet an
Israeli—for the first time. He explained that on his recent visit to
Syria, the mood of his people was overwhelmingly in favour of peace
with Israel. Our visit to his restaurant reflected the type of unusual
encounter that seems almost natural in Kuala Lumpur.

While visitors are often struck by an ambiance of interethnic harmony
in Malaysia, that harmony now seems somewhat tarnished. Several groups,
particularly the Indians, have been seeking to renegotiate complex
social contracts, which some believe have left them in an inferior
position. Other complex questions – such as the place of Islam in the
state structure – are also at issue, perhaps not unlike some of the
dilemmas facing Israel today, where some Israelis would like to see
Jewish law as an integral part of the state structure, and some would
not.

While my second trip to Malaysia brought me into contact with a less
idealised view of the society, this country truly has the potential to
serve as a model for the world—guiding us toward a peaceful meeting of
civilisations.

###

* Dr. Ben Mollov teaches political science and conflict management, and
runs the Project for the Study of Religion, Culture, and Peace at
Bar-Ilan University, Israel. This article was written for the Common
Ground News Service (CGNews) and can be accessed at
www.commongroundnews.org

Source: Common Ground News Service, 28 February 2008,

All Cabinet ministers are expected to take a group photograph in
Putrajaya tomorrow in what appears to indicate that the general
election is imminent.

Several Cabinet ministers contacted by Bernama confirmed that a
photo session has been scheduled after the Cabinet meeting tomorrow but
refused to give any details.

"We were told to dress up for tomorrow’s meeting. Normally it’s
for a group photo (when such instructions are given)," said a minister
who did not want to be identified when contacted.

He said Cabinet ministers normally would gather for a group photo
at the beginning of a new Cabinet, when there is a Cabinet reshuffle or
towards the end of the (Cabinet’s) term.

  "It looks like we are leaning towards that now," he added.

Another minister, when contacted, also concurred with the general
belief that the polls were imminent but cautioned that it did not mean
that the election would be called immediately.

"It could be in a week’s time, two weeks or even months later. If
I am not mistaken, the last one (general election) in 2004, we had a
group photo two weeks before the general election," he said.

A political analyst predicted that the election would be called
immediately after Chinese New Year — as early as Feb 13, based on the
fact that number 13 is the favourite number of Prime Minister Datuk
Seri Abdullah Ahmad Badawi.

"His car (registration number) is No. 13. The last general
election, in 2004, was also called on Wednesday, 3-3 (3rd March). Watch
out for anything to do with the number three," he said.

The Cabinet is scheduled to meet again on Feb 5 (Tuesday) instead
of the normal Wednesday (Feb 6) which would be the eve of Chinese New
Year.

When Abdullah called the general election in 2004, parliament was
dissolved on March 4. Nomination was on March 13 while polling was on
March 21.

"The question now is whether he would call it before the OIC
(Organisation of Islamic Conference) meeting or after the OIC meeting,"
he said.

Abdullah is scheduled to attend the OIC Heads of Government
Meeting in Senegal from March 8 to 12 as Malaysia is expected to hand
over the OIC chairmanship.

"If the election is held during the school holidays (the school
holidays are from March 9 to 16), let’s say on March 9, he would not
have time to form the Cabinet before attending the OIC meeting," he
said.

"Therefore, if he wants to have the election before the OIC
meeting, he would have to call it after Chinese New Year. Otherwise, he
would have to wait until he comes back from the OIC meeting," he added.

Political insiders say that Abdullah, during an interview with CNN
in Davos, Switzerland, last week, dropped a clearer hint that the
election was likely to be held soon.

"We will call for the election when I think everything is all
right and at the moment I think the people are ready for the election,"
Abdullah said in the interview which was conducted on the sidelines of
the annual meeting of the World Economic Forum.

Many political observers expect Abdullah to call for the polls by
mid-March even though his ruling coalition’s five-year mandate only
expires in the middle of next year.

source:BERNAMA

                        BERLIN (AFP) -
Anti-Nokia anger in Germany
for closing a factory is growing with politicians publicly ditching the
firm’s phones and joining calls for a national boycott in Europe’s largest economy.                   
                        

The Finnish mobile phone giant said on Tuesday it plans to close the
factory in Bochum in the Ruhr industrial heartland and shift production
to Romania where labour costs are lower. The closure will result in 2,300 job losses.

            
Finance Minister Peer Steinbrueck, from the left wing party in Chancellor Angela Merkel’s governing coalition, attacked what he called Nokia’s "caravan capitalism."

Kurt Beck, head of the Social Democrats (SPD) party, has banned
Nokias from his home, while Merkel has said consumers had a right to
favour appliances "made in Germany."

            
"As far as I am concerned there will be no Nokia mobile phone in my house," Beck told the Bild am Sonntag newspaper.

"For me, and this is doubtless the case with many other Germans,
the name of Nokia has not sounded good for the past week. I don’t want
to be reminded of the incredible source of anger every time I am on the
phone."

            
Horst Seehofer, consumer protection minister and a member of Merkel’s conservative Christian Democratic Union (CDU), has hinted that he might ban Nokia phones in his ministry.

            
And Peter Struck, head of the SPD in parliament, said on Friday that he has returned his Nokia N-95.

"I have asked my office to find me another mobile phone," Struck said.

The SPD and Merkel’s CDU are each seeking attention ahead of key
state elections in the states of Hesse and Lower Saxony on January 27.

            
The votes, followed shortly afterwards by a third in Hamburg,
are seen as dry-runs for national elections next year when both parties
will be seeking to win enough votes to govern on their own.

Nokia’s announcement, followed reportedly within days by the first
notices being served on Nokia factory workers, sparked bitter resentment in Germany with the DGB trade union federation calling Thursday for a boycott.

A survey released on Friday by the Cologne-based market research
institute Psychonomics signalled that Nokia’s image here suffered a
blow since the plant closure was announced.

            
Consumers suddenly gave the brand lower quality ratings after previously comparing it favourably to competitors like Motorola and Ericsson.

            
Germans will be hard pressed to find a mobile phone made in Germany, however.

Last year US manufacturer Motorola said it was dismantling its
factory in Flensburg in northern Germany, and German industrial giant
Siemens sold its mobile unit to BenQ of Taiwan in 2005.

            
A year later, BenQ Mobile filed for bankruptcy, condemning its two German factories.

The IG Metall trade union, which has branded Nokia’s decision a
"scandal", has warned that apart from the 2,300 workers at the Bochum
plant, thousands more could lose their livelihoods as an indirect
result,

A mass protest will be held in Bochum on Tuesday, but Finance
Minister Steinbrueck has warned that saving the factory is unlikely.

            
Germans have pointed a finger at the European Union, demanding to know whether it laid the ground for Nokia’s move to Romania through structural funding to the new EU member.

The Commission has denied subsidising Romania’s new Nokia
plant, and pointed out that both Germany and Romania receive EU
funding.

            
"It is true that we support infrastructure in economically less privileged regions, also in Germany," European Commission President Jose Manuel Barrosso said in an interview with the Wirschaftswoche magazine to appear on Monday.

            
Barroso said he could understand that Germans were shocked by Nokia’s move and suggested Brussels could help those laid off in Bochum.

"It is precisely because we know how difficult transformation
is tat we mobilise our social and globalisation funds so that member
states do not have to absorb these changes on their own."

The anger at Nokia is partly fuelled by the fact that the
German government and the state of North-Rhine Westphalia, where Bochum
lies, have provided the company with some 80 million euros (117 million
dollars) in aid.

EU Industry Commissioner Guenter Verheugen, a German, told
Welt am Sonntag newspaper the case should prompt a rethink of
subsidies. "There is no point in the state paying subsidies to attract
companies," he said.

Source:Yahoo!News

Malaysia is likely to hold general elections in early March, a news
report said Thursday (10 Jan), even though the government’s popularity
appears under threat because of rising prices and anger among ethnic
Indians.

The polls will be held "soon enough, latest by the first week of March," The Star newspaper quoted an unidentified senior minister in the ruling coalition as saying.

"Everybody is ready. If we wait any longer, fatigue will set in," the minister was quoted as saying.

Government officials were not immediately available for comment because of a public holiday.

The minister’s comments came as no a surprise. Malaysia’s 12th
general elections, not due until next year, were widely expected to be
called in early 2008, although some observers have speculated that
Prime Minister Abdullah Ahmad Badawi could put the polls off until the
middle of the year because of an uncertain public mood.

Abdullah’s biggest challenge comes from the minority ethnic Indians
who are unhappy with what they call legalized discrimination against
them in jobs, education, business and religion. They cite an
affirmative action policy for the majority Malay Muslims, ensuring wide
privileges in virtually all aspects of life.

In November, about 20,000 Indians, most of whom are Hindus,
demonstrated against official discrimination in a rare and open
challenge to the government. The government jailed the five top leaders
of the group that organized the protest.

The ruling Barisan Nasional coalition is dominated by Abdullah’s
United Malays National Organization party, representing Malays who form
60 percent of the country’s 27 million people. The other main party in
the coalition is the Malaysian Chinese Association, which represents
the Chinese who constitute 25% of the population.

The third coalition partner is the Malaysian Indian Congress, which
depends on Indians who form 8% of the population, for its votes.

Barisan has been in power continuously since independence in 1957,
thanks largely to a power-sharing agreement that gives political
parties representing the multiethnic country’s various races a
proportional share of the government. It is expected to return to power
easily.

Malaysians of all races are also concerned about rising prices and crime.

The number of violent crime cases went up from 31,408 in 2006 to
35,158 in 2007, according to official statistics released Wednesday (8
Jan). The number of property crimes such as thefts and burglaries
jumped from 196,760 to 209,559 in the same period, the government said.

Still, Abdullah likely wants to get the elections over with before
announcing more price hikes, especially for fuel, later this year.

The Star quoted Muhammad Muhammad Taib, the United Malays
National Organization’s information chief, as saying the party was
concentrating on preparing for the election.

"We have always been in gear, now we have gone into overdrive," he said.

Source: My Sinchew.com

The battle of the books

From The Economist print edition

The business of marketing the Bible and the Koran says a lot about the state of modern Christianity and Islam

Eyevine

CHRISTIANS and Muslims have one striking thing in common: they are
both “people of the book”. And they both have an obligation to spread
the Word—to get those Holy Books into the hands and hearts of as many
people as they can. (The Jews, the third people of the book, do not
feel quite the same obligation.)

Spreading the Word is hard. The Bible is almost 800,000 words long
and littered with tedious passages about begetting. The Koran is a mere
four-fifths of the length of the New Testament; but some Westerners
find it an even more difficult read. Edward Gibbon complained about its
“endless incoherent rhapsody of fable and precept”. Thomas Carlyle said
that it was “as toilsome reading as I ever undertook; a wearisome,
confused jumble, crude, incondite”.

Yet
over 100m copies of the Bible are sold or given away every year. Annual
Bible sales in America are worth between $425m and $650m; Gideon’s
International gives away a Bible every second. The Bible is available
all or in part in 2,426 languages, covering 95% of the world’s
population.

The Koran is not only the most widely read book in the Islamic world
but also the most widely recited (“Koran” means “recitation”). There is
no higher goal in Muslim life than to become a human repository of the
Holy Book; there is no more common sound in the Muslim world than the
sound of Koranic recitation.

Reciting the Koran is the backbone of Muslim education. One of the
most prized honorifics in Islamic society is “hafiz” or “one who has
the entire scripture off by heart”. Do so in Iran and you get an
automatic university degree. The great recitors compete in tournaments
that can attract audiences in the hundreds of thousands—the world cups
of the Islamic world. The winners’CDs become instant bestsellers.

The Bible and the Koran have both gone global. In 1900, 80% of the
world’s Christians lived in Europe and the United States. Today 60%
live in the developing world. More Presbyterians go to church in Ghana
than in Scotland. In 1900 Islam was concentrated in the Arab world and
South-East Asia. Today, there may be as many practising Muslims in
England as there are practising Anglicans; though in the 20th century,
at least, Islam’s expansion has mostly come about through population
growth and migration, rather than conversion. Muslim “missionary”
activity is aimed more at reinvigorating the faithful, and encouraging
them to greater zealotry, than at winning new souls.

This mountain of Holy Books is a giant refutation of the
secularisation thesis—the idea that religion recedes as the world
modernises. “The book lives on among its people,” Constance Padwick, a
scholar of the Koran, has written. “For them these are not mere letters
or mere words. They are the twigs of the burning bush, aflame with
God.” The same can be said of the Bible.

Getty Images

It also poses a couple of intriguing questions. Why are today’s
Christians and Muslims proving so successful at getting the Word out?
And who is winning the battle of the books? Is either of the world’s
two great missionary religions gaining an edge when it comes to getting
their Holy Books into people’s hands and hearts?

The straightforward answer to the first question is that Christians
and Muslims are both proving remarkably adept at using the tools of
modernity—globalisation, technology and growing wealth—to aid the
distribution of their Holy Books. “Give me Scotland or I die,” John
Knox once cried. Today’s faithful aim for the world.

The combination of globalisation and rising wealth is proving to be
a bonanza for both religions. The most prolific producer of Christian
missionaries, on a per head basis, is now South Korea. The biggest
Bible publishing houses are in Brazil and South Korea. An interlinked
global network of 140 national or regional Bible Societies pools
resources to reach its collective goal of putting a Bible in the hands
of every man, woman and child on the planet. The American Bible
Society, the biggest of the lot, has published more than 50m Bibles in
atheist China.

Saudi oil wealth is supercharging the distribution of the Koran. The
kingdom gives away some 30m Korans a year, under the auspices of either
the Muslim World League or individual billionaires, distributing them
through a vast network of mosques, Islamic societies and even
embassies. Go to FreeKoran.com and you can have a free book in your hands in weeks.

Saudi-funded dissemination of the Koran, along with literature
promoting the stern Saudi understanding of Islam, may not have much
direct effect on Christians, or the unchurched. But it does increase
the relative weight, within Islam, of teachings which tend to sharpen
the Christian-Muslim divide. For example, traditional Muslim teaching
stresses those passages in the Koran which affirm the Christian Gospel
and the Hebrew Torah as valid revelations of God and paths to
salvation. But there is a harsher, Saudi-influenced view which insists
that since Muhammad delivered the final revelation, Christianity and
Judaism have lost their power to save.

The Muslim diaspora and Muslim missionaries are bringing the faith
to previously untouched areas. The Tablighi Jamaat (“the group that
propagates the faith”) is a global network of part-time preachers who
dress like the Prophet, in a white robe and leather sandals, and travel
in small groups to spread the Word. Their annual gatherings in India
and Pakistan attract hundreds of thousands.

Technology is proving to be a friend of the Holy Books. You can
consult them on the internet. You can read them on your “Psalm pilot”
or mobile phone. You can listen to them on MP3
players or iPods (“podcasting” has given rise to “Godcasting”). Want to
“plug into God without unplugging from life”? Then simply buy a Go
Bible MP3 player. Want to memorise the Koran? Then buy an MP3
player that displays the words as you listen. Want to network with
like-minded people? Then the eBible allows you to discuss biblical
passages with virtual friends.

Several television channels and radio stations do nothing but
broadcast the Koran. At the other end of the technological spectrum,
the American Bible Society produces an audio device, powered by a
battery or hand crank and no bigger than a couple of cigar boxes, that
can broadcast the Bible to a crowd of a hundred.

Getty ImagesA well-thumbed Book

There is a difference, however, between getting and understanding a
Holy Book. Here both Christianity and Islam suffer from serious
problems. Americans buy more than 20m new Bibles every year to add to
the four that the average American has at home. Yet the state of
American biblical knowledge is abysmal. A Gallup survey found that less
than half of Americans can name the first book of the Bible (Genesis),
only a third know who delivered the Sermon on the Mount (Billy Graham
is a popular answer) and a quarter do not know what is celebrated at
Easter (the resurrection, the foundational event of Christianity).
Sixty per cent cannot name half the ten commandments; 12% think Noah
was married to Joan of Arc. George Gallup, a leading Evangelical as
well as a premier pollster, describes America as “a nation of biblical
illiterates”.

Muslims greatly prefer to read the Koran in the original Arabic. Yet
the archaic language and high-flown verse, while inspiring, can also be
difficult to understand even for educated Arabic speakers. And only 20%
of Muslims speak Arabic as their first language. Illiteracy rates are
high across the Muslim world. Many students of the Holy Book do not
understand much of what they are memorising.

This needs to be kept in mind when considering who is winning the
battle of the books. For some, the question is an abomination. Can’t
both sides win by converting the heathen? And aren’t Christianity and
Islam fellow Abrahamic faiths—different versions of the Truth? Others
worry that the question is impossible to answer, since there are no
systematic figures on the distribution of the Koran, and the battle’s
front-line cuts through some of the darkest and most dangerous places
on the planet. Muslims would argue that their struggle was aimed more
at galvanising their own flock than at converting unbelievers. But
Islam’s relative introversion doesn’t make for peaceful coexistence. In
many parts of the world, Islamic authorities have reacted furiously to
attempts by Christians to entice Muslims to “apostasise” or renounce
their faith; in traditional Islamic law, the penalty for apostasy is
death; and encouraging believers to apostasise is also treated as a
crime.

In many parts of the world, battle seems to be in progress. The
Saudis will not allow the Bible to be distributed on their soil. Many
Evangelical Christians are fixated on what they call the 10/40
window—the vast swathe of the Islamic world in Africa and Asia that
lies between latitudes 10 and 40 north of the equator. The Southwestern
Baptist Theological Seminary in Texas has even created a masters degree
to train missionaries in the art of converting Muslims. Some
Evangelicals produce counterfeit Korans that are designed to plant
doubt in Muslim minds.

And the battle of the books is certainly at the heart of the battle
between the two religions. People who get hold of Bibles or Korans may
not read them or understand them. Unless they are introduced to the
books they will certainly remain heathens. Even an imperfect report on
the state of the battle tells us a lot about the world’s two great
missionary religions.

The Christians entered the 21st century with a big head start. There
are 2 billion of them in the world compared with 1.5 billion Muslims.
But Islam had a better 20th century than Christianity. The world’s
Muslim population grew from 200m in 1900 to its current levels.
Christianity has shrivelled in Christendom’s European heart. Islam is
resurgent across the Arab world. Many Christian scholars predict that
Islam will overtake Christianity as the world’s largest religion by
2050.

More recently, though, Muslims complain that the “war on terror” is
making it much more difficult to spread the Koran. Contributions to
Muslim charities have fallen since September 11th 2001. Several
charities have had their funding disrupted. Missionary organisations
such as the Tablighi Jamaat are under investigation by Western
intelligence services, on the grounds that they may be way-stations to
jihadism. And Muslims confront much bigger long-term problems in the
battle of the books.

The first is Christianity’s superior marketing skills. Its religious
publishing houses are big businesses. Thomas Nelson, which was once
owned by a former door-to-door Bible salesman, was bought in 2005 for
$473m. And secular publishing houses have also got religion:
HarperCollins bought Zondervan, a religious book publisher, in the late
1980s, and now most mainstream publishers are trying to produce their
own Bibles. As a result, all the tricks of the publisher’s trade are
being applied to the Bible.

Consider product proliferation. Thomas Nelson publishes 60 different
editions of the Bible every year. The Good Book now comes in all
colours, including those of your college. There are Bibles for every
sort of person, from “seekers” to cowboys, from brides to barmen. There
is a waterproof outdoor Bible and a camouflage Bible for use in war
zones. The “100 minute Bible” summarises the Good Book for the
time-starved.

Consider user-friendliness. There are prayer books in everyday
vernacular or even street slang (“And even though I walk through/The
Hood of death/I don’t back down/for you have my back”). Or consider
innovation. In 2003 Thomas Nelson dreamt up the idea of
Bible-zines—crosses between Bibles and teenage magazines. The pioneer
was Revolve, which intercuts the New Testament with beauty
tips and relationship advice (“are you dating a Godly guy?”). This was
quickly followed by Refuel, for boys, and Blossom and Explore, for tweens.

There are toddler-friendly versions of the most famous Bible
stories. The “Boy’s Bible” promises “gross and gory Bible stuff”. The
“Picture Bible” looks like a super-hero comic. “God’s Little Princess
Devotional Bible” is pink and sparkly.

There are about 900 English translations of the Bible, ranging from
the grandiloquent to the colloquial. There are translations into
languages, such as Inupiat and Gullah, that are spoken by only handfuls
of people. Bob Hudson, of the American Bible Society, wants everybody
on the planet to be able to claim that “God speaks my language”. A
couple of eccentric geeks have even translated the Bible into Klingon,
a language spoken only by scrofulous space aliens on “Star Trek”.

Publishers are producing sophisticated dramatisations of the Bible
with famous actors and state-of-the-art sound effects. Zondervan’s “The
Bible Experience” features every black actor in Hollywood from Denzel
Washington to Samuel L. Jackson. Other outfits are making films that
dramatise Bible stories as faithfully as possible.

And then there are the spin-offs. A “fully posable” Jesus doll
recites famous passages of the Good Book. There are Bible quiz books,
stuffed with crosswords and other word puzzles, and Bible bingo games.
There are Bible colouring books, sticker books and floor puzzles. There
is even a Bible-based juke box that plays your favourite biblical
passages.

Muslims have also gone into the Holy Book business, but nowhere near
as enthusiastically as Christians. This is partly because their
commercial publishing houses are smaller and less sophisticated, but
also because Muslims believe that the Koran is the literal word of
God—dictated to Muhammad (who was himself illiterate) by the Angel
Gabriel and then written down by Muhammad’s followers. “The Koran does
not document what is other than itself,” one scholar notes. “It is not
about the truth. It is the truth.”

Thomas Nelson

This makes Muslims uncomfortable with translations. The Holy Book
says sternly that “we have sent no messenger save with the tongue of
his people.” Today most Muslims tolerate translations—there are now
more than 20 English translations—but do so reluctantly. Most
translations are as literal as possible. Pious Muslims are expected to
learn God’s language.

The second advantage the Christians have is America. The world’s
richest and most powerful country contains some 80m Evangelicals. It
supports more missionaries, more broadcasting organisations and more
global publishers than any other country. Despite some countries’ oil
wealth, the Koran’s heartland is relatively poor. The Arab world has
one of the highest illiteracy rates in the world, with a fifth of men
and two-fifths of women unable to read. It also has one of the lowest
rates of internet usage.

The third big advantage is the West’s belief in religious
freedom—guaranteed in America by the constitution, and in Europe by an
aversion to religious persecution caused by centuries of it. The
heartland of Islam, by contrast, is theocratic. The Saudi Ministry of
Islamic Affairs, Endowment, Call and Guidance employs 120,000 people,
including 72,000 imams. Saudi Arabia bans non-Islamic worship and
regards attempts to convert Muslims to another faith as a criminal
offence. Pakistan has witnessed the attacks on Christian missionaries.
Sudan punishes “religious deviation” with imprisonment.

Christian Evangelists complain that this creates an uneven playing
field: Muslims can build giant mosques in “Christian lands” while
Christians are barred from distributing Bibles in Saudi Arabia and
Iran. But uneven playing fields tend to weaken the home players. Open
competition is a boon to religion: American Evangelism has flourished
precisely because America has no official church. And theocracy is
ultimately a source of sloth and conservatism. “The Book and the
Koran”, by Muhammad Shahrur, which tried to reinterpret the Koran for
modern readers, was widely banned in the Islamic world, despite its
pious tone and huge popularity.

This state-of-the-battle report comes with a health warning.
Predicting the fate of religions is unwise, for they can burn or gutter
in unpredictable ways. But two things are certain in the battle of the
books. The first is that the urge to spread the Word will spark some of
the fiercest conflicts of the 21st century. The area that is being most
heavily fought over—sub-Saharan Africa—is a tinder box of failed states
and ethnic animosities. The second is that the Bible and the Koran will
continue to exercise a dramatic influence over human events, for both
good and ill. The twigs of the burning bush are still aflame with the
fire of God.

Source:The Economist-Dec 22nd 2007 Edition

Short-term market interest rates in the eurozone plunged at their
fastest rate for more than a decade on Tuesday after the European
Central Bank stunned investors by pumping a record €348.6bn ($502bn)
worth of funds into the markets.

The size of the injection –
which was intended to calm the markets over the critical year-end
period – was twice as big as the ECB had indicated would have been
needed in normal circumstances.

The
bank said some 390 private sector banks in the eurozone had requested
funds, which have been offered for two weeks at 4.21 per cent, well
below the previous prevailing market rate.

“The sheer magnitude
of the operation caught the market off guard,” said Win Thin, Brown
Brothers Harriman’s senior currency strategist, who said there was talk
that banks from the US and UK might have taken funds at lower rates
than they could secure from their respective markets.

Tuesday’s
emergency operation, which followed last week’s co-ordinated effort by
western central banks to ease pressures in the financial system,
prompted the two-week euro London interbank offered rate (Libor) to
fall a record 54 basis points to 4.40 per cent. The one-month and
three-month rates recorded their biggest falls for nearly six years.

However, analysts warned further big declines were unlikely,
given that tensions remained high in the financial world. There are
also concerns in the market that the ECB may come under pressure to mop
up any excessive liquidity to prevent the return of inflationary
pressures.

Separately, the Bank of England also sought to
offset market tensions by conducting the first of its long-term
refinancing operations, auctioning £10bn ($20bn) in three-month funds
at a minimum rate of 5.36 per cent – 14bp below the 5.5 per cent base
rate. Three-month sterling Libor fell for a fourth successive session.

The
US Federal Reserve will today publish the results of an exceptional
$20bn auction it performed on Monday to inject funding into the US
financial system.

The unprecedented series of co-ordinated central bank actions
have been sparked by signs of rising tensions in global money markets,
which some analysts attribute to the fact that private-sector banks
typically hoard funds at the end of the calendar year to show strong
balance sheets for reporting purposes.

However, a number of analysts fear banks are hoarding funds because they fear further big credit losses next year.

In another sign of mounting pressures, the ECB revealed that its
emergency “marginal lending facility” – which attracts a penal interest
rate – had been tapped for €2.44bn on Monday. That suggests some
European banks still face considerable difficulties as a result of the
global credit squeeze.

Copyright The Financial Times Limited 2007

Source:FinancialTime,http://www.ft.com/cms/s/0/7ba8f586-ad5b-11dc-9386-0000779fd2ac.html