BI to release regulations on gold pawn platform

BI to release regulations on gold pawn platform - – Bank Indonesia (BI) will release regulations as standard guideline for the transaction of gold pawn in Islamic Bank this week. In the previous week, BI requested Islamic banking to send proposal related to the provision of gold pawn transaction.

The Director of Directorate of Islamic Banking BI, Mulya Effendi Siregar, said, several proposals were from the industry related to the financing platform of pawn for each customer. The financing platform from the pawn transaction set by BI is about 250 million-500 million IDR.

Other provision is the financing tenor. According to Siregar, BI will set the tenor of gold pawn financing only for three months. “However, the Islamic Banking wants it for four months,” he said.

BI will also set the portion of gold pawn financing to no more than 20 percent from the total of Islamic banking financing portfolio. Meanwhile, financing to value (FTV) will not be more than 80 percent and the customer must obtain some gold to be pawned.

To fit the regulation, BI set one year for transition process. “The banks have one year transition and make the standard operation procedure (SOP) in a month,” the Head of Research, Development and Regulation of Islamic Banking BI, Tirta Segara, said.

According to Segara, the portion of financing in gold pawn in Islamic bank must be limited. “It must be limited because it is commercial financing sector,” he said. The limit will not be more than 10 percent of the total of Islamic banking financing portfolio.

BI had invited Islamic banking to discuss the regulation. The Director of Business of BRI Syariah, Ari Purwandono, said, a number of regulations would be set by BI, such as FTV limitation for 80 percent. “For budget platform, we still give proposal for increasing the percentage,” he said.

BRI Syariah proposed the financing of budget ceiling for each customer was 500 million IDR. Purwandono said the financing of gold pawn is not only in case of urgent need, but also for productive purpose.

The regulation set by BI is aimed at preventing gold pawn transaction for speculation and investment. If a bank breaches the regulation, BI will impose sanction based on the regulation No. 21/2008 on Islamic banking. The sanction is administrative to revocation of gold pawn license. Nur Aini/Satya Festiani ( republika.co.id )

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Is Banking Bad?

Is Banking Bad? - When I spoke at Swarthmore College recently, I was startled by one question: Is it immoral for students to seek banking jobs?

The corollary question, with Mitt Romney’s business career under attack even by staunch Republicans, is this: Is it unethical to make millions in private equity?

My answer to both questions: no.

I’ve been sympathetic to the Occupy Wall Street movement, but, look, finance is not evil. Banking has contributed immensely to modern civilization. By allocating capital to more efficient uses, banking laid the groundwork for the industrial revolution and the information revolution.

Likewise, the attacks on private equity seem over the top. Private equity firms like Bain Capital, where Romney worked, aren’t about destroying companies and picking over the carcasses. Rather, the aim is to acquire poorly managed companies, make them more efficient (sometimes by firing people but often by rejiggering the business model) and then resell them at a profit. That’s the merciless, rugged nature of capitalism.

Liberals should also be wary of self-selecting out of certain occupations. After Vietnam and revelations of C.I.A. abuses in the 1970s, many university students avoided the military and the intelligence agencies. So slots were filled disproportionately by ideological conservatives in a way that undermined everyone’s interests. We would have been better off if more Swarthmore idealists had become generals and C.I.A. officers — and we may be better off if some idealists become bankers as well.

Now for my caveats.

When young people go into finance, I hope that they’ll show judgment, balance and principles instead of their elders’ penchant for greed and rigging the system. Just as Communists managed to destroy Communism, capitalists are discrediting capitalism.

A Pew Research Center poll in December found that only 50 percent of Americans reacted positively to the term “capitalism,” while 40 percent reacted negatively. Among Americans ages 18 to 29, more had a negative view of capitalism than a positive view, the survey found. Those young Americans actually viewed socialism more positively than capitalism. In other words, America’s grasping capitalists are turning young Americans into socialists.

The Financial Times recently published a series about “capitalism in crisis.” It noted that the Edelman Trust Barometer, a survey, found that only 46 percent of Americans had confidence in business to do the right thing (and only 25 percent trusted banks).

Public skepticism is warranted, in my view. Corporations have vastly overpaid C.E.O.’s, handsomely rewarding not only success but also failure. Banks that helped cause today’s financial mess lobbied successfully for bailouts for themselves; they privatized profits and socialized losses.

Meanwhile, more than four million families have lost their homes to foreclosure, according to Zillow.com, a real estate company. Bankers and shareholders found a safety net, but not working-class families. One reason is that the campaign finance system allows financiers to buy access and special favors. If you’re a tycoon, your best investment often is a lobbying firm in Washington to create a tax loophole for you. The last few years have been a showcase not of capitalism itself, but of crony capitalism.

Romney’s average tax rate, which he says is probably about 15 percent, exemplifies the problem. The Romneys benefit because capital gains tax rates have been slashed to just 15 percent, much lower than rates paid on labor income.

Then there’s the most egregious tax loophole of all, for “carried interest.” A triumph of lobbying, it allows private equity and hedge fund managers to pretend that their labor income is a capital gain. So they sometimes pay a tax rate of just 15 percent, compared with up to 35 percent for almost everyone else.

Granted, young people haven’t been pouring into finance in recent years out of eagerness to reform this rigged system but to milk it. In 2007, on the eve of the financial crisis, 47 percent of Harvard’s graduating class headed for consulting firms and the financial sector — a huge misallocation of human capital. However well-meaning these new graduates are initially, they often end up caught up in the scramble at the trough.

In the postwar years, labor unions became greedy and rewarded themselves with feather-bedding and rigid work rules — turning much of the public against them. Likewise, Wall Street feather-bedding is tarnishing the public image of banks and business and undermining confidence in capitalism itself.

When financiers rig the system, they should remember the warning of John Maynard Keynes: “The businessman is only tolerable so long as his gains can be held to bear some relation to what, roughly and in some sense, his activities have contributed to society.”

So university students would be wrong to mock their classmates who choose Citigroup over CARE. Banking and private equity aren’t evil, and I would never urge college students to stay away. Maybe today’s young socialist sympathizers, along with healthy regulation and a loud public outcry, can help rescue capitalism from the crony capitalists. ( nytimes.com )

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You're Debt Free, Now What?

You're Debt Free, Now What? - Your final payment has been made, and you've contacted your CareOne representative to let them know you will be finished with your plan.

Wow! You are officially debt free! It's so exciting that you can hardly contain yourself. That one payment you had been struggling to make for years is now yours - all yours. So now what?

Well, for me, I knew I needed to make some new financial goals.

I figured since I didn't use my monthly payment for four years, I wouldn't miss it, and should start to save it.

I watched my debt go down month by month, now it was time to watch my savings go up. The big question was: What should I do with my money?

Again, I'm not a financial advisor. However, I do work for a private club that has a few wealthy members.

They gave me a few suggestions; you can also do your own research on the internet or read some of the financial blogs on the CareOne website.


In the meantime, here are three basic things you can do once you've paid off your debt.


1. Increase Your Retirement Contribution or Start One:

I started a retirement fund at my job almost immediately, but wasn't putting much into it while trying to pay down my debt. Once it was paid off, I increased my 401k contribution from 4% to 10%, and increased it again to 12%. The great thing about a 401k is you don't really feel the deduction, as it's automatically taken from your paycheck, and most companies will match a percentage. This is a long-term investment you'll be glad you started and it certainly falls under the "pay yourself first" motto. Wouldn't it be great to be able to retire?

2. Add a Long-Term Savings Account:

Put at least 40% of your monthly payment into a savings account for the long term. Do a monthly automatic transfer from your checking to your savings so you're not tempted to spend it. Once you have a few thousand dollars, you can put it in a CD or a money market account to get a better interest rate. Imagine, a few thousand dollars that isn't debt? Although interest rates aren't great right now, you'll make some money on your savings and will have better investment opportunities once the economy gets better.

3. Increase Your Emergency Fund:

My emergency fund was approximately $500 while in the DMP. Since then, I have increased that fund. My goal is to have enough to live off of for six to eight months in case I ever lose my job or I'm prevented from working due to illness, etc. I use this same account for car repairs, unexpected bills, etc. I do an automatic transfer to this account every month. Although it fluctuates depending on what's going on in my life, it is growing at a steady rate.


These really are some basic suggestions to get you started. If you have children, you should speak to a financial advisor concerning their savings or college savings.

If you can continue to live without the monthly payment you made to CareOne, then invest it, save it, and watch your money grow!

You are starting a whole new chapter in your financial life - one without debt! What are your financial plans once you are debt free? ( careonecredit.com )

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America Will Return to the Gold Standard within Five Years

America Will Return to the Gold Standard within Five Years - The campaign for monetary reform is underway. “We will return to the gold standard within five years,” according to Lewis E. Lehrman during an interview with Judge Napolitano on FreedomWatch on August 18, 2011.

Mr. Lehrman should know. He is leading the charge, reminding his fellow Americans of our shared western history and the vision that our Founders set forth in the Constitution.

In a remarkably short period of time, the United States grew from thirteen ill-managed colonies into the most prosperous nation the world had ever seen. During most of this period, our monetary regime—the gold standard—inspired confidence and trust in market mechanisms, encouraging long-term savings and investment and heretofore unseen economic growth.

That is, until one hundred years ago.

With the creation of the Federal Reserve System in 1913, the Bretton Woods system of the post-Second World War era, and Nixon’s rescission of the gold standard in 1971, a century of decline in the dollar’s value ensued. At the outset of the 1980s, President Reagan inherited a suite of economic problems. Although he seriously entertained the idea of a return to the gold standard in the 1980s—even requesting and reviewing a plan on how to restore convertibility of the dollar to gold—fiscal restructuring, in the form of an overhaul of the tax code, took center stage.


The monetary reform plan was never carried out.

The wild volatility over the last forty years, especially during the economic downturn of 2007-09, provides further evidence that only a dollar as good as gold will restore long-term price stability and lay the foundation for long run economic growth.

America and the world need a true gold standard more than ever. Is America still courageous enough to lead the world in reestablishing financial order? Let’s hope so—the true gold standard is our last best hope. ( thegoldstandardnow.org )

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Summer holiday? Not this year, say 17million Britons facing money worries

Summer holiday? Not this year, say 17million Britons facing money worries - The downturn has put paid to many Britons’ summer plans, with two in five foregoing their annual getaway in a bid to protect their finances, a survey has found.

Some 39 per cent – the equivalent of 17.7million – will value a healthy bank balance more than a break by the beach, up by 2.7million on the 33 per cent who gave up their holidays during the height of the credit crunch in 2008.

Figures already show the number of foreign holidays taken by British families is down 3 per cent in the 12 months to April compared with the year before.

Thing of the past: 17 million Britons will value a healthy bank balance than a break by the beach this summer

And the trend is likely to continue, as air fares increase and holiday companies put up their prices by 40 per cent once the country’s schools break up for the summer.

In theory, this should be good news for holiday regions such as Cornwall and Devon – but many domestic hotels and holiday parks are proving to be too expensive for Britons worried about their finances.

The poll found that nine in ten of those who are going without a summer holiday this year are those people who would normally take a break in this country.

By contrast, there is some good news for camp sites, which have enjoyed a boom in bookings to highs not seen since the 1950s. The study was conducted by finance giant ING Direct which said those people who are taking a summer holiday are making efforts to save up to cover the cost, rather than simply putting it on a credit card.

At the same time, more than half of those taking a formal holiday said they will make an effort to spend less, most probably by cutting back on eating out.

ING Direct spokesman Richard Doe said: ‘It’s clear that a tough economic climate is causing consumers to pull off a very difficult balancing act – cutting down on debt while dealing with rising prices.

‘So it’s not surprising that the summer holiday is often being sacrificed.
‘However, it is certainly a good thing that consumers are adopting a more sensible approach to holiday planning, saving in advance for their trips, rather than entirely relying on the plastic.’

The popularity of ‘staycations’ – vacations in the UK – has sparked a craze for ‘glamping’, or glamorous camping.

Airbeds, champagne and even the best china from home are now on many Britons’ packing lists as they head to campsites, a study of professionals has found.

And bog-standard tents, with their leaky corners and cramped, sweaty conditions, are being replaced by trendy teepees and yurts – Mongolian-style shelters made from wooden lattices covered with felt.

Portable toilets, electricity points for mobile phone chargers, hair straighteners and even fridges to chill the bubbly are also considered necessities, the research by insurer Hiscox revealed.

Rapid rise: Campsites have enjoyed a boom on bookings as Britons tighten their purse strings on hotel holidays ( dailymail.co.uk )

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Dubai ruler's ambition sowed seeds of crisis

Dubai ruler's ambition sowed seeds of crisis. Extravagant sheik commanded desert state's meteoric rise, aided its bust - Dubai's ruler writes poetry, rides horses across the desert in long-distance endurance races and hobnobs with royals like the Queen of England. Mixing extravagance with boundless ambition, he commanded the desert city-state's meteoric rise — and helped sow the seeds, some observers say, of its debt crisis.

Sheik Mohammed bin Rashid Al Maktoum's business-over-politics approach turned Dubai into a city-state with the surface trappings of Western liberalism — a thin veneer over the conservatism and strict political boundaries familiar throughout the Arab world.

Drink at the bars, wear bikinis at the beach, hit the discos and make money, was the overt message. But there was a red line in the sand: Don't question his grandiose plans or the foundations they were built on. Those foundations, it turns out, were not oil, but other people's money. Lots of it.

"In the past, the ruler was trusted on finances because everyone thought they were backed by oil," said Simon Henderson, a Gulf and energy specialist at the Washington Institute for Near East Policy. "It will be different from now on."

Dubai is one of seven highly autonomous statelets that make up the United Arab Emirates. Though UAE capital Abu Dhabi has huge oil riches, neighboring Dubai has very little.

The 60-year-old Mohammed's confidence and ambition gave way to aspirations to place Dubai in the same league as London or New York.

Forging ahead with eye-popping development, he vigorously wooed investors, leading to excesses that created a speculative bubble. One of the biggest borrowers was the government's own development vehicle, the conglomerate Dubai World, which shook markets with its announcement last week that it needed to delay payments on part of its $60 billion debt.

Mohammed and his government, however, have refused to stand by the company's debts, and when the signs mounted that Dubai was falling victim to the world economic turmoil, he denied it and never came up with a recovery plan.

City's stunning makeover

Dubai's ruler supervised the Gulf city's stunning makeover in the past decade, turning it into a model for development in an Arab world plagued with poverty, corruption and nepotism.

Along with extravagant projects like artificial islands and glitzy skyscrapers, international schools, multinational companies and luxury hotels mushroomed around the city. They offered young Arab professionals jobs and a lifestyle they couldn't find or afford in Cairo or Beirut.

Like his Muslim city-state with a Western outlook, Mohammed, whose net worth is listed at $12 billion by Forbes, has held onto deeply rooted Arabian traditions while pursuing his ambitions for modernity.

He breeds camels and is a passionate lover of horses. He rides endurance races in the desert and drives a customized Mercedes four-wheel drive SUV along Dubai's sprawling highways. He listens to residents' complaints the old-fashioned way, in his diwan, or reception room, but also regularly updates his Facebook profile and exchanges tweets with Dubai's youth.

That mix has suited his personality and ruling style in a region where personality cults around leaders are considered part of good governance.

Taken in by Mohammed's marketing skills, deposed politicians, oil tycoons and powerful executives willingly participated in Dubai's real estate bonanza — no questions asked — as did professionals from Europe and Asia who flocked to the emirate, paying for condos and villas before building even started.

Some multinational companies even made the emirate their regional headquarters, and company executives rubbed shoulders with Hollywood stars like Charlize Theron and athletes like Tiger Woods.

Charmed by Mohammed's personality and his assurances, investors poured in billions.

Bubble bursts, ruler retreats

Taking advantage of cheap credit, developers — some run by the government and other's closely linked to it — built soaring skyscrapers and luxury residential compounds on man-made islands at a pace that outstripped real demand. Despite oversupply, real estate prices soared, in a mirror image of what happened in the United States before the subprime mortgage crisis sent the world into its worst recession in over six decades.

When the global financial crisis hit Dubai, prices collapsed by 50 percent in a year while the cheap funding dried up, meaning other projects either sat unfinished or were scrapped.

Now, as the emirate's largest government-owned conglomerate, Dubai World, reels under the weight of its $60 billion in debts, Mohammed has retreated from the limelight.

Given how intertwined Dubai is with its ruler and members of the Maktoum dynasty, the fallout could create trouble for Mohammed, who must now either hope that the neighboring emirate of Abu Dhabi will step in with some sort of bailout or that creditors will see they have little choice but to agree to restructuring debt.

"It will be very difficult for Sheik Mohammed to survive this one," said Christopher Davidson, an expert in Gulf affairs at Britain's Durham University and author of two books on the Emirates. He said Mohammed misled investors by giving them the impression he had money to back his plans.

The Associated Press e-mailed requests for an interview with Mohammed but they were not answered.

Dubai World's debt not addressed

Dubai officials said the city's government will not be responsible for the company's debts and Mohammed has shown little inclination over the past week to address Dubai World's debt problems directly.

When he recently came forward, he accused the media of exaggerating the situation and arguing that the market reaction showed a "lack of understanding of what is going on in Dubai."

The lack of clarity from Dubai's ruling and corporate elite has been evident over the past year, when Dubai became the Gulf region's biggest credit crunch victim.

At a rare meeting with reporters two months ago, Mohammed's answer to a question about Dubai's debt-load was: "I assure you we are all right. ... We are not worried."

By November, he had grown more testy. In a meeting with international investors in November, he switched from Arabic to English to tell naysayers in the media to "shut up." ( msn.com )

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