Latheef's Web Log

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around. 1) There were 3 citizens living on this island country.. A owned the land. B and C each owned 1 dollar. 2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar. * The net asset of the country now = 3 dollars. 3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars. *A has a loan to C of 1 dollar, so his net asset is 1 dollar. * B sold his land and got 2 dollars, so his net asset is 2 dollars. * C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar. * ...

Two of the biggest fallers were the Gulf emirate's property giant Emaar and construction firm Arabtec. Shares also fell heavily in several Middle East exchanges including Abu Dhabi, Egypt, Qatar and Saudi Arabia. The Saudi slide came despite assurances from officials that the country was not exposed to the global financial crisis. The Dubai Financial Market sank to 3,043 by mid-morning with prices of all 27 quoted shares falling. The market fell by 5.1% on Tuesday. Foreign investors are reportedly selling interests in Dubai amid fears of weakness in the emirate's construction bonanza and a greater exposure to global markets than its Gulf neighbours. Unwarranted falls Saudi Arabia's stock exchange - the Middle East's largest - fell by more than 7.5%, trading below the 6,000-point mark for the first time since 2004. Saudi central bank deputy governor Mohammed al-Jasser tried to reassure investors, saying the country had no liquidity problems and was safe from the financia...