LONDON, Sept. 29--The wealth of UK households has been given a dramatic boost by rising house prices, says the Halifax bank. It calculates that total net personal wealth more than doubled between 1996 and 2006, to £6.336 trillion, BBC reported.
More than half that rise as due to higher house prices which pushed up the value of peoples’ homes, after mortgage debt, to £2.7 trillion. While house prices rose by 216 percent in that time, the lender says mortgage debt rose more slowly, by just 163 percent.
“The financial position of households in total has strengthened substantially over the past decade,“ said Martin Ellis, the Halifax’s chief economist. “Whilst much has been said about the rise in debt, it is important to note that the value of households’ assets has risen at a faster pace.“
Houses, estimates the Halifax, now make up 43 percent of the UK population’s total personal wealth, rather than the 26 percent they accounted for in 1996. Even so, other assets have become more valuable too, though not quite as fast. Cash savings doubled in the decade from 1996, and together with other things such as shares and pensions are now valued at a net £3.634 trillion.
These non-property financial assets now account for 57 percent of all personal wealth.
Other figures, published by HM Revenue and Customs, show how rising house prices have provided a tax bonanza for the government.
Stamp duty on residential property sales in the UK brought in £6.44 billion for the chancellor in the last financial year, 2006-07. That was more than double the level seen five years earlier in 2001-02, when this tax take stood at £2.69 billion.
The basic rate of stamp duty is 1 percent on sales worth more than £125,000. But higher rates were introduced in 1997, taxing sales above £250,000 at 3 percent, and those above £500,000 at 4 percent.
These rates have not changed since then, so with a quarter of all house sales now being valued at £250,000 or above, the government’s take from stamp duty is now booming.

Dmitri Medvedev

MOSCOW, Sept. 29--Russia sees EU plans to limit foreign investment in its energy sector as violating free market principles and will respond if the measures are enacted, a top Russian official warned. “It has unfortunately become fashionable among various states to take decisions limiting foreign investment“ in the energy sector, First Deputy Prime Minister Dmitri Medvedev was quoted as saying by Russian news agencies, AFP wrote.
“Such processes are taking place in united Europe. We think this is contradictory firstly to the spirit of globalization and, secondly, to the principle of the open market,“ the agencies quoted Medvedev as saying.
Medvedev said Russia “will be obliged to react“ if the EU plans are adopted.
The measures Medvedev was referring to were contained in sweeping EU plans to shake up the energy sector, including a call for major gas and electricity suppliers in the bloc to divest themselves of their pipelines and power grids.
To avoid non-EU firms snapping up energy transport networks spun off in Europe, the EU Commission proposed that foreign groups would have to prove that they did not own gas supply or power generating activities. “We need to place tough conditions on ownership of assets by non-European companies to make sure that we all play by the same rules,“ EU Commission chief Jose Manuel Barroso said earlier this month.
The restrictions on foreign companies are widely seen as designed to keep companies such as state-owned Russian energy giant Gazprom and Algerian state oil and gas group Sonatrach from gaining control of gas taps for European consumers.
Gazprom chief executive Alexei Miller said Friday that the group was studying the EU plans closely. “The draft for such decisions appeared last week. These documents are now with Gazprom. We are analyzing them and will share our point of view on them in the very near future,“ Miller said.
Russian media earlier this month said that the EU plans to overhaul the bloc’s energy sector would create an “energy iron curtain“ that would effectively shut out foreign companies.
The plans had put Gazprom in “open confrontation“ with the 27-nation bloc, the liberal daily Gazeta commented on September 20.

Dominique Strauss-Kahn

WASHINGTON,
Sept. 29--The International Monetary Fund appointed Dominique Strauss-Kahn its new chief Friday as the battered institution seeks to redefine itself in the face of increasing skepticism globally. The IMF executive board said it had chosen “by consensus“ the French Socialist former finance minister as managing director for a five-year term, starting November 1, to succeed Rodrigo Rato of Spain, AFP reported.
“I am determined to pursue without delay the reforms needed for the IMF to make financial stability, serve the international community, while fostering growth and employment,“ Strauss-Kahn said in a statement after the announcement.
Strauss-Kahn, 58, had been widely expected to get the job after he gathered support from Europe and the United States, the powers that still dominate the IMF.
The Bretton Woods institution, created in 1944, is seeking to redefine its role in a globalizing world reshaped by the rising economic clout of developing countries like China, India and Brazil.
Strauss-Kahn has pledged to be a “consensus-builder“ at the 185-nation financial institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital.
The European Union candidate said his election by the 24-member board of executive directors was “a joy, honor and responsibility.“
His sole rival for the job had been Josef Tosovsky, a former Czech central bank chief proposed last month by Russia. Tosovsky’s own country had not backed him.
After his nomination in July, Strauss-Kahn traveled the globe visiting a host of countries, many of them emerging or middle-income economies, in search of support.
On Thursday, Brazil--Latin America’s regional powerhouse--along with Argentina and Chile officially backed Strauss-Kahn, who was first proposed by French President Nicolas Sarkozy.

A postal worker picks up mail at a post office in Saikai, western Japan.

TOKYO, Sept. 29--Tiny Shirogane post office in a quiet Tokyo neighborhood, with just three clerks and one ATM, might seem far removed from the world of global finance. But when Japan Post is privatized on Monday, the Shirogane office will become part of the world’s biggest commercial bank--with assets of 349.82 trillion yen (US$3.03 trillion, 2.14 trillion euros)--in a move intended to inject competition into Japan’s banking sector, AP reported.
“Our customers will soon experience the merits of privatization,“ Yoshifumi Nishikawa, president of Japan Post, said Friday at his final press conference before the reforms kick in. “They will see a better quality of services, or new products--in short, more convenience.“ The massive changeover is the result of 2005 reforms instituted by then-Prime Minister Junichiro Koizumi, a former post and telecommunications minister who championed the issue in his landslide elections victory that year.
Much more is at stake than just stamps and letter deliveries: Japan Post operates a bank with more than 400 million accounts. Its 24,500 offices nationwide act as sales agents for insurance and investment products.
For millions of rural Japanese, the post office is their only bank, and the system’s ubiquitousness has made it a symbol of a benevolent government ready to cater to every citizen’s needs.
“The post office is such a basic necessity,“ said Kazuko Nishina, 36, an accounting clerk, who was withdrawing cash from her savings account at the Shirogane post office. “I’m still not sure what’s going to happen with privatization, but I hope there aren’t any surprises for ordinary customers,“ she said.
Changing such an entrenched system has been tough. When Koizumi pushed through the reforms in 2005, critics warned privatization would reduce services, especially to the countryside. Even lawmakers within his own ruling party vilified the reforms as another attack by modern times on an orderly, secure society.
But Koizumi argued the government guarantee on postal savings had encouraged generations of Japanese to park their money in the low-interest accounts, creating a stagnant pool of savings and diverting funds away from more productive investments such as stocks and mutual funds.

BEIJING, Sept. 29--China on Saturday launched its long-awaited state investment company which is intended to manage around $200 billion of its massive foreign exchange reserves. The China Investment Corp. will be headed by Lou Jiwei, a former vice finance minister, according to a statement issued by the new company.
China’s reserves, the world’s largest, surpassed $1.33 trillion at the end of June, with about 70 percent generally believed to be held in US dollar denominated paper, principally US government bonds.
The new agency is tasked with diversifying and maximizing returns on part of the country’s huge forex reserves.
It has already invested three billion dollars of foreign exchange reserves in US private equity group Blackstone in May despite not yet being formally launched.
Even though the company is backed up by the Chinese government, it will operate “in a completely commercial“ environment, according to state-run Xinhua news agency. “It will deal with its forex investment business independently by persisting in the principle of separating government functions from company management,“ an unnamed source told Xinhua.
The company will try to maximize the proceeds via long-term investments “within a range of acceptable risks“, according to the sources.

NEW YORK, Sept. 29--Gold rose on Friday to the highest level since 1980 as the US dollar scavenged new lows against the euro and oil prices held over $80 a barrel.
Gold price soard above $700/oz.
Commodities closed the last trading day of the third quarter with substantial gains, despite a bumpy ride through August when concerns about credit availability roiled financial markets. Crude oil prices fell at the close on Friday, while gold prices and wheat finished higher--but all were stand-out gainers during the quarter, AP reported.
The ability of many commodities to endure the exceptional volatility in financial markets this quarter reflects the strong global growth in developing countries such as China, India and Russia, said John Derrick, director of research with US Global Investors. China is now the lynchpin, as its demand for raw materials drives wealth creation elsewhere, he said. “There is a lot of concern about a slowdown in the US,“ Derrick said. But commodities durability during the quarter is a good example of how the growth overseas more than makes up for the slower growth here.
Gold prices climbed as investors sought shelter from a weakening dollar. The dollar’s decline against the euro has been precipitous this week; the greenback has carved out new lows for seven straight trading days. On Friday, the euro bought more than $1.42.
There were signs of strong gold demand from India this week, said Tom Pawlicki, an analyst with MF Global in Chicago. India, the world’s largest gold consumer, is in the midst of its wedding and festival season, a traditional time of gold-buying for gifts and investment. A revved-up economy and healthier rupee have augmented India’s buying power.
December gold advanced $10.10 to $750 an ounce on the New York Mercantile Exchange--the highest since gold spiked above $850 in January 1980, according to Thomson Financial data. December silver jumped 27.5 cents to close at $13.92 an ounce. Gold and silver ended the quarter up 15 percent and 13 percent, respectively.

FRANKFURT, Germany, Sept. 29--Germany expects an essentially balanced budget this year, for the first time since its reunification in 1990 and nearly three years ahead of schedule, a finance ministry spokesman said. The budget should have a “deficit of at most 0.1 percent of gross domestic product,“ he said, compared with the latest official forecast of a much larger deficit of 1.2 percent of GDP, AFP reported.
“The main reason (for the improvement) is an increase in fiscal receipts, which show a surplus of 15.5 billion euros ($22 billion) compared with our last evaluation,“ the spokesman said.
The public accounts include spending at the federal, regional and local levels, as well as the social security budget.
Tax receipts have grown as the German economy has improved while the social spending budget has decreased owing to continuous improvements in unemployment.
On September 4, Finance Minister Peer Steinbrueck said the budget should be “slightly in the black“ in 2008 if economic growth remained solid.
Berlin had cautiously forecast a balanced budget for 2010 after narrowing the public deficit to 1.6 percent of gross domestic product in 2006.
Under the terms of the European Stability and Growth Pact, eurozone countries are not allowed to run up deficits in excess of 3.0 percent of GDP, and are bound to work towards a balance or even a surplus in times of economic growth. Germany, the pact’s main architect, had broken that rule for four straight years starting in 2002.

AMMAN, Jordan, Sept. 29--The first shipment of Iraqi crude oil arrived in Jordan Friday after a four-year hiatus following the 2003 US-led invasion of Iraq, an energy ministry spokesman said. Energy Ministry spokesman Maher al-Shawabkeh said eight trucks loaded with Iraqi crude oil arrived at the Iraqi-Jordanian border. “It’s the first batch of an expected 166 tankers, which Iraq is sending to Jordan,“ he said, AP reported.
The oil is part of an agreement signed between Jordan and Iraq during a visit by Jordanian Prime Minister Marouf al-Bakhit to Baghdad in August 2006.
Before the war started in 2003, Iraq covered all of Jordan’s oil needs, delivering a portion for free and the rest at about one-third the world market price because of the neighbors’ close ties and Iraq’s history of providing Jordan with inexpensive oil.
When the supply was halted at the outset of the war, Saudi Arabia, Kuwait and the United Arab Emirates stepped in for a year to provide the cash-strapped kingdom with oil at prices believed to have been below market levels.