W.I.L. Offshore News Digest :: February 2009, Part 3

THE LOOMING COLLAPSE OF EUROPEAN BANKING

The euro currency has been an experiment from the get-go, and many naysayers have warned that the currency might not survive its first major crisis. Gary North thinks the crisis may be upon us.

The degree to which various European banks -- Swiss, British, and those in the Euro-bloc -- are being revealed to have joined the North American mortgage credit orgy and put their capital at risk has already surprised us. But this may not be the biggest source of loan losses going forward. Now losses from loans made to "Emerging Europe" are threating to explode. The booms some European countries such as Ireland experienced were fed by external investment, whose availability derived in good part from a surfeit of created euros -- similarly to the U.S. credit bubble. The same thing is happening to these countries as happened to the U.S. housing market when the credit ran out.

When it becomes apparent how massive these loan losses are what happens to the European banks whose net worth (and cash flow) plunges into negative territory? The European Central Bank is not a lender, i.e., printer, of last resort like the U.S. Federal Reserve. Thus it does not even have the capacity to deal with problems by papering them over and deferring the costs to another day (when it will be their successors' problem). One estimate of the size of the loan losses is so huge that even that would not necessarily be a useful option here.

Bottom line: Be careful about how much of your liquid net worth you keep in euros, and be careful about which European banks you maintain accounts in. Also, see next week's Offshore News Digest for more coverage of the European economic and banking crisis, here.

The banking system of Europe is at the edge of the abyss. A brief story by The Telegraph revealed this last week. The original was almost immediately deleted. A new version was substituted.

You can see the original headline on Google:

European banks may need £16.3 trillion bail-out, EC document warns ...

There are dozens of these links. I read the story last week. I saved the link. But, lo and behold, when I clicked my saved link on Monday morning, the story did not mention a specific figure.

There was a reason for this. The editors at The Telegraph had taken out the following paragraphs:

European Commission officials have estimated that impaired assets may amount to 44% of EU bank balance sheets. The Commission estimates that so-called financial instruments in the trading book total £12.3 trillion (13.7 trillion euros), equivalent to about 33% of EU bank balance sheets.

In addition, so-called "available for sale instruments" worth £4 trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.

Fortunately, web sites around the globe have posted the deleted paragraphs.

Fortunately, web sites around the globe have posted the deleted paragraphs.

Converted into dollars, £16.3 trillion are the equivalent of $25 trillion.

The original paragraphs can be found in several links in the Google list of headlines.

Why did the editors do this? A call from some government bureaucrat? Or the realization that the article might start a bank run? I think the latter. In either case, it is scary.

The current article begins with a lie: "Last updated: 6:34 GMT, 11 February 2009."

What the European Establishment Is Facing Now

The original February 11 story was a shocker. The author claims to have seen a secret European Commission report. The report estimates that losses (write-downs) by European banks will be in the range of $25 trillion.

If true, then to save the banking system, European governments will have to find an extra $25 trillion, fast. There is only one source of such funding: the central banks, mainly the European Central Bank (ECB).

For comparison's sake, consider the $700 billion banking bailout in the United States last fall. Of this, only about half has been spent. That was sufficient bailing wire and chewing gum to keep the American banking system going. More will be needed, but so far, this has sufficed. The Federal Reserve did a lot of asset swaps in 2008 -- Treasury debt for toxic assets -- and pumped in an extra trillion dollars or so. But the system has held.

Adding these together -- the increase in the monetary base and $350 billion in bailout money -- the total is around $1.5 trillion. Then think "$25 trillion." This is a sobering thought for some, and a reason to get unsober, fast, for others.

The European Central Bank will have to serve as the lender of last resort. There are over a dozen national EC governments. How will they coordinate their respective bailouts? Think of a dozen Barney Franks and a dozen Nancy Pelosis. Think of a dozen Henry Paulsons. Think of a dozen Gordon Browns. Terrifying, is it not?

Here is the story, as airbrushed by the editors.

"Estimates of total expected asset write-downs suggest that the budgetary costs -- actual and contingent -- of asset relief could be very large both in absolute terms and relative to GDP in member states," the EC document, seen by The Daily Telegraph, cautioned.

Very large? That is it? Just very large? $25 trillion in losses are merely very large? That is twice the size of the GDP of European Union.

It is not as though there is a lot of time to deal with this. Bank runs can take place very fast. What if Europeans try to pull out currency? There will not be enough currency. So, they will move their assets to American or Japanese banks. They will have to sell their domestic currencies to buy dollars and yen. The euro will crater.

"It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems."

Wait a minute. If asset relief is not on this scale, then what will sustain a bankrupt European banking system? You are telling me that these banks are sitting on top of $25 trillion in losses, and this can be concealed? Does no one audit these banks?

The secret 17-page paper was discussed by finance ministers, including the Chancellor Alistair Darling on Tuesday.

National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors -- particularly those who lend money to European governments -- have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back.

National leaders apparently have a clear perception of the public's lack of faith in specific governments' ability to repay. But that does not answer the crucial question: "What are the depositors' fears regarding their individual banks?" It is one thing for a government to be unable to pay back loans over the next two decades. Of course they will not pay it back. No national debt is ever paid back. It is rolled over. It is another thing to deal with bank runs.

The Commission figure is significant because of the role EU officials will play in devising rules to evaluate "toxic" bank assets later this month. New moves to bail out banks will be discussed at an emergency EU summit at the end of February. The EU is deeply worried at widening spreads on bonds sold by different European countries.

In line with the risk, and the weak performance of some EU economies compared to others, investors are demanding increasingly higher interest to lend to countries such as Italy instead of Germany. Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart.

Ministers and officials have got the picture. They are facing a breakdown of Europe's economy. If the bailouts are insufficiently large in every nation to reduce depositors' fears regarding their banks, there will be a rush out of the euro and into dollars and yen. If the bailouts are sufficiently large to stem the tide on bank fears, then there will be a rush by bond investors out of government bonds. This will make the existing recession much worse.

If each country has widely different rates, the euro will break down. The poorer countries will borrow at low rates from the European Central Bank. The Germans will revolt. They could demand an end to the ECB, which will have become a welfare agency for the Mediterranean governments. That would end the euro. That would end the attempt to create a new European order. This thought brings to mind one of Johnny Mercer's masterpieces.

So you met someone who set you back on your heels -- goody, goody
You met someone and now you know how it feels -- goody, goody
You gave him your heart too, just as I gave mine to you
And he broke it in little pieces, now how do you do?

You lie awake just singing the blues all night -- goody, goody
And you think that love's a barrel of dynamite
Hooray and hallelujah, you had it coming to y'a
Goody goody for him, goody goody for me
I hope you're satisfied, you rascal you,
I hope you're satisfied 'cause you got yours

But I digress.

"Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance," the EC paper warned.

These considerations are indeed important. But solutions are a lot more important. The report is 17 pages long. The solutions -- if any -- will be a lot longer.

So Far, So Good

So far, the euro has not collapsed. It has fallen, but there is no rush for the exits. Why not? These answers come to mind.

1. The story is not true: no such document.
2. The document is wrong: banks are not really that much in the hole.
3. The banks are in the hole, but public faith in their governments remains high.
4. The report is true, but it is not believed by currency speculators.
5. The report is true, but currency speculators believe that the governments and central banks can handle it without major shifts in currency values.

European bank stocks have fallen since the article was published, but they are not in free-fall.

In my view, the European public still has faith that the governments and the central banks will successfully intervene to restore commercial banks. But if the original article was correct, that 44% of bank balance sheets have disappeared, then the public is living in la-la land. The entire structure of Europe's capital markets is at risk. Or, I should say, what remains of the capital markets is at risk.

How are governments going to replenish lost capital? It is gone. It is missing in action.

Eastern Europe

Ambrose Evans-Pritchard has explained this in a Telegraph article published on February 15.

If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Gotterdammerung.

He was referring to loans to Eastern Europe. He used Austrian banking as the example.

The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10% and may reach 20%. The Vienna press said Bank Austria and its Italian owner Unicredit face a "monetary Stalingrad" in the East. ...

Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay -- or roll over -- $400 billion this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut.

Not even Russia can easily cover the $500 billion dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36% of its foreign reserves since August defending the rouble.

"This is the largest run on a currency in history," said Mr Jen.

This reminds me of the bankruptcy of Long-Term Capital Management in 1998. That hedge fund had bought ruble-denominated assets on a leveraged basis: 30 to one. When the Russian central bank failed to defend the ruble, LTCM went bust in a few days. It had to be bailed out by $3.6 billion in loans from New York banks. Today, the European banks are gutted, not a lone hedge fund.

Russia is going belly-up. It will have to liquidate most or all of its reserves of Western currencies. It has stopped buying U.S. Treasury debt. It is selling.

In Poland, 60% of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly -- by lenders and borrowers -- it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. U.S. banks are not.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74% of the entire $4.9 trillion portfolio of loans to emerging markets.

They are five times more exposed to this latest bust than American or Japanese banks, and they are 50% more leveraged (IMF data).

This is the ringing of the bell. The bell of the Great Depression of the 1930's rang on Wall Street in October 1929. But that was not the cause of the Great Depression. The causes were these: (1) monetary base expansion in the 1920s, (2) the cessation of this expansion in 1929; (3) the governments' raising of tariff and trade barriers in 1930 all over the West, and (4) the collapse of the Austria's Credit Anstalt Bank in 1931. In the USA, we saw the first two, 2000–2007.

Central banks will inflate to keep any major bank from collapsing. But the trend is ominous. Russia and Eastern Europe are gonners. European banks that lent to them are, too. So is the purchasing power of the euro -- and maybe even the actual euro. I can see Germany cutting and running sometime before 2011. Evans-Pritchard pulls no punches. This is a gutsy forecast.

Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.

If he is correct about the inability of the ECB to imitate the Federal Reserve System, this means a collapse of the banks. That means the collapse of Europe's economy.

"This is much worse than the East Asia crisis in the 1990s," said Lars Christensen, at Danske Bank.

"There are accidents waiting to happen across the region, but the EU institutions do not have any framework for dealing with this. The day they decide not to save one of these one countries will be the trigger for a massive crisis with contagion spreading into the EU."

He ends with this: "If one spark jumps across the eurozone line, we will have global systemic crisis within days. Are the firemen ready?"

The capital markets do not indicate agreement with his assessment. People still trust the banking system. Generally, I trust capital markets rather than journalists. But I think the report is too explosive to ignore. I think the optimism of investors is greater than the optimism of European bankers, bureaucrats, and newspaper editors.

Conclusion

The West's economy really is at the edge of a leveraged disaster. The politicians know only one answer: deficit spending. The central bankers have only one significant tool: monetary inflation. The speed of events is increasing.

The markets do not reflect this yet. This gives time to a few people to get out. But the vast majority cannot get out. There are too few escape hatches open.

A BLACK HOLE ON $10 BILLION A DAY

“I am striving ... to discover whether man still has a place in this tangle; whether he still has any authority among these colossal masses in movement; whether he still can exert any force whatever on the statistics which are slipping from his hands into the abstract and the unreal. Can he have a place, authority, and possibility of action on a better basis than ill-founded declarations of hope or blind acts of unreasonable faith?” ~~ Jacques Ellul

A friend of ours has observed that one of the consequences of having children and grandchildren is that "they give you more people to worry about." As both a father and grandfather, her observation is correct. I have long been of the view that a parent has a moral obligation not to allow his or her children to live under tyranny. My adult life has been preoccupied with this duty but, while I believe my efforts have produced some marginal benefits, Leviathan still reaches out to devour all within its grasp. My continuing focus on this danger has, at least, helped my daughters -- and hopefully, in time, my grandchildren -- to develop an awareness of the threat to their well-being posed by political systems and the uncertainties that lie before them.

It is interesting -- albeit not pleasant -- to witness the collapse of Western civilization. A vibrant system that once was productive of the material and intangible values supportive of human well-being, has reached a terminal state. Civilizing principles and practices that found sufficient -- albeit inconstant -- expression in Western societies, have deteriorated into an acceptance of corruption -- provided it is carried out in high places -- and the celebration of violence -- provided it is directed against plausible categories of wrongdoers. In such ways has the multi-trillion dollar looting of taxpayers on behalf of an entrenched corporate-state plutocracy combined with the ongoing conduct of endless wars against endless enemies to send a morally, intellectually, and economically bankrupt culture to an awaiting black hole.

As I watched politicians, members of the mainstream media, and selected academicians discuss the self-styled "stimulus" plan designed to confer trillions of dollars to the establishment's favored institutions, I found myself recalling those early days following the Bush administration's bombing of Baghdad, with thieves engaged in the wholesale looting of artifacts from the National Museum of Iraq. How fitting that Americans, with their insistence upon procedural due process, should content themselves with watching Congress carry out such pillaging on C-SPAN, with the regularities of Roberts Rules of Order being faithfully observed.

The desperation with which presidents Bush and Obama urged this grand-scale despoliation was breathtaking, with Mr. Bush going so far as to threaten a declaration of martial law should Congress not accede to his plan. Even the terminology underwent a rapid transformation: What began as a "bailout" quickly took on a bad name, and was changed to "stimulus." But who or what was to be "stimulated" remained open to question. The more uncertainty that underlay this program, the more Boobus suspected something untoward. In an effort to allay such fears, Mr. Obama spoke -- in the haziest of words -- about some "plan" being put together to save America from the effects of Newton's third law of motion.

After all, if Ozymandias is to have credibility among the dupable, its wizards must appear to be capable of designing and carrying out effective "plans." That the "plans" under consideration are but photocopies of the previous programs that created our present difficulties, is to be overlooked. The study of economics or history might inform Boobus of the vicious circle within which he is ensnared. But Mr. Obama has cautioned against listening to "ideologies," or focusing upon the past!

To characterize this so-called "stimulus" as a plan that can rectify decades of programs and policies against which free-market advocates had long warned, is to corrupt the rational and informed nature of intelligent planning. At best, the supporters of this program have offered little more than a hodge-podge of guess-work that boils down to "let us try this and see if it works." Neither is the undertaking an "investment" on behalf of taxpayers, as politicians insist on characterizing it. I recently saw a figure that the total cost of the many "bailout" packages given to corporate interests, totals some $9.7 trillion. If my math is correct, this so-called "investment" comes out to almost $33,000 per American. Do you expect to receive any dividend checks from these corporations, or be allowed to attend annual stockholder meetings to vote on new management?

There is no doubt that the corporate recipients of this booty are "stimulated" to get as much money as they can. But even the stumbling and bumbling uncertainty as to how the program will work, what criteria will be employed to determine recipients, or how the money will be used, illustrates that this program is not so much a rationally-based plan, as it is a scheme. Any pretense of this being a carefully calculated solution to a ubiquitous problem clouds its sordid reality: A last-ditch effort on the part of institutional interests to ransack the governmental treasury before the entire system collapses. The prognosis for a restoration of the economic health of the country resulting from it is no better than your submitting to brain surgery at the hands of a college freshman who has just received a B+ in a first-year biology course!

This "plan" -- like the wars whose costs have so greatly contributed to our economic woes -- is but another expression of the moral, intellectual, and economic bankruptcies that are destroying Western civilization. A productive, free, and peaceful society cannot be held together by violence, surveillance, torture, SWAT teams, lies, and prisons. Neither can it countenance governmental policies of plundering the fruits of the labors of an entire population, and redistributing it to the institutional friends of those in power.

I apologize to my children and grandchildren for failing in my moral duty to protect you from the ravages of tyranny. I shall continue in my efforts, of course, recognizing that only peaceful methods can produce a peaceful world. In the meantime, I offer you this advice:

1. never believe anything the government tells you;
2. never believe anything the mainstream media tells you;
3. pay attention to -- but be skeptical of -- those whose ideas do not conform to consensus-based definitions of reality;
4. master the art of contrary thinking, and learn to stay away from herds as well as from those who insist upon herding others into destructive, lemming-like stampedes;
5. do not put your trust in those who offer you "hope," but seek out those who will help you develop understanding;
6. be prepared -- as were your ancestors -- to move to new frontiers that are better suited to both your liberty and material well-being;
7. find, support, protect, and defend like-minded friends, being mindful of the shared origins of the words "peace," "freedom," "love," and "friend;"
8. avoid being drawn into the black hole to which our civilization is destined; whose vacuuming force is made possible by the collective energies of your neighbors; and,
9. mindful of all the above, avoid all sense of despair by combining your intelligence and emotions to help in the creation of a new civilization grounded in peace, liberty, and respect for the inviolability of the individual.

DEBT AND THE PRICE OF GOLD

Why have prices of the goods we buy risen over the past century? Why has the purchasing power of the dollar fallen?

The better we understand why this has happened, the better we can understand changes in the price of gold. The long run course of wages, rents, and consumer prices is reasonably understandable. The long-run change in gold's price is reasonably understandable. The causes of "short-term" variations in gold's price -- some running for many years -- are not as understandable. Gold is traded in a speculative market. For this reason, its price movements can never be fully understood. Speculative prices are typically forward-looking. They depend on what people expect. These expectations are unknown and changeable.

Our understanding of gold's price movements will always be partial. Because our understanding is limited, looking at alternative answers to the difficult question of price movement causation can be useful.

One answer is inflation: the FED has created too many dollars compared to the goods Americans have produced. Hence, prices rose. This is the quantity theory of money stated very simply. This theory has some worth in the long run, which is 50 years or more. The price of gold and the prices of many other goods and services have risen over many decades along with increases in the monetary base.

In an earlier article, I applied that theory. I estimated that if gold's price rose at the same rate as the monetary base had since 1932, the price of gold would be $1,099. The time between 1932 and 2006, that article's date, is 74 years. If a theory does not work given that long a time span, it probably is of questionable worth. Gold at that time was $635. Its price still has not reached $1,099, although it got to $1,025. The monetary base has now doubled since that article. The corresponding price of gold is $2,198. Maybe it will get there and maybe it will not. Maybe it will go even higher. The monetary base can shrink as well as rise. The large and extraordinary rise may prove temporary. It can also rise even more swiftly. Markets can do some very surprising things.

It is clear from this example alone that over shorter periods of time, fluctuations (or the lack of them) in gold prices occur that have no obvious or direct connection to changes in the monetary base. In the long-run, the theory gets us into the ballpark, but the ballpark is quite large. The speculative market for gold is not closely heeding my crude application of the quantity theory. The correspondence is loose. Maybe someone else can create a closer fit. Furthermore, it was not clear then and it is not clear now what measure of money to choose. The suggested price of gold using M1 in 2006 was $656, and that using M2 was $3,121. The ballpark is very large indeed.

Another answer than quantity theory is that the security behind the FED's dollars has fallen. This is the backing theory of money, which is less familiar. Professor Michael Sproul first brought this to my attention. This theory is useful because it focuses attention on the FED's balance sheet. The variables on the balance sheet are measurable. We do not face the ambiguities of the quantity theory. We face different ambiguities. At various places in past articles, I have mentioned the backing and how it has deteriorated. The rest of this article goes in a somewhat different direction.

The FED's notes, which are the currency we use daily, are its liabilities. They are only as good as the assets backing them. Those assets are securities in which the FED has invested and a certain amount of gold. Up until recently, the securities held by the FED have primarily been bills and bonds issued by the U.S. government.

Let us suppose that the FED's assets are mainly U.S. government bills and bonds. This means that the FED has made loans to the government. The government, financially speaking, is a subsidiary of the American people. Americans pay taxes and the taxes secure the government's debts. The taxes come out of the product of Americans, that is, what Americans produce.

The U.S. government has not defaulted on its debts. Why then have the FED's notes fallen in price (which is also asking why the prices of goods, including gold, have risen)? I propose that the reason for this is that the security behind the government debts that the FED carries as assets has fallen.

We can get at this in two complementary ways. One is to use the government's balance sheet, and the other is to use the balance sheet of all Americans. Take the government's balance sheet. If its debts have risen relative to its assets, then the security behind those debts has fallen. The backing theory thus leads us to look at the ratio of government debt to its assets. The government's main asset is the flow of taxes it gets from the product of Americans. Since the source of taxes is product, a measure of the quality (or security) of the government debt is the ratio of its debt to Gross Domestic Product (GDP.) However, this ratio does not get at the fact that Americans are indebted on their private account. That encumbers the GDP, since those debt payments have GDP as their source. We need to consolidate the balance sheet of all Americans with their subsidiary, which is the government. We need to look at the total debt of Americans.

The backing theory, as I see it, implies that if the ratio of total debt to GDP rises, then the value of the dollar should fall. The prices of goods and services should rise. Gold should rise in terms of dollars. The FED issues dollars as its notes, secured by government and other debts (and some gold.) As the debt to GDP ratio rises, the security behind those notes worsens, the dollar falls, and the price of gold rises in terms of dollars.

A graph of total American debt as a percent of national income (which is correlated with GDP) is here. That ratio has been on the rise for a long time. The ratio has risen from about 1.87 in 1957 to 4.75 in 2007. The result of this is that there is 5.6 times as much debt per person in real terms. The cost of living has gone up by a factor of 7.38 over the same period. Again we have a crude application of a theory, this time the backing theory, that gets us into the ballpark.

There are many difficulties in applying any theory. Measuring total debt is difficult. The annual value of American product is typically measured by GDP. That has difficulties. It also gives no role for intermediate products, and they are financed by debt. We can use GDP to measure product over time in relation to debt only if we make the gross assumption that intermediate products and their debt financing do not change their relation to GDP. A more accurate analysis should not ignore intermediate products and debt financing for them.

It is difficult to distinguish the quantity theory and the backing theory using modern data because as the money aggregates have changed, so have the debt and the backing behind the currency. Perhaps other times and places with different monetary arrangements will provide further information.

Gold is a speculative market. Price can go "too low" or "too high" compared with whatever theoretical notions we may have about what prices should be. If gold rises too fast compared to the rise of debt/GDP, then it may be overpriced. If it rises too slowly compared to debt/GDP's rise, it may be underpriced.

When gold rose sharply in 1980, the ratio of debt to income (or GDP) was already rising. Gold's price rise anticipated an even sharper rise that occurred under Reagan. Gold overshot in some sense, because it fell back and stagnated for many years. The gold price since 2001 is coincident with another sharp acceleration in the ratio of debt to income. That acceleration has not ended yet. Government debt is rising even more swiftly than under Bush. The bank credit of commercial banks is growing more slowly than in a few years, but it is still growing.

In trying to understand where the price of gold might go next, we need to recognize that gold is traded in a speculative market subject to swings that are virtually impossible to understand. Sometimes they last for a long time. Then there are supply and demand factors that I have not mentioned here at all, such as the demand for gold jewelry and the production by miners. They provide a third way of thinking about the price of gold. The two theories I mentioned are the well-known quantity theory and the backing theory. The quantity theory suggests that we pay attention to the monetary base or other monetary aggregates. The backing theory suggests that we look at indicators of the security behind government bonds, such as the ratio of total debt to GDP.

THE DAZZLING BAHAMAS: A 700 ISLAND CHAIN

A prosperous economy built on the twin pillars of offshore finance and tourism.

Caribbean Property Magazine usually includes a "country focus" set of articles. The January issue's focus was on the Bahamas, which has the 3rd highest per capita income in the Western Hemisphere after the U.S. and Canada -- a fact that had heretofore escaped our attention.

The focus is more on visiting as a tourist than moving or setting up a business there. If you are thinking of moving some place you of course might like to know just how nice a place is before you investigate further. After reading these pieces you might be tempted to pick up stakes and move to the Bahamas tomorrow.

Note, however, that the Bahamas as a place to visit versus a place to move to are not the same. From another article in the same issue of Caribbean Property Magazine we get this:

"We spent three months in the Bahamas and discovered it did not meet our initial 'must have' list as far as weather -- it is too cold in the wintertime, too windy in the summertime, plus, it is far too expensive all the time! But, the beaches are fabulous! And, it was virtually impossible to obtain a legal work status at least with our professions."

Overview

The Bahamas is one of the most geographically complicated nations. A coral-based archipelago, it is composed of more than 700 islands, 2,000 cays (pronounced "keys," from the Spanish word for small islands), and hundreds of rocky outcroppings that have damaged the hulls of countless ships since colonial days. Officially known as the Commonwealth of the Bahamas, it is an independent, sovereign, and English-speaking country.

Located in the Atlantic Ocean between Florida and Hispaniola, its total area covers approximately 100,000 square miles. The total land area is approximately 5,380 square miles, about the size of Wales or 2/3 the size of Massachusetts. The largest island, Andros, has an area of 2,300 square miles and the smallest inhabited island is Spanish Wells, with an area of 1/2 a square mile. Some of the most beautiful beaches and lagoons in the world are located in the Bahamas.

The islands of the Bahamas lie between 20 and 27°N latitude and 72 and 79°W longitude and are located southeast of the United States; north of Cuba, Hispaniola (Dominican Republic and Haiti) and the Caribbean Sea; and northwest of the Turks and Caicos Islands.

Separated from the North American continent by the Florida Channel and cooled in the summer by the northeast trade winds, the Bahamas enjoys a moderate climate. During the summer, temperatures rarely rise above 90°F, while the lowest winter temperatures vary between 40 and 50°F. Rainfall ranges between 40-60 inches a year. The Tropic of Cancer crosses the lower part of Long Island. Contrary to popular belief, the Bahamas is not in the Caribbean, but is in the Atlantic Ocean. The Bahamas have a population of 330,000, concentrated on the islands of New Providence and Grand Bahama. Andros Island is the largest island of the Bahamas and has the world's third-largest barrier reef.

The origin of the name "Bahamas" is unclear. It may derive from the Spanish baja mar, meaning "shallow seas"; or the Lucayan word for Grand Bahama Island, ba-ha-ma "large upper middle land."

The closest island to the United States is Bimini, which is also known as the gateway to the Bahamas. The island of Abaco is to the east of Grand Bahama. The southeastern most island is Great Inagua. Other notable islands include Andros Island, Eleuthera, Cat Island, Long Island, San Salvador Island, Acklins, Crooked Island, Exuma and Mayaguana. Nassau, the Bahamas capital city, lies on the island of New Providence.

All the islands are low and flat, with ridges that usually rise no more than 49 to 66 feet. The highest point in the country is Mount Alvernia, or Como Hill, which has an altitude of 210 feet. To the southeast, the Turks and Caicos Islands, and three more extensive submarine features called Mouchoir Bank, Silver Bank, and Navidad Bank, are geographically a continuation of the Bahamas, but not part of the Commonwealth of the Bahamas.

The Commonwealth of the Bahamas became a free and sovereign country on July 10, 1973 after centuries of peaceful colonial rule. After Great Britain granted the Bahamas internal self-rule in 1964, the fledgling nation adopted its own constitution but chose not to sever its ties with its motherland. It has remained in the Commonwealth, with the British monarch as its head of state, and is a member of the Commonwealth of Nations. The queen appoints a Bahamian governor-general to represent the Crown. In the British tradition, the Bahamas has a two-house Parliament, a ministerial cabinet headed by a prime minister, and an independent judiciary.

The prime minister is the head of government and is the leader of the party with the most seats in the House of Assembly. Executive power is exercised by the cabinet, selected by the prime minister and drawn his supporters in the House of Assembly. The Bahamas has a largely two-party system dominated by the centre-left Progressive Liberal Party and the center-right Free National Movement. Constitutional safeguards include freedom of speech, press, worship, movement, and association. Although the Bahamas is not geographically located in the Caribbean, it is a member of the Caribbean Community. The judiciary is independent of the executive and the legislature. Jurisprudence is based on English law. From a demographic perspective the Bahamas is comprised of 85% Blacks, 12% Whites, and 3% Asian and Hispanic. There are over 5,500 British residents in the Bahamas.

Unlike nations such as Haiti and Jamaica, the Bahamas has a history of political stability and made the transition from minority white rule to black majority rule with relatively little tension.

History

Unlike most islands in the Caribbean region, the Bahamas has had a fairly peaceful, non-violent past. It is thought to be first occupied by the seafaring Taino people who moved into the uninhabited southern Bahamas from Hispaniola and Cuba around the 7th century AD. They relied on the ocean for food. From around 900—1500 AD the Lucayan Indians settled here. Known for being peaceful, they were also politically, socially and religiously advanced.

In 1492, Christopher Columbus made landfall in the New World on the island of San Salvador (known to the Lucayans Guanahani) and which is generally accepted to be present-day San Salvador Island (also known as Watling Island) in the southeastern Bahamas. Here, Columbus made first contact with the Lucayans and exchanged goods with them. Inspired by the surrounding shallow sea, he said "baja mar" (shallow water). The country then became known as the Bahamas, or The Islands of the Shallow Sea.

When Columbus arrived, there were about 40,000 Lucayans. Columbus took advantage of their peaceful nature and enslaved them. Within 25 years, all of the Lucayans were wiped out due to the diseases, hardships and slavery they endured.

The Spaniards followed Columbus and depopulated the islands, carrying most of the indigenous people off into slavery. It is generally assumed that the islands were uninhabited until the mid-17th century. However, recent research suggests that there may have been attempts to settle the islands by groups from Spain, France, and Britain, as well as by other Amerindians.

In 1648, the Eleutherian Adventurers migrated from Bermuda. The Adventurers -- who were English -- established the first permanent European settlements on an island which they named Eleuthera. The name derives from the Greek word for freedom. They later discovered New Providence but named it Sayle's Island in honor of Captain William Sayles.

These English were in search of religious freedom. Instead, they found food shortages. To survive, the settlers salvaged goods from wrecks. Captain William Sayles sailed to the American colonies for help and received supplies from the Massachusetts Bay Colony. Upon his return, the settlers thanked the American colonies by shipping them brasileto wood. The proceeds helped purchase land for what later became Harvard University. In 1670 King Charles II granted the islands to the Lords Proprietors of the Carolinas, who rented the islands from the king with rights of trading, tax, appointing governors, and administering the country. During proprietary rule, the Bahamas became a haven for pirates, including the infamous Blackbeard.

During the late 1600s to early 1700s, many privateers and pirates came here. The most famous ones being Blackbeard and Calico Jack. There were also female pirates like Anne Bonny and Mary Read disguised as men.

The shallow waters and 700 islands of the Bahamas made great hiding places for treasure. And its close proximity to well-traveled shipping lanes made for the perfect spot to steal from merchant ships. There are rumors of hidden treasure that still exist today. It is believed that British pirate William Catt buried loot on Cat Island and Sir Henry Morgan, a wealthy privateer, buried treasure throughout our islands.

Established around 1670 as a commercial port, Nassau was overrun by lawless, seafaring men. Years later, Nassau was destroyed twice -- once by Spanish troops, the other time by French and Spanish navies.

Soon after, pirates began looting the heavily laden cargo ships. To restore orderly government, the Bahamas was made a British crown colony in 1718 under the royal governorship of Woodes Rogers, who, after a difficult struggle, succeeded in suppressing piracy. Upon his appointment by the King of England to serve as Royal Governor, Woodes Rogers was to restore order. And he did. He offered amnesty to those who surrendered. Those who resisted would be hanged. 300 pirates surrendered and the rest, including Blackbeard, fled.

During the American Revolutionary War, the islands were a target for American naval forces under the command of Commodore Ezekial Hopkins. The capital of Nassau on island of New Providence was occupied by U.S. Marines for a fortnight.

More than a century later, American colonists loyal to Britain arrived in Eleuthera. Many brought their slaves as well as their building skills and agriculture and shipbuilding expertise. These greatly influenced Eleutheran life. In 1783, they solidified their independence and forced the retreat of the Spanish forces from the region without firing a shot.

After the American Revolution, some 7,300 loyalists and their slaves moved to the Bahamas from New York, Florida and the Carolinas. These Americans established plantations on several islands and became a political force in the capital. The small population became mostly African from this point on.

In 1782, after the British defeat at Yorktown, a Spanish fleet appeared off the coast of Nassau, which surrendered without fight. But the 1783 Treaty of Versailles -- which ended the global conflict between Britain, France and Spain -- returned the Bahamas to British sovereignty.

The British abolished the slave trade in 1807, which led to the forced settlement on Bahamian islands of thousands of Africans liberated from slave ships by the Royal Navy. Slavery itself was finally abolished in the British Empire on August 1, 1834.

From 1861 to 1865, the islands Of the Bahamas benefited greatly from the U.S. Civil War. Britain's textile industry depended on Southern cotton; however, the Union blockaded British ships from reaching Southern ports. So blockade runners from Charleston met British ships in the Bahamas and traded cotton for British goods. Upon their return, they sold their shipment for huge profits. The end of the Civil War marked the end of prosperity.

An economic upswing occurred in 1919, when the United States passed the 14th amendment prohibiting alcohol. The colonial government expanded Prince George Wharf in Nassau to accommodate the flow of alcohol. When Prohibition ended in 1934 so did the enormous revenues. Combined with the collapse of the sponge harvesting industry, it economically devastated the Bahamas.

Modern political development began after the Second World War. The first political parties were formed in the 1950s and the British made the islands internally self-governing in 1964, with Roland Symonette of the United Bahamian Party as the first premier.

In 1967, Lynden Pindling of the Progressive Liberal Party became the first black premier of the colony, and in 1968 the title was changed to prime minister. In 1973, the Bahamas became fully independent, but retained membership in the Commonwealth of Nations. Sir Milo Butler was appointed the first black governor-general (the representative of Queen Elizabeth II) shortly after independence.

Economic Freedom

The prosperity of the Bahamas has been tied to the United States due to the proximity of location which has provided both a negative and positive economic impact during times of war, illegal liquor trade and the growth of a major tourism industry.

The Hotel and Steam Ship Service Act of 1898 opened the doors to the Bahamas to the world. This act provided the government support needed for the construction of hotels and subsidized steamship service.

Since then, everything from Prohibition bringing well-to-do Americans to the closure of Cuba to Americans has positively impacted tourism in our country.

In the 1960s, the country enjoyed robust growth averaging 9% annually as direct foreign investment spurred the development of tourism. A global economic downturn after the 1973 oil price shock coincided with Bahamian independence and led to a drop in foreign investment.

Toward the end of that decade economic performance improved, led by growth in tourism. Real GDP growth in the 1980-84 period averaged 3%, but declined in the late 1980s. GDP growth was 0.3% in 1995 and accelerated to 6% in 1999. After 9-11 the economy slumped temporarily due to travel fears, but began growing again in 2002. Bahamas is now more commonly known as a popular destination amongst the rich and powerful business families of the Americas.

The Bahamian dollar is pegged to the U.S. dollar, and U.S. notes and coins are used interchangeably with Bahamian currency for most practical purposes. However, government exchange controls still apply for the purchase of foreign currency.

The Bahamas has the 3rd highest per capita income in the Western Hemisphere (after the U.S. and Canada).

The Bahamas is classified as an upper middle-income developing country and has the 3rd highest per capita income in the western hemisphere (after the United States and Canada). Tourism is the primary economic activity, accounting for about two thirds of the gross domestic product (GDP). Offshore finance is the 2nd largest industry, accounting for about 15% of GDP.

Historically, most development in the Bahamas has occurred on New Providence and Grand Bahamas, causing significant migration from the Family Islands to these two urban centers and straining their infrastructure. The government is also faced with the burden of duplicating facilities and services throughout the archipelago. Aside from these challenging infrastructure problems, the Bahamas also has experienced challenges in areas of upgrading education and health care while also fighting international narcotics trafficking and illegal immigration from Haiti.

The government continues to promote tourism and financial services while aiming for greater diversification through agriculture, fishing, manufacturing and e-commerce. Significantly, there is no income, corporate or capital gains tax in the Bahamas. Government revenues are derived from import tariffs, excise taxes, property taxes, business licenses and fees.

The Bahamas is a 700-island chain that not only has one of a kind white sand beaches and dazzling sites -- it has a prosperous economy built on the twin pillars of offshore finance and tourism.

Escape to the Bahamas

Need to relax? Need an escape? If you have never been to the Bahamas, you do not know what you have been missing. The Bahamas have some of the major tourist destinations in the world, and they offer a truly unique experience. Many people dream of a vacation in the Bahamas, whether they get there through business or pleasure.

The Bahamas is a tropical paradise made up of 700 islands sprinkled over 100,000 square miles of ocean. An ecological oasis featuring 2,000 breathtaking cays. An archipelago featuring the clearest water on the planet -- with a visibility of over 200 feet, you can easily see your toes. And, the world's 3rd largest barrier reef.

Your options are limited only by your imagination. The beaches are second to none, and strolling through the gentle wavelets where ocean meets land is an experience you will not want to miss. If you like to sunbathe, there are tons of deserted (or relatively deserted) beaches. Grab a section of beach to yourself, and enjoy some sun! If you like to golf, there are several world-class golf courses located in the Bahamas. If you prefer gambling, there are several casinos that offer all sorts of sports betting, slot machines and table games to keep you busy for as long as you want to linger.

The locals are friendly, and they love welcoming new visitors. Shopping is truly a unique experience, with many shops that offer items you cannot get back home -- and it is duty free shopping of course. English is the primary language in the Bahamas, so you do not need to worry about a language barrier.

The Bahamas is well known all around the world as one of the greatest travel destinations, and one of the main reasons is because of its pristine beaches and natural wonders. At the Bahamas, you can spend your vacation at the beach sipping tropical drinks or you could dive and discover the marine life that abounds near its shores. Whatever the reason, the Bahamas always offers a well deserved time for rest and relaxation ... and escape!

When to Go

The Bahamas are blessed with beautiful sunny weather and relatively constant temperatures year-round. The high season for travel runs from the middle of December to mid-April, when people in the northern hemisphere try to escape the chilly temperatures back home. Airfares are highest during these months. Fares drop during the May to September period, called the "shoulder season" in the industry, and you can get the best prices during the low season from October to mid-December. It is good to remember that flying on weekends ordinarily adds a few dollars to the fare.

Top Ten Must See and Do List

With that in mind here is your Top Ten Must See and Do List while visiting the paradise known as the Bahamas:

1. Beaches in Bahamas
   At more than two miles long, Cabbage Beach is dotted with tropical trees such as coconut, casuarinas and sea grape. Paradise Beach, near Atlantis Resort, is also a great beach destination for tourists, especially for those staying at the hotel. Other popular beaches here are the Gold Rock Beach, Xanadu Beach and Lucaya Beach.
2. Lucayan National Park
   In this park, tourists can enjoy a myriad of activities. The activities include spelunking or cave exploration where you will see the interesting rock formations in the caves and kayaking down a mangrove lined creek. Swimming in the beaches lined with coral sands is, of course, the most popular.
3. Andros Island
   In this island, you can go snorkeling and diving to see the abundant and diverse marine life in its shores. In fact, the island boasts of one of the largest barrier reefs in the world. In this reef, you will see Elkhorn corals and other coral formations stretching out more than 100 miles.
4. Blue Lagoon Island
   The Blue Lagoon Island located in Nassau showcases dolphins that you can swim with, play with or ride. For the less courageous, there are docks where you can relax while watching these wonderful animals. You also get to enjoy the beautiful scenery this offers.
5. Paradise Island Outdoor Aquarium
   This popular tourist destination has 11 exhibit lagoons where tourists can see 200 species of different marine animals. The Acrylic tunnels that undermine the sea creatures' habitat enable tourists to see piranhas, lobsters, jellyfish, green eels, sharks, giant groupers. You can see many other creatures as well in their natural habitats.
6. Pirates of Nassau
   Prepare to be enthralled and fascinated by the life of pirates in this venue located at the heart of downtown Nassau. Here, tourists are taken into an educational program that educates people about the life of pirates through interactive programs. This is a great way to get to know Bahamas' culture more.
7. Bahamas Historical Society Museum
   This historical museum showcases exhibits that show the island's history from the time of Columbus to the present. Here, you will see scores of Lucayan-Taino-Arawak artifacts. The artifacts here give tourists a glimpse of the lives of the people in the distant past.
8. The Pompey Museum of Slavery and Emancipation
   This museum located in Vendue house was once the place where slave auctions and sales of goods from shipwrecks were held. Today, the place serves to educate people on the rich history and culture of the Bahamas. Artistic works of famous Bahamian artist Amos Ferguson is also showcased in this museum.
9. Crystal Cay
   This place is an aquarium and a zoo spanning the whole of New Providence Island. Here, you can view the fascinating animals either by going up the 100 feet high observation towers or go down a staircase for a view of the corals, tropical fishes, sponges and other marine life. You can reach this island through Nassau docks or through Arawak.
10. Fort Charlotte
    Fort Charlotte is a military site located in West Bay Street and Marcus Bethel Way in Nassau. It was built sometime in the late 18th century and was named after George the Third's wife. Here, you can take a scroll and see the waterless moat, dungeons, drawbridge and ramparts.

Main Island and Main Towns

There are two main islands: New Providence Island and Grand Bahama Island. There are also several smaller islands, which include Abacos, Acklins, Andros, The Berry Islands, Bimini, Cat Island, Eleuthera, The Exumas, Inagua, Mayaguana, and San Salvador. All of the islands offer beautiful sites and feature crystal turquoise waters, endless stretches of white sand beaches and beautiful weather combine to create an escape that is hard to duplicate anywhere else.

Most people believe that Nassau really is the true Bahamas. You would think a city so close to the U.S. mainland would have been long since overpowered by American culture. Yet, except for some fast-food chain outlets, American pop music, and Hollywood films, Nassau retains a surprising amount of its traditionally British feel. By contrast, Freeport/Lucaya on Grand Bahama Island has become almost completely Americanized, with little British aura or Bahamian tradition left! So it is certainly worth visiting both main towns to enjoy the differences!

Nassau, New Providence

The capital city of the Bahamas is found on its 11th largest island, New Providence. Nassau's history can be traced back to days of the legendary pirate Blackbeard. Its sheltered harbor, mansions, cathedrals and 18th-century fortresses have been beautifully preserved. Now if you only get to Nassau, and do not have the opportunity to visit all of the experiences listed on the Top Ten "must see and dos" list, you need to at least ensure you get to the ones offered in Nassau.

Your Nassau must see and must do activities include:

Paradise Island
Once known as Hogg Island, Paradise Island is 685 acres of pure bliss connected to Nassau by two bridges. The island was developed almost exclusively to delight and entertain visitors.

Bay Street
Shops, pubs and cafes line Nassau's historic Bay Street. Considered the city's "Main Street", it has maintained its historic feel while offering all the amenities our visitors' desire. Duty Free shopping is the absolute must here...

Blue Lagoon Island
A relaxing 20-minute sail from Nassau, Blue Lagoon Island has several programs that allow visitors to interact with dolphins. Meet these loving mammals from the edge of the water or get up close and personal right next to them in the ocean.

Cable Beach
Looking for some sand? Look no further than a few miles west of Nassau. There sits a two-and-a-half mile stretch of beach and beach life. Cable Beach is also home to the Crystal Palace Casino, as well as several luxury resorts, nightclubs and the Cable Beach golf course.

Grand Bahama

Okay, let uassume you have skipped some of the Out Islands and Nassau, so you cannot experience the entire Top Ten must see and do list ... don't worry because here on Grand Bahama Island you can see, do, explore and have the time of your life.

Grand Bahama Island combines a cosmopolitan vacation at an upscale resort with the charm of a small town. Most of the British influence is now hard to find but one can find all they want of that in the other main town of Nassau, New Providence. Here in Grand Bahama Island you will find one of the world's largest underwater cave systems, three national parks, endless beaches and crisp blue water with enchanting marine life. And, on Grand Bahama Island there is a plethora of both land-based and water-based treasures to explore.

Land Based Activities

Birding
For birdwatchers, the island is an absolute Mecca. It's a place where nature lovers can see 18 of the 28 species of Bahamian birds that are not seen in the U.S., Canada or Europe.

Rand Nature Center
Most people come to the Rand Nature Center, only minutes from downtown Freeport, to see the variety of birds found there, including Antillean peewee birds, red-legged thrushes, stripe-headed tanagers, the endangered Bahama parrot and, occasionally, a Kirtland's warbler.

Along the nature trail that winds through the park, at least 130 Bahamian plants have been identified, which are just as fascinating as the birds. The whiskbroom fern, for instance, is believed to have been the first plant in the world to stand upright. Many other species became very useful in the daily lives of early Grand Bahamians. Uniola, a springy grass, was used to stuff mattresses, the sharp-pointed agave leaves served as needles and threads and love vine is believed to be a powerful aphrodisiac.

Great Golfing ...

Water Based Activities

Whether it is exploring the beaches, diving, or fishing -- you will find some amazing water based activities to enjoy in Grand Bahama Island. And as beaches go, Grand Bahama Island features two types -- the "activity beach" and the "secluded beach." Depending on what you are looking for you will never find a more captivating group of beaches anywhere on earth.

Beaches

Fortune Beach
Fortune Beach, named for a shipwreck discovered there with goods worth over $2 million, is a quiet stretch of beach, five miles from the Port Lucaya Marketplace.

Gold Rock Beach
Part of the Lucayan National Park, this secluded beach is a must-see during low tide. Across the road are the Lucayan Caverns, the world's longest underground surveyed cave system.

Lucayan Beach
Across from the Port Lucaya Hotel, this popular tourist beach has just about every water-sport activity, from snorkeling to parasailing, but is also great just for a stroll.

Mather Town Beach
Mather Town Beach is about three miles from Port Lucaya. With limited water activities, it is a great beach for swimming, eating, drinking and hanging out with the locals.

Paradise Cove Beach
Fifteen miles from the International Bazaar in Freeport, Paradise Cove is tucked away on the southwestern shore of the island. This quiet, secluded beach offers great places for snorkeling as well as beach volleyball. There's also direct access to Deadman's Reef, which has myriad of marine life.

Smith’s Point Beach
Famous for its Wednesday night fish fry, Smith's Point Beach is found, adjacent to Taino Beach in Lucaya.

Taino Beach
With limited water activity and a small playground, Taino Beach is ideal for families with children. During holidays the beach is the site of many local cook-outs. The annual Junkanoo Summer Festival is also held there.

William’s Town Beach
In the center of the William's Town settlement lies William's Town Beach. Water activities, such as banana boats, jet skis and snorkeling, can be found on the eastern side of the beach at Island Seas Resort.

Xanadu Beach
Xanadu Beach is a popular tourist beach, three miles from the International Bazaar, offering water sports, straw goods, and a variety of food and beverages.

Diving

Cave
Advanced divers will want to explore Ben's Cavern, a spectacular underwater sinkhole located in the Lucayan Caves National Park. Another amazing dive is The Cave, which is closed during the summer months. Other caverns include Devil's Face in Hawksbill Creek and Mermaid's Lair.

Dolphin
Grand Bahama Island is the only place where you can dive with dolphins in the wild. Through the Underwater Explorers' Society's (UNEXSO) "Dolphin Dive" program you will get to hand-feed and interact with these amazing animals in their natural habitat.

Reef
Shallow, medium and deep are the three types of reef diving you will find off Grand Bahama Island. Depending on how far you want to go and what you want to see, you'll find a large variety of sea creatures.

Shark
Shark Junction is home to one of the world's first and best shark encounters. This dive gives you a close encounter with the most beautiful large Caribbean reef sharks. If you are interested in diving with sharks, there are also two highly rated feeding programs on the island.

Wreck
Explore Bahamian history by diving through the numerous shipwrecks in and around Grand Bahama Island, including "Theo's Wreck," a former 230-foot bulk cement carrier that was the first artificial reef created in the islands of the Bahamas.

Fishing
One of the world's best game fish -- the bonefish -- not only likes the waters of Grand Bahama Island, but is more at home here than anywhere else in the world. The flats off Deep Water Cay, in the east, are praised year after year by fishing writers from around the globe. Fly-fishing is quickly gaining popularity on Grand Bahama Island and throughout the Bahamas. The best time to go fishing is between April and September, though winter is good too. In addition to independent fishing guides, there are several water-sports companies, marinas and hotels that cater to fishing exclusively.

Whether you want high octane adventure or just to lounge on the beach there are plenty of choices. You are sure to find exactly what you are looking for in a Bahamas vacation -- it is the ultimate escape.

The Out Islands Are the Real Bahamas

A Bahamas vacation has always sounded like paradise on earth, but did you know that when you travel to the Bahamas you are not just going to one island, but many.

Traveling from one end of the Bahamas to the other, not only are there the well known islands like Grand Bahama, The Abacos, Eleuthera, and Exuma, but the Bahamas is in fact a country of 700 islands, of which 23 are inhabited but there are many, many unpopulated islets and cays -- in fact, there are about 2000 secluded, small cays. Some of the islands are so small they disappear when the tide comes in. But others are not only habitable; they have been developed in recent years to attract tourists.

Development of the Out Islands is slowly but surely changing this picture. For growing numbers of tourists who wish to savor the Bahamian island experience with a minimum of glitz and a maximum of comfort, adventure and history, the Bahamas Out Islands, also known as the Family Islands, have become the destinations of choice.

An Out Islands vacation is the real Bahamas experience, full of natural wonders, wildlife, seemingly endless beaches, and a variety of uniquely Bahamian resorts and boutique hotels. The Bahamas Out Islands are not a vacation destination for everyone. The Out Islands are in the Bahamas, but there are no cruise ships here, no high-rise hotels, and no crowds. That is right: It is different out here. The Out Islands appeal to travelers who are true connoisseurs of Caribbean island life, to those who want their tropical vacations to be unique and at their own pace. One visits the Out Islands of the Bahamas to experience authentic off-the-beaten-path destinations and activities. Out Island hoteliers understand this, and specialize in putting together packages that ensure you will see and experience the best of these Bahamian secluded islands.

On all counts, each one of the Bahamas Out Islands ranks among the best of all the Caribbean destinations. In fact, the Bahamas was named the top honeymoon spot in the world by internationally-renowned travel site Expedia.com. Add to that the uniqueness of Bahamian culture, history and the welcoming laid-back friendliness of the people, and you have found the tropical island vacation you have been dreaming about.

More so than any other Caribbean islands, the Bahamas Out Islands are absolute beach-lovers and water-lovers paradises, offering an unparalleled collection of the region's best beaches, best snorkeling and diving, and best fishing, kayaking, boating and sailing, bird-watching and eco-travel. They also offer a unique culture born of seafaring European adventurers and African heritage and traditions that combine to create the distinctly colorful and decidedly welcoming Bahamian way of life.

The Bahamians also call the Out Islands the "Family Islands." Though many Bahamians may move to the bustling "big city" islands of New Providence (Nassau) and Grand Bahama (Freeport) to work at the glitzy casinos and high-rise hotels, they maintain family connections in the Out Islands and travel back as often as possible. It says a lot that these locals transplants head to the laid-back and friendly Out Islands to get away from the crowded high traffic cruise ship islands from where they live and work.

Here is some information on some of the main Out Islands.

The Exumas

The Exumas are a 120-mile-long island chain-within-the-chain of the Out Islands, with the Exuma Cays scattered in a long line extending north toward New Providence from Great Exuma. The Cays are the most exotic of the Out Islands, a collection of tiny jewels set in the aquamarine and sapphire of the most beautiful water you have ever imagined.

Flying down the Exuma Cays, looking down on the tiny jewel-like islands and every shade of blue on blue on blue possible where the crystal-clear tropical Atlantic pours over the deep cuts between the cays and the constantly shifting sandbars that look like meditative sand paintings has been named one of the top ten things you absolutely must do in the Caribbean. The area is so precious -- its reefs and island environments so pristine -- that the Bahamian government set aside a 176-square-mile section as the Exuma Cays Land and Sea Park, one of the world's most successful marine parks.

Many of the Exuma Cays are private, some operated as luxuriously exclusive private-island resorts and others the ultra-exclusive homes of such stars as Johnny Depp and country singers Tim McGraw and Faith Hill. The hub of the Exuma Cays is Staniel Cay, where boaters gather at the Staniel Cay Yacht Club's bar and restaurant, and where a landing strip serves as the gateway to the northern stretch of Cays. Within sight of the Club is the famous Thunderball Cave – seen in the James Bond film of the same name as well as the movie Splash -- where you can put on a mask and snorkel and duck inside a small hollow cay that is filled with friendly fish accustomed to being hand fed.

The anchor of the Exumas archipelago is Great Exuma, Bahamas. Here, you will find the laid back capital Georgetown and a great selection of casual Bahamian restaurants like Iva Bowes', Big D's Conch Shack, Eddie's Edgewater and Peace & Plenty. Hotels here range from the only 5-star resort in the Bahamas (the Four Seasons Emerald Bay complete with a Greg Norman-designed golf course) to condo-resorts to locally-owned fishing lodges.

A short boat ride from Great Exuma is a barrier cay that protects the main island from the Atlantic. Stocking Island features spectacular views from atop its high bluff and a series of idyllic beaches separated by limestone promontories. On the lee side, the Chat & Chill is a classic beach bar with great food that seems to attract every boater in the area.

With beautiful blue water, water everywhere, the Exumas are a dream destination for boaters, fishermen (flats, reef and offshore), divers, snorkelers and kayakers. The private islands are custom-designed for those seeking the ultimate escape, and the new levels of luxury available in both the Cays and Great Exuma are a definite draw for lucky couples looking for the perfect spot for an island wedding or honeymoon.

The Abacos

The Abacos Islands of the Bahamas are one of the worlds top boating and sailing destinations. With its own calm sea surrounded by charming islands, each worth a visit, the Abaco Islands are known as one of the worlds top boating and sailing destinations. Not that those who prefer to sleep in a bed that does not rock should look elsewhere: With quaint colonial towns, two golf courses, miles and miles of Stellar Beach, great fishing and diving, and a wonderful selection of hotels and resorts and restaurants and bars, the Abacos are the most complete vacation destination in the Bahamas Out Islands.

This island features lot of wildlife sanctuaries and parks and diving spots with an abundance of colorful corals and fishes. Green turtles, porpoises, seahorses and moray eels can also be found in the Abacos islands. Because this area has a lot of shallow reefs, divers can go snorkeling while they are decompressing.

The Abacos consists of its own 120-mile-long island chain, basically a mini-Bahamas complete with its own Out Islands. Great Abaco Island and Little Abaco serve as the "mainland," with a string of barrier islands separating them from the Atlantic. The body of water between -- a turquoise Nirvana for those boaters and sailors -- is the calm, shallow Sea of Abaco.

Marsh Harbour
Great Abaco Island is home to Marsh Harbour, the "bright lights and big city" of the Out Islands. And to put that into perspective, Marsh Harbour has exactly one traffic light (the only operative one in all the Bahamas Out Islands!). Along with having a great selection of hotels, restaurants and bars, Marsh Harbour is charter boat central, with several full-service marinas where you can dock your own boat or find a rental – both live aboard sailboats and powerboats are available.

Treasure Cay
North of Marsh Harbour is Treasure Cay, a hotel, golf, marina and real estate development wrapped around a beach with the whitest, softest sand you have ever seen. To the south lies Little Harbour, a picturesque protected bay where you will find a small artist colony based around the Johnston family and Pete Johnston's Pete's Pub. Setting out across the Sea of Abaco from Great Abaco Island, and you can steer toward any one of a number of islands -- each a vacation destination in its own right. This is an island hopper's paradise.

The Cays of Abaco
The Abacos Bahamas were settled by English colonists who remained loyal to the crown after the American Revolutionary War, which is why the settlements like Hope Town on Elbow Cay and New Plymouth on Green Turtle Cay have the look of New England fishing towns complete with picket fences and gingerbread trim -- of course with the distinctive Bahamian touch of pastel colors.

Hope Town
Hope Town is home to the famous candy striped lighthouse, a favorite photo subject now, but quite controversial when it was under construction back in 1863 because up until then, the islands residents had been making a comfortable living by salvaging ships that wrecked on the offshore reefs.

The diving and snorkeling is excellent all through Abaco Bahamas, with several protected underwater areas such as Fowl Cay National Reserve and Pelican Cays National Park, massive reefs with swim-through caves that are seasonally filled wall to wall with silver baitfish, and even dive spots at the edge of the reef where you're almost guaranteed to see Caribbean reef sharks.

Fishing is huge in the Abaco Islands, from the excellent bone fishing in Cherokee Sound and out in the "marls," to the blue water big game species like marlin and tuna that prowl the Atlantic side within easy sight of the outer islands.

Bimini

On Bimini Island, you will find more fishing, diving, sailing and more to do per square mile than anywhere in the Bahamas Out Islands. Bimini Island is the true Island in the Stream, perched at the edge of a sheer underwater cliff that falls thousands of feet into the blue abyss. The Gulf Stream rushes north, washing past Bimini Island, feeding and warming its coral reefs and serving as a watery highway for everything from marlin to mantas, dolphin to sea turtles. Its unique location coupled with a roguish history makes Bimini the Out Islands' favorite diving and fishing frontier outpost.

Laid-back Bimini's way of life is swimming off the beach, snorkeling, trolling for monster game fish and yes, tossing back more than a few rums with the locals. There is also the extraordinary chance to interact with wild Atlantic spotted dolphins that gather north of the island, casting flies for bonefish on the flats of the Bahamas Bank, kayaking to the legendary "Fountain of Youth" (a natural spring amid the mangrove mud that pumps lithium and sulfur) and scuba diving on wrecks, reefs, "off the wall" or atop the mysterious Bimini Road that some believe is remnants of a man-made causeway perhaps built by Atlantis's own civil engineers.

Bimini Island -- which is actually two small islands, North Bimini Island and South Bimini Island, connected by a shallow flat -- has a fascinating history. As the closest Bahamian island to the U.S., Bimini served as a convenient offshore speakeasy and liquor store during prohibition. Rum runners stored their hooch both ashore and on a concrete Liberty ship called the Sapona that still rests where it grounded during a hurricane -- it is one of the Caribbean's very best shallow-water wreck sites for snorkelers and divers.

Beyond the fishing, diving and kayaking, Bimini Island offers both the quiet escape of empty beaches along and the boisterous camaraderie of sportsmen gathering at the marinas after a successful day on the water in the hot sun. Menus at the local restaurants like the Red Lion Pub and The Anchorage are, naturally, heavy on fresh seafood and Bahamian favorites like cracked conch to keep you fueled up for further Bimini adventures.

Eleuthera Island

Natural, untamed and still undeveloped. Eleuthera Island is a Caribbean vacation playground. From the pink sand beaches of North Eleuthera to the renaissance of the Cape in South Eleuthera, and points between, you could spend weeks on this slinky island and still not see all of the natural beauty there is to explore.

This pencil-thin island -- it is only two miles wide -- has miles of pink and white sand beaches and turquoise crystal-clear water. To be clear, this is not all sand and water. Eleuthera Island is known for the high cliffs that fringe the eastern side of this Bahamas island, where the Atlantic Ocean crashes onto the rock. Of course, this is as much noise as you will hear on this quiet, friendly island of Eleuthera, where fishing, diving, snorkeling and taking it easy are the favorite pastimes of locals and visitors.

Eleuthera is Greek for "freedom," a fitting name for a Caribbean island that is free from crowds or cruise ships or casinos. Eleuthera moves at a slower pace than most people are accustomed to. Leave your watch at home and stow your cell phone and blackberry away. Fortunately for you most will not work here, anyway. The island is divided between North Eleuthera and South Eleuthera. One of the most popular spots is Harbour Island, famous for its pink and white sand beaches. Harbour Island often is called the Nantucket of the Caribbean. In addition to the beach, there are historical landmarks and a history lesson at every turn -- all within a tropical paradise, of course.

Eleuthera Island is 110 miles long and is dotted with quaint, friendly fishing and colonial villages, such as Tarpum Bay, Bannerman Town, and Hatchet Bay. This Caribbean island also is home of the first republic in the "New World." There are more natural wrecks here than any other island in the Bahamas, especially along The Devil's Backbone, a shallow and jagged reef extending across the northern edge of Eleuthera. It has torn the bottom out of more vessels than any other reef in the nation.

This Bahamas island also is known for pineapple plantations. Locals serve up plenty of pineapple tarts, and the annual pineapple festival celebrates the pineapple heritage of the Bahamas.

It is the resorts, though that give Eleuthera Island its reputation for being among the friendliest places in the world. The secluded villas, upscale resorts, and quaint inns keep visitors coming back year after year, including members of the British royal family.

Harbour Island

World famous Harbour Island is the ideal vacation destination for pink sand beaches, diving and unique, luxurious resorts.Known simply as Briland to its residents, Harbour Island, Bahamas, is often is called the Nantucket of the Caribbean. The colorfully painted New England-style architecture on the island beautifully compliments the lush palms trees, flower-lined streets and pink sand beaches. This tiny world famous (and world class) island is a vacation magnet for the rich and famous, savvy travelers and beach vacation seekers alike.

Approximately 3.5 miles long and only 1.5 miles wide, Harbour Island is located just off the tip of Eleuthera, separated by a narrow channel. Regular ferry service shuttles resort and hotels guests as well as daily visitors from North Eleuthera for a day of exploring and shopping the picturesque village of Dunmore Town. One of the oldest settlements in the Bahamas, Dunmore Town dates back to the 18th century. It was formerly the capital of the Bahamas and second only to Nassau in importance. Dunmore Town was once the summer home of the Royal Governor, Earl of Dunmore -- hence the name.

Harbor Island, Bahamas, is famous for its 3-mile-long pink beach that runs the entire length of the island on its eastern side. The beach is protected by an outlying coral reef that makes the turquoise clear water one of the safest and most alluring swimming and snorkeling spots in the Bahamas. Adventure vacationers can also seek out these waters for great diving opportunities. Current Cut, for example, offers one of the most thrilling high-current dives in the Caribbean.

Harbour Island, Bahamas, was ranked "The Best Island in the Caribbean" by Travel Leisure magazine and readers of the elite travel magazine rated this tiny gem of the Bahamas Out Islands number one among the islands of the Caribbean, Bahamas and Bermuda.

Cat Island

Untainted by tourism, there is much to be discovered on Cat Island in the Bahamas Out Islands. About 130 miles southeast of Nassau and Paradise Island near the Tropic of Cancer lies Cat Island. Explore uninhabited cays and hidden coves, attend a regatta, go on a shark dive, or hike a nature trail. Cat Island provides a year-round tropical beach vacation adventure.

Divers like the coral reefs and blue holes, walls, caves and shipwrecks. Shark dives, dolphins, and stingrays are all part of the experience. While veteran divers know their way around the ocean floor, guides always are around to help beginners experience life under the sea.

Cat Island, Bahamas, is a fishhook-shaped island only 48 miles long and four miles across at the widest part. Yet, it offers plenty to do and see. Cotton plantation ruins are scattered around the island. The remains of slave huts dating back to the 1700s and Arawak Indian caves can be explored. Cat Island also prides itself on producing the Bahamas' finest rake 'n scrape music and holds an annual festival dedicated to it.

Mount Alvernia is the highest elevation in the country at 206 feet above sea level. The hill served as the hermitage of Father Jerome Hawes, who settled on the Bahamas island in 1939, where he built a miniature monastery and hand-carved steps out of solid rock. Named after the pirate Arthur Catt, much of the island has not been developed, which provides a unique vacation for those who want to get away in a private, relaxing, laid-back environment. Of course, the pink beaches are popular, but so are the world-class diving adventures, snorkeling, and fishing. With 50 miles of rolling hills and miles of nature trails, you truly can experience a Bahamas island in its native setting.

This is not fabricated. This is the Bahamas. And at Cat Island, even the winters are a blazing 60 degrees, while in the summertime temperatures linger around the mid-80s with a gentle breeze from the ocean. Stay in a remote and rustic village setting and relax under thatched-roof tiki bars, make your vacation home a cottage right on the pink sand beach or select a fishing marina that caters to anglers on a quest for a big-game catch. Whatever you choose, there is something to do and see on Cat Island, Bahamas. Of course, you may choose to do absolutely nothing at all.

Andros Island – the king when it comes to superlative natural experiences.

All of the Bahamas Out Islands boast abundant natural attractions, but Andros Island -- the largest yet most sparsely developed of all the Bahamas -- is the king when it comes to superlative natural experiences. It is a great place for a laid-back beach getaway, wedding or honeymoon, but for eco travelers, kayakers, bird watchers, hikers, snorkelers, divers and fishermen the big island of the Bahamas is the ideal vacation destination.

Andros Island is the Bahamas' natural wonder. The earth's 3rd-largest barrier reef (after Australia's Great Barrier and Central America's Belize Barrier Reef) lies adjacent to its shores. A mile-deep abyss -- walled with coral and filled with whales, dolphin, marlin and all the wondrous reef animals – that is called the Tongue of the Ocean, licks along Andros's east coast. Underwater caves riddle the island, surfacing as mesmerizing blue holes that local legends say serve as lairs for the Lucsa, a sea monster that sucks the unwary down into the bottomless blue. Mangrove-lined wetlands cover huge swaths of Andros Bahamas, intercut with endless mazes of channels that open onto bonefish flats and hidden beaches.

Divers and snorkelers find endless fascination along the reef -- going deep into the Tongue or exploring among the coral heads along the inside of the barrier reef – and at the openings to the blue holes that are found all over the island, in the middle of forests, out on flats, inside deep channels, near the reefs and amid the stony ancient reef that makes up much of the landscape (the entire 2,300-square-mile island is made of porous limestone laid down by the sea and reef creatures).

Birds find Andros Island an ideal stopover on their yearly migrations, when they join such local exotics as ibis, spoonbills, flamingos, hummingbirds, woodstars and the rare Bahama parrot. Bird watchers who flock to the island find their quarry wading along the shore, roosting in the mangroves (where a silent, peaceful approach by kayak ensures close sightings) and hiding amid the coppice.

Fly fishermen set off in small boats with experienced local guides who somehow know their way through the criss-crossed confusion of cuts and channels that split Andros Island into three sections, and find the flats filled with silvery bonefish. For ocean big game fishermen, the Tongue beckons, with big snapper along the deep reef and pelagics like mahi-mahi, tuna, wahoo and marlin out in the blue just a bit further out. Hikers can get a combination natural history tour and cultural lesson by participating in a walk "backabush," where inland blue holes appear amid the ancient forest and where a local guide will explain all the medicinal uses of the plants – knowledge that's been handed down for generations.

When Andros Island Bahamas visitors take a break from adventuring, there is plenty of other things to do on the island, whether it is picnicking at Morgan's Bluff, Love Hill beach or Somerset beach, doing a rum shop crawl, or shopping for locally produced Androsian fabrics in Fresh Creek or baskets and wood carvings in Red Bay.

Long Island

Discover history, walk pink and white sand beaches and dive the blue holes of Long Island, in the Bahamas Out Islands. Home to one of the oldest dive operations in the Bahamas, Long island has numerous shallow and deep dive sites, but is best known for Dean's Blue Hole, the deepest recorded blue hole in the Bahamas (more than 600 feet). The western shoreline of the 80-mile long island has soft sandy beaches capped with rich green mangroves. With the Atlantic Ocean on the east, Long Island is a haven for fishing, sailing, and yachting in the Bahamas Out Islands.

A towering spine of ancient reef gives 80-mile Long Island, Bahamas, two faces: the dramatic cliffs and caves of the east coast that front the crashing Atlantic waves, and the soft, sandy edged lee side which slides calmly into the Bahamas Bank. Shark diving, vast schools of fish around towering coral bommies, and the spectacular wall of nearby Conception Island (a national park) are serious draws for scuba diving enthusiasts, while the angling for both bonefish and big pelagics is enough to keep any fisherman thrilled.

Cape Santa Maria Beach has been recognized by beach lovers and travel writers alike as one of the most beautiful beaches in the world. Long Island, Bahamas, is also home to Columbus Point. This towering memorial to Christopher Columbus is perched high on a hill at the island's northern most tip where visitors can experience outstanding oceanic views. You will find sloping hills in the northeast, while low hillsides make up the southern portion of the island. It is the drastically contrasting landscape that makes so many people say that Long Island is one of the most picturesque islands in the Bahamas.

The island beckons visitors for world-class bone fishing and thrilling encounters with sea life, where divers and snorkelers explore gardens, caves, and old plantation ruins. But Long Island, Bahamas, also is a quiet island dotted with quaint, friendly villages and miles of uninterrupted beaches that offer soft pink sand changing to yellow-white. And along the way, sea shells and plenty of them The great thing about the Out Islands is the ability to hop from one to the other by sea or air to get the most out of your vacation.

In the Out Islands you will find the amazing sight of the white sand, green islands, coral keys, turquoise sea, and lovely little villages -- all totally unforgettable for their sheer spellbinding beauty ... a paradise on earth.

ALARM BELLS SOUNDED OVER ALLEN STANFORD IN 1995, BUT NO ONE LISTENED

Accusations of “massive fraud” at his Antigua-registered banking group date back to the mid-1990s.

The still evolving scandal involving the incipient collapse of nominal billionaire (liabilities offsetting his assets yet unclear) Allen Stanford financial empire threatens to make the U.S. regulatory authorities look bad -- again. The red flags started waving over a decade ago, but no action until now.

The last stanza of T.S. Eliot's classic children's poem, "Macavity: The Mystery Cat" begins:

Macavity, Macavity, there’s no one like Macacity,
There never was a Cat of such deceitfulness and suavity.
He always has an alibit, or one or two to spare:
And whatever time the deed took place – MACAVITY WASN’T THERE!

It is dawning on us that T.S. Eliot must have been channeling the spirit of government when he wrote this. They commit voluminous crimes, but it is never their doing. And when a real crime, which government is allegedly supposed to offer protection from, occurs: IT’S NOT THERE!

The U.S. authorities are facing tough questions over why they took so long to act against Allen Stanford's business empire amid accusations that a "massive fraud" at his Antigua-registered banking group dates back to the mid-1990s.

As the billionaire financier and cricket entrepreneur was tracked down by the FBI in Virginia yesterday, an investigation broadened around the world into his allegedly corrupt Stanford International group.

The Venezuelan government seized a Stanford-linked bank after a run on deposits and in Britain the Serious Fraud Office said it was monitoring a link to an auditing firm with offices in London. Customers lined up outside branches of Stanford-controlled banks on the Caribbean island of Antigua to withdraw their savings.

Lawyers representing investors who put money into Stanford International accused the U.S. securities and exchange commission of failing to act on a succession of "red flags" arousing anxiety as far back as 1995.

In London, international fraud expert Jeffrey Robinson said suspicions over Stanford dated back 15 years and were on "everybody's radar" for the last decade.

"I know, personally, because I have discussed it with them, a number of law enforcement agencies in the United States, plus a number of prosecutors who have been looking at Mr Stanford for the past 15 years," Robinson, a journalist and author, told the BBC's Today programme.

Law enforcement authorities have accused Stanford of selling $8 billion of purportedly ultra-safe certificates of deposit to U.S. investors by advertising bogus returns as high as 10% annually and making false promises about the way the money was invested.

America's ABC News network, citing U.S. federal authorities, said the FBI was investigating whether Stanford was involved in laundering money for a Mexican drugs cartel. Quoting unnamed officials, it said Mexican authorities had found cheques from a drugs gang in a detained private jet owned by Stanford.

"It is very frustrating for investors who got in late that the SEC and other regulators have been investigating for years and have not done anything," said Ross Intelisano, a New York securities lawyer. "It is frustrating that they took so long to shut him down."

An SEC complaint against Stanford mentions that as long ago as 1995 and 1996, Stanford International reported identical annual returns of 15.71% -- a statistical phenomenon so unlikely that the agency views it as "impossible."

In 2006, a former Stanford employee, Laurence De Maria, filed a lawsuit in Florida claiming that the bank was operating a "Ponzi scheme" by taking investors' money under false pretences to finance an unprofitable offshore brokerage.

Stanford paid a $20,000 fine in 2007 for having insufficient capital to act as a broker dealer, followed by $10,000 the same year for misleading investors about its certificates of deposit. Last year, it was fined $30,000 by the U.S. financial industry regulatory authority for failing to disclose how it was valuing securities.

Regulators complain that Stanford consistently refused to cooperate with questions over the whereabouts of clients' money. Thomas Ajamie, a Texas lawyer representing Stanford clients, said: "If the regulators are not being let in, that is not a red flag -- it is a bright red explosion in front of you."

He said there was weariness in Houston at the specter of another major financial scandal: "This is the same state where the Enron scandal occurred over many years." ...

Since federal marshals entered Stanford International's Houston head office on Tuesday (February 17), repercussions spread around the world. The Serious Fraud Office said it was "monitoring" reports that Stanford's Antiguan auditor, CAS Hewlett, recently moved its operations to London.

Panamanian regulators occupied branches of a Stanford bank hit by a run on deposits, while Colombia and Ecuador halted the operations of local brokerages.

In Caracas, President Hugo Chávez's regime seized control of Stanford Bank Venezuela after customers withdrew $26.5 million, amounting to 12% of deposits. The Venezuelan finance minister, Alí Rodríguez, said: "We have taken the decision to take over."

A former president of Switzerland, Adolf Ogi, has stepped down from Stanford Financial Group's advisory board. Sportsmen including the golfer Vijay Singh faced dilemmas over whether to continue wearing Stanford-sponsored clothing. A Dallas judge has frozen Stanford's assets and business activities.

SHORT TAKES

Leonardo DiCaprio Invests in Eco-Friendly Resort in Belize

Some stars have good intentions -- but it is all talk. Leonardo DiCaprio, a mega-star long known as a staunch green movement advocate, has put his good intentions in to action. DiCaprio has made a deal with Four Seasons Resorts, and will open an eco-friendly hotel in land he owns in the country of Belize in Central America. Ground breaking for the hotel was schedule to begin in very late 2008 or early 2009.

His 104 acres are in Blackadore Caye in the Caribbean Sea. Only a 25 minute ride away from the country's top-class diving site off the Belize Barrier Reef. The resort will feature an airstrip, infrastructure and top quality accommodations. The energy will be renewable and the island will be as self-sustaining as possible. DiCaprio is heavily interested in ecological concerns and has produced an environmental film on the human impact on the environment.

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