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-	BARELY a week goes by without a report on the level of confidence among consumers, businesspeople and investors. Optimism is what�s wanted�Keynes talked of the �animal spirits� that influence economic activity. Pessimists are routinely denounced as Jeremiahs. Those who try to bet on falling prices find their activities are restricted.	+	EU foreign ministers have imposed a travel ban and asset freeze on the UK-born wife of Syrian leader Bashar al-Assad and other family members, diplomats say.
-	A cheery disposition may be necessary for societies to function. Daniel Kahneman, a psychologist and Nobel economics laureate, has a chapter in his book �Thinking Fast and Slow� which describes overconfidence as �the engine of capitalism�. No entrepreneur can be sure that his planned investment will succeed but if no one took a risk, new products and jobs would never be created. A certain blindness to the odds may be necessary. According to Mr Kahneman, the chances of an American small business surviving for five years are just 35%. But ask individual entrepreneurs about their prospects and 81% think they have a better than seven-in-ten chance of success.	+	Asma al-Assad is among 12 people added to the sanctions list, which already includes her husband.
		+	The ban cannot stop her from travelling to the UK, British officials say.
-	This self-confidence may be innate, just as most people think they are better-than-average drivers. And it would seem logical that the most optimistic people gravitate towards entrepreneurship. That is good for consumers, who can select from a wider variety of products. Even the failed businesses serve a purpose. Daniel Gross, a journalist, wrote a book claiming that bubbles were good for economies since they leave behind infrastructure (canals, railways, fibre-optic cable) that can last for generations.	+	Anti-government activists accuse the regime of killing thousands of protesters over the past year.
-	But it is hard to make such a case for all bubbles. Anyone who has driven past a row of empty houses in the Irish countryside will realise that optimism can lead to wasteful investment. And Mr Kahneman cites studies that show how overoptimistic chief executives (as measured by the amount of stock they own) were more likely to gear up their balance-sheets and pay too much for acquisitions.	+	In recent weeks, the Damascus government has stepped up its efforts to crush pockets of rebellion in cities including Homs and Hama.
-	The problem with overoptimism was illustrated by the investment-bank collapses of 2008. The men who reached the top of such risk-taking organisations had, by definition, been successful in their previous bets. They believed this was due to skill, not luck, making them too sanguine about their ability to ride out the crisis.	+	Russia and China have vetoed two UN Security Council resolutions on Syria for fear that intervention could lead to regime change, as happened in Libya last year.
-	A further problem with optimism is thus that it is pro-cyclical. The greatest moment of success for optimists will occur at the peak of a boom, when they will feel their instincts have been justified. Previous house-price rises will make buyers more optimistic about borrowing more money; and banks will be more optimistic about the prospect of being repaid.	+	Mr Assad has promised political reform, but observers and his opponents have dismissed his plans as window-dressing.
-	Financial assets are highly unusual in that rising prices tend to elicit higher demand. Analysts extrapolate recent rapid profits growth into the future, even though profits cannot rise faster than GDP indefinitely. If markets were truly efficient, price-earnings ratios should be lower than average at the top of the cycle, since investors should anticipate a reversion to the mean. Instead, high p/e ratios and rapid profits growth tend to go together.	+	The BBC's Chris Morris in Brussels says for years there was a perception that Mrs Assad's Western upbringing could encourage reform in Syria.
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		+	The 36-year-old, who is of Syrian descent, was born in the UK and spent much of her life in west London. The UK Border Agency has confirmed that Mrs Assad is British.
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		+	"British citizens subject to EU travel bans cannot be refused entry to the UK," a spokesman said.
		+
		+	Mrs Assad, who worked as an investment banker in the City of London before her marriage in 2000, has generally played a low-key role in the regime.
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		+	The BBC's Caroline Hawley looks at Asma Assad's UK roots
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		+	However, in February she wrote to Britain's Times newspaper to explain why she thought her husband was still the right man to lead Syria.
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		+	Other members of Mr Assad's family have also been added to the sanctions list. The AFP news agency says these include Mr Assad's mother, sister and sister-in-law.

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Revision as of 19:27, 12 October 2012

EU foreign ministers have imposed a travel ban and asset freeze on the UK-born wife of Syrian leader Bashar al-Assad and other family members, diplomats say.

Asma al-Assad is among 12 people added to the sanctions list, which already includes her husband.

The ban cannot stop her from travelling to the UK, British officials say.

Anti-government activists accuse the regime of killing thousands of protesters over the past year.

In recent weeks, the Damascus government has stepped up its efforts to crush pockets of rebellion in cities including Homs and Hama.

Russia and China have vetoed two UN Security Council resolutions on Syria for fear that intervention could lead to regime change, as happened in Libya last year.

Mr Assad has promised political reform, but observers and his opponents have dismissed his plans as window-dressing.

The BBC's Chris Morris in Brussels says for years there was a perception that Mrs Assad's Western upbringing could encourage reform in Syria.

The 36-year-old, who is of Syrian descent, was born in the UK and spent much of her life in west London. The UK Border Agency has confirmed that Mrs Assad is British.

"British citizens subject to EU travel bans cannot be refused entry to the UK," a spokesman said.

Mrs Assad, who worked as an investment banker in the City of London before her marriage in 2000, has generally played a low-key role in the regime.

The BBC's Caroline Hawley looks at Asma Assad's UK roots

However, in February she wrote to Britain's Times newspaper to explain why she thought her husband was still the right man to lead Syria.

Other members of Mr Assad's family have also been added to the sanctions list. The AFP news agency says these include Mr Assad's mother, sister and sister-in-law.