Western Companies Seen Eyeing Islamic Bonds

REUTERS: LONDON/MANAMA - Cash-strapped Western companies are considering issuing Islamic bonds to tap Middle Eastern investors but face a challenge in choosing the right instrument, bankers and asset managers said.

Companies, especially in the UK and France, are looking to Islamic compliant investors as alternative sources of finance as the global crisis restricts their usual funding routes.

"There is a lot of interest from corporates to issue sukuk. My feeling is that as liquidity in the West gets scarce, they will look into the Middle East," said London-based Adnan Aziz, head of sharia advisory and structuring at asset manager BMB Group.

British retailer Tesco (TSCO.L) issued its first sukuk -- or Islamic-compliant debt --in 2007 for its Malaysian unit as well as raising conventional debt.

Islamic bonds do not pay interest, which is banned under Islamic law or Sharia, and are structured as profit-sharing or rental agreements, underpinned by physical assets such as real estate or commodities.

"We have discussions with clients, conventional issuers in Europe and we pitch both solutions, (bonds and sukuk) that is going to be a trend going forward," said Vikrant Bhansalim, who works for French bank Societe Generale (SOGN.PA) in London.

"In today's world the corporate sector is interested in the right price, the format is not as important," he said. >>> Reuters | Tuesday, February 10, 2009

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>

REUTERS:
Indonesia Reports Strong Demand for First Retail Sukuk >>> Reuters | Tuesday, February 10, 2009

SMART BRIEF: Report Details Growth of U.K.'s Islamic Finance Sector

A report by International Financial Services London found that the Islamic finance sector in Britain, with $18 billion in assets, is much larger than that of Pakistan, Turkey, Egypt and Bangladesh, countries where Islam is the primary religion. The report also states that the U.K. leads Western countries in the number of financial institutions focused on Muslims and sharia-compliant products. >>> The Telegraph | Tuesday, February 10, 2009

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>

Shari’ah-compliant Finance
I should like to remind my visitors that anything of interest concerning Shari’ah-compliant finance generally appears on my other blog, The Shrewd Economist rather than on this blog, since that blog is for economics, banking, and finance. So please be sure to check out the blog frequently.

Putting Profit above Principle
It has been announced that Tony Blair wants to ’devote his life to faith’. By ‘faith’ I suppose we are to understand ‘interfaith dialogue’, so as to try and ensure that we all live together in harmony.

This is a noble ambition indeed; unfortunately, however, there is one stumbling block: The nature of Islam!

For ‘interfaith dialogue’ to be meaningful, there has to be a readiness by all parties, in this case especially Jews, Christians, and Muslims, to compromise, for without compromise, interfaith dialogue becomes a meaningless exercise.

In Islam we find an implacable faith, an unyielding belief system founded on totally different principles than both Judaism and Christianity.

Christianity is based on love: The love of God, the love for God, the love of humanity. Islam, by contrast, is not a religion based on love; rather, it is based on total submission to Allah, and where there is no total submission to Him, we find the sword used to rein in the people. Indeed, Muhammad himself announced the sword to be an instrument of faith. Who, then, are we to argue with Muhammad’s declaration? How can we put a positive spin on that?

It is interesting to note that there is a maxim used by Muslims which states the following: ‘To convince stubborn unbelievers, there is no argument like the sword.’ [Source: Washington Irving: Mohammed]

For this reason, if for no other, it is difficult to see what Tony Blair hopes to achieve with his devotion to interfaith dialogue. How does he hope to change the nature of the faith of Islam? It is impossible to change nature. Indeed, can we change the nature of anything? And if this is so, then what hope have we of changing the nature of Islam, especially after more than fourteen hundred years?

The only man who could have changed its nature was the Prophet Muhammad himself. But as he is no longer around to make any changes, it is not going to be possible for mere mortals to change anything in that religion. You see, Islam is not a religion like Christianity anyway. Christianity has evolved, and has undergone a reformation. This reformation was made possible partly because Christianity, being based on the Bible, especially the New Testament, is to all but fundamentalist Christians, considered to be a book that is inspired by God. The words contained therein are not generally considered to be God’s actual words.

In this respect, Islam is very different. Islam, as we all know, is based on the Qur’an, and that book is not considered be inspired by Allah; rather, Muslims consider the book to comprise the actual words of Allah as dictated to Muhammad by the Angel Gabriel in the form of a recitation. In fact, the very meaning of ‘Al Qur’an’ is ‘The Recitation’.

The result of this difference between the holy books has led to two quite different civilizations and cultures. Muslims are very defensive of Islamic culture and civilization in a way that Westerners are not defensive of theirs.

Take our leaders. They are reluctant to face up to the fact that we have a huge problem on our hands with Islam in general, and with the rapid growth of Islam in the West in particular. In this reluctance, they are doing us no favours. On the contrary, they are remiss in their duties as guardians of our way of life, as guardians of our Judeo-Christian civilization.

What, for example, are our leaders doing to protect our values and our way of life? Interfaithing will offer no protection; actually, on the contrary, it will probably lead to compromise – the compromise of Westerners. To me it seems like a cop out. It is a smokescreen to enable the top echelons to put profit above principle.

The jihad which is being waged against the West threatens us all. It is not something we can afford to ignore; yet people are ignoring it, largely in the hope that it will go away. It won’t. If anything, it will get worse.

The jihad has many guises. One of the latest is the economic jihad being waged against capitalism. Only this morning, it was reported that there have been calls for >Ireland to introduce Shari’ah-compliant finance as a matter of urgency. As a matter of urgency, no less! Why? So that Muslims living and working in Ireland can live their lives according to their faith, without feeling conflicted by the terms and conditions of living in the ‘evil’ capitalist system.

One can but ask oneself one question here: If living under capitalism is so onerous for these Muslims, then why did they come here to live in the first place?

The leaders of finance houses who are working so hard to introduce Shari’ah-compliant financial services and products seem to be oblivious to the fact that Islamic economics is competing in every respect with capitalism. Isn’t it true to say that the interest rate is the keystone of a capitalist economy? Take that keystone away and the whole system will start to fall apart.

In Islam, riba is frowned upon. But let’s get one thing straight: Riba is generally translated as usury, not as the interest rate per se. There is a world of difference between usury, which is the charging of extortionate rates of interest for loans, and the general interest rate which is not to be equated with such extortion. Yet nobody seems to be making any difference between them. The financiers appear to have been hoodwinked into believing that the interest rate is itself frowned upon in Islamic economics. It must be said that one’s definitions in this matter depend on the Islamic scholars one reads: Some scholars frown upon the interest rate altogether, calling it all usury, whilst others take a more liberal approach and make a distinction between a reasonable rate of interest and an extortionate rate.

Whichever is the case, the fact remains that Islamic economics is not compatible with the long-term interests of a capitalist economy. One can but worry about the tentacles of Islam tightening their grip on Western economies. Lest we forget, the old adage, He who pays the piper calls the tune comes to mind. We need not wait to learn that this is indeed true. We can discern the verity of the adage already when we look around us. Take the power of the petrodollar as a case in point. Its power is profound, and it can be felt around the globe.

It is one reason why our leaders and business people are reluctant to speak out. They are overcome by greed and fear: They are greedy to earn back the petrodollars, and they are fearful that if they speak out they will incur the wrath of the Muslims living in the West, and cut off our oil supplies into the bargain.

You see, they do not have the stomach for any form of confrontation. The sad reality is, however, that the West will not survive this onslaught without a confrontation of some kind or other. It’s just not possible. Muslims are to determined too replace our Judeo-Christian civilization with an Islamic one, too determined to replace capitalism with an Islamic economic system.

But by confrontation, I do not necessarily think that we need to go to war (though that cannot, of course, be ruled out in the long-run). But we do need to protect our own values and our own way of life. Alas, this is not happening. Our leaders are giving in at every turn. Appeasement of Muslims both at home and abroad is the norm of the day. It will do nothing for the West except accelarate the demise of our civilization, and accelerate the demise of capitalism, too.

Can’t the people in power see what they are doing? Are bankers and financiers so greedy that they are willing to bring down the West for their own short-term gain? Do they not realize that they are playing with fire? Do they really believe that capitalism and Islamic economics can co-exist? Can they really be that ignorant?

Personally, I think they are not; rather, I think these people are out to get all they can before the house of cards is brought down. Remember the fall of communism? Capitalism will fall equally easily if we do not pay more attention. It’s hard to believe, I know. But the introduction of Shari’ah-compliant finance and other Shari’ah-compliant products is just the start. It is the introduction of Shari’ah law by the back the door. Today it’s banking; tomorrow it will be Shari’ah enshrined in the laws of the land, enshrined in the constitutions of Western countries. How foolish our leaders, bankers and financiers are!

Before 9/11, it would have been hard to imagine that the West could have been so weak and unwilling to fight for a way of life we have come to expect and love. But it all started going wrong after those attacks, because we were too reluctant to state the case against Islam, clearly and unequivocally. The politicians have busied themselves making excuses for Islam and have deceived the public in so doing; the business people and bankers have busied themselves making money from the countries awash with petrodollars. And in so doing they have chosen to turn a blind eye to the financing, by Saudi Arabia, of the propagation of Wahhabi Islam in the West.

So what exactly is Tony Blair going to achieve with his lifetime spent interfaithing? Is he merely going to sell the West farther down the river? And in any case, what are his qualifications for doing this job? What does he know about Islam? And where has he learnt that which he does know?

One thing is for certain: People like Tony Blair are not going to learn the true nature of Islam by sitting in five star hotels in Bethlehem, talking to fabulously rich Muslims from oil-rich countries. To learn about the true nature of Islam, one has to mix and talk with people at the grassroots level. The rich are generally Western-educated, indulge in alcohol, spend enormous amounts of money in casinos, live in the lap of luxury, and generally do not adhere strictly to their faith. They are also generally well-travelled; so they are not representative of the ordinary man in the Arab street. Ergo, little can be learnt from them when it comes to the faith of Islam.

Isn’t it high time that we all started taking stock? Isn’t it high time that we woke up to the reality which confronts us? Isn’t it high time that we started to put principle before profit?

©Mark Alexander

All Rights Reserved

Putting Profit above Principle
It has been announced that Tony Blair wants to ’devote his life to faith’. By ‘faith’ I suppose we are to understand ‘interfaith dialogue’, so as to try and ensure that we all live together in harmony.

This is a noble ambition indeed; unfortunately, however, there is one stumbling block: The nature of Islam!

For ‘interfaith dialogue’ to be meaningful, there has to be a readiness by all parties, in this case especially Jews, Christians, and Muslims, to compromise, for without compromise, interfaith dialogue becomes a meaningless exercise.

In Islam we find an implacable faith, an unyielding belief system founded on totally different principles than both Judaism and Christianity.

Christianity is based on love: The love of God, the love for God, the love of humanity. Islam, by contrast, is not a religion based on love; rather, it is based on total submission to Allah, and where there is no total submission to Him, we find the sword used to rein in the people. Indeed, Muhammad himself announced the sword to be an instrument of faith. Who, then, are we to argue with Muhammad’s declaration? How can we put a positive spin on that?

It is interesting to note that there is a maxim used by Muslims which states the following: ‘To convince stubborn unbelievers, there is no argument like the sword.’ [Source: Washington Irving: Mohammed]

For this reason, if for no other, it is difficult to see what Tony Blair hopes to achieve with his devotion to interfaith dialogue. How does he hope to change the nature of the faith of Islam? It is impossible to change nature. Indeed, can we change the nature of anything? And if this is so, then what hope have we of changing the nature of Islam, especially after more than fourteen hundred years?

The only man who could have changed its nature was the Prophet Muhammad himself. But as he is no longer around to make any changes, it is not going to be possible for mere mortals to change anything in that religion. You see, Islam is not a religion like Christianity anyway. Christianity has evolved, and has undergone a reformation. This reformation was made possible partly because Christianity, being based on the Bible, especially the New Testament, is to all but fundamentalist Christians considered to be a book that is inspired by God. The words contained therein are not generally considered to be God’s actual words.

In this respect, Islam is very different. Islam, as we all know, is based on the Qur’an, and that book is not considered be inspired by Allah; rather, Muslims consider the book to comprise the actual words of Allah as dictated to Muhammad by the Angel Gabriel in the form of a recitation. In fact, the very meaning of ‘Al Qur’an’ is ‘The Recitation’.

The result of this difference between the holy books has led to two quite different civilizations and cultures. Muslims are very defensive of Islamic culture and civilization in a way that Westerners are not defensive of theirs.

Take our leaders. They are reluctant to face up to the fact that we have a huge problem on our hands with Islam in general, and with the rapid growth of Islam in the West in particular. In this reluctance, they are doing us no favours. On the contrary, they are remiss in their duties as guardians of our way of life, as guardians of our Judeo-Christian civilization.

What, for example, are our leaders doing to protect our values and our way of life? Interfaithing will offer no protection; actually, on the contrary, it will probably lead to compromise – the compromise of Westerners. To me it seems like a cop out. It is a smokescreen to enable the top echelons to put profit above principle.

The jihad which is being waged against the West threatens us all. It is not something we can afford to ignore; yet people are ignoring it, largely in the hope that it will go away. It won’t. If anything, it will get worse.

The jihad has many guises. One of the latest is the economic jihad being waged against capitalism. Only this morning, it was reported that there have been calls for Ireland to introduce Shari’ah-compliant finance as a matter of urgency. As a matter of urgency, no less! Why? So that Muslims living and working in Ireland can live their lives according to their faith, without feeling conflicted by the terms and conditions of living in the ‘evil’ capitalist system.

One can but ask oneself one question here: If living under capitalism is so onerous for these Muslims, then why did they come here to live in the first place?

The leaders of finance houses who are working so hard to introduce Shari’ah-compliant financial services and products seem to be oblivious to the fact that Islamic economics is competing in every respect with capitalism. Isn’t it true to say that the interest rate is the keystone of a capitalist economy? Take that keystone away and the whole system will start to fall apart.

In Islam, riba is frowned upon. But let’s get one thing straight: Riba is generally translated as usury, not as the interest rate per se. There is a world of difference between usury, which is the charging of extortionate rates of interest for loans, and the general interest rate which is not to be equated with such extortion. Yet nobody seems to be making any difference between them. The financiers appear to have been hoodwinked into believing that the interest rate is itself frowned upon in Islamic economics. It must be said that one’s definitions in this matter depend on the Islamic scholars one reads: Some scholars frown upon the interest rate altogether, calling it all usury, whilst others take a more liberal approach and make a distinction between a reasonable rate of interest and an extortionate rate.

Whichever is the case, the fact remains that Islamic economics is not compatible with the long-term interests of a capitalist economy. One can but worry about the tentacles of Islam tightening their grip on Western economies. Lest we forget, the old adage, He who pays the piper calls the tune comes to mind. We need not wait to learn that this is indeed true. We can discern the verity of the adage already when we look around us. Take the power of the petrodollar as a case in point. Its power is profound, and it can be felt around the globe.

It is one reason why our leaders and business people are reluctant to speak out. They are overcome by greed and fear: They are greedy to earn back the petrodollars, and they are fearful that if they speak out they will incur the wrath of the Muslims living in the West, and cut off our oil supplies into the bargain.

You see, they do not have the stomach for any form of confrontation. The sad reality is, however, that the West will not survive this onslaught without a confrontation of some kind or other. It’s just not possible. Muslims are too determined to replace our Judeo-Christian civilization with an Islamic one, too determined to replace capitalism with an Islamic economic system.

But by confrontation, I do not necessarily think that we need to go to war (though that cannot, of course, be ruled out in the long-run). But we do need to protect our own values and our own way of life. Alas, this is not happening. Our leaders are giving in at every turn. Appeasement of Muslims both at home and abroad is the norm of the day. It will do nothing for the West except accelarate the demise of our civilization, and accelerate the demise of capitalism, too.

Can’t the people in power see what they are doing? Are bankers and financiers so greedy that they are willing to bring down the West for their own short-term gain? Do they not realize that they are playing with fire? Do they really believe that capitalism and Islamic economics can co-exist? Can they really be that ignorant?

Personally, I think they are not; rather, I think these people are out to get all they can before the house of cards is brought down. Remember the fall of communism? Capitalism will fall equally easily if we do not pay more attention. It’s hard to believe, I know. But the introduction of Shari’ah-compliant finance and other Shari’ah-compliant products is just the start. It is the introduction of Shari’ah law by the back the door. Today it’s banking; tomorrow it will be Shari’ah enshrined in the laws of the land, enshrined in the constitutions of Western countries. How foolish our leaders, bankers and financiers are!

Before 9/11, it would have been hard to imagine that the West could have been so weak and unwilling to fight for a way of life we have come to expect and love. But it all started going wrong after those attacks, because we were too reluctant to state the case against Islam, clearly and unequivocally. The politicians have busied themselves making excuses for Islam and have deceived the public in so doing; the business people and bankers have busied themselves making money from the countries awash with petrodollars. And in so doing they have chosen to turn a blind eye to the financing, by Saudi Arabia, of the propagation of Wahhabi Islam in the West.

So what exactly is Tony Blair going to achieve with his lifetime spent interfaithing? Is he merely going to sell the West farther down the river? And in any case, what are his qualifications for doing this job? What does he know about Islam? And where has he learnt that which he does know?

One thing is for certain: People like Tony Blair are not going to learn the true nature of Islam by sitting in five star hotels in Bethlehem, talking to fabulously rich Muslims from oil-rich countries. To learn about the true nature of Islam one has to mix and talk with people at the grassroots level. The rich are generally Western-educated, indulge in alcohol, spend enormous amounts of money in casinos, live in the lap of luxury, and generally do not adhere strictly to their faith. They are also generally well-travelled; so they are not representative of the ordinary man in the Arab street. Ergo, little can be learnt from them when it comes to the faith of Islam.

Isn’t it high time that we all started taking stock? Isn’t it high time that we woke up to the reality which confronts us? Isn’t it high time that we started to put principle before profit?

©Mark Alexander

All Rights Reserved

Economic Jihad Spreads to Ireland; Shari’ah-Compliant Financial Services ‘Should’ Be Made Available to Muslims There as a Matter of Urgency
At this rate, capitalism will be dead in a short time. It took the West years to defeat communism. Western capitalism eventually won the day as it was seen to be superior. Indeed it was and still is superior. Islamic economics is now winning the day, though. And there has been no need of a Cold War, and no need for guns (or swords). All it has taken is intimidation of Westerners by an assertive Muslim population, a sense of subservience to the Gulf Arabs, especially the Saudis, ignorance of the true nature of Islam and its goals, a refusal to admit to the dangers of that faith, appeasement, meekness, and timidity on the part of Westerners who are afraid of confronting the ideology, a loss of belief in our own destiny, and a dogged determination on the part of our leaders and captains of industry NOT to call Islam what it actually is: A political system wrapped up in a deity.

The end of capitalism and liberty, dear readers, is nigh! - ©Mark

THE IRISH TIMES: THERE IS an “urgent need” for sharia-compliant financial services to be made available in Ireland so that Muslims living here do not contravene religious teachings, representatives from Irish financial institutions were told at a seminar on Islamic banking yesterday.

The seminar was held at the Islamic Cultural Centre of Ireland (ICCI), which is based at Ireland’s largest Sunni mosque in Clonskeagh, Dublin.

“We organised this conference because there is an urgent need for the Muslim community here to have mortgages and other financial services that do not drive them to break their Islamic teachings,” said Ali Selim, a theologian and secretary to Imam Hussein Halawa of the ICCI.

During yesterday’s seminar Imam Halawa outlined the religious tenets of Islam that forbid the payment or receipt of interest, known as riba.

Representatives from the Arab Banking Corporation’s London subsidiary and the Islamic Bank of Britain gave presentations on how the market for Islamic finance has developed in the UK in recent years.

Several high street banks in Britain now offer a variety of sharia-compliant services, including mortgages.

One of the most common types is based on the Islamic principles of “diminishing musharaka” or diminishing ownership. Under this scheme, the customer and bank jointly acquire a property, with the customer’s share usually similar to the normal deposit, but the property is bought in the bank’s name only.

The customer makes monthly payments made up of rent and contributions towards the purchase price over an agreed period of time.

The amount of rent decreases as the customer’s share in the property increases. Ownership is transferred when the customer eventually buys out the bank.

Similar partnerships are available so Muslim business people in the UK can avoid interest repayments.

Mr Selim told the seminar that as Ireland’s Muslim population increased there would be more demand for such services here. Call for Sharia-Compliant Finance Services to Be Available in Ireland >>> By Mary Fitzgerald | May 30, 2008

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

Jihad with Money
THE SPECTATOR – Melanie Phillips: Alex Alexiev on National Review Online sets out the reasons why sharia finance — described by Sheikh Yusuf al Qaradawi as ‘jihad with money’ — is a serious threat to the west:

The legitimization of sharia in the West and its gradual imposition in Muslim communities and beyond is a key objective of sharia finance, and there is no doubt it has already made huge strides. …

Notably, for those Muslims who cannot engage in physical jihad using force of arms, sharia requires that they support jihad financially. This is what sharia finance is all about.

Far from being a legitimate investment vehicle, sharia finance facilitates religiously sanctioned support for terrorist organizations — as well as providing radical Islamists with highly paid sinecures as sharia-finance board advisors in the sanctum sanctorum of capitalism, all the while that they are pursuing a subversive campaign to destroy it.

Predictably, none of this is even remotely disclosed by any of the dozens of Western banks promoting sharia finance today, which obviously exposes them to huge non-disclosure risks ranging from fraudulent misrepresentation, to material support for terrorism.

And not disclosed either by Gordon Brown, whose stated ambition is to make London the global centre of Islamic banking (reported to be yet another brilliant wheeze from Ed Balls). Of all the manifestations of the Islamisation of the west (see this piece by Dan Rabkin on the acceleration of Londonistan) sharia finance is perhaps the most deadly, because it effectively sells the west to Islam, and the most difficult to stop — because for the financiers and politicians in the west who are thus selling it, all they can see are the trillions of dollar and pound signs being dangled enticingly before their eyes. [Source: Jihad with Money By Melanie Phillips]

Cross-posted at The Shrewd Economist

The Dawning of a New Dark Age (Paperback)
The Dawning of a New Dark Age (Hardback)

Jihad Comes to Wall Street
"Sharia finance" does exactly what it promises, financing the spread of sharia — and terror. - Alex Alexiev
NATIONALREVIEW ONLINE: If you’ve seen Geert Wilders’s film Fitna, you may not have noticed a single headline amongst all the bombings, beheadings, and earnest expressions of Islam’s eventual world domination: Halal-fund: investments for Muslims. But the investment vehicles referenced are an essential part of radical Islam’s efforts to insinuate itself into Western societies in order to destroy them from within. And Wall Street, barely out of the woods from its disastrous run-in with sub-prime mortgages — and having lost one of its historic investment houses, Bear Stearns, in the process — is now chasing the very kind of "sharia finance" against which Wilders's movie warns, a business line that may eventually wind up being even more calamitous than the subprime-mortgage fiasco.

For the growing army of its acolytes, who salivate at the prospect of tens of billions of dollars in transaction fees from the burgeoning industry, sharia-compliant finance is seen as little more than a cuddly Islamic version of socially conscious investment — with ethical strictures forbidding usury and sin industries, and emphasizing charity. Indeed, a conference on the subject last Fall co-sponsored by the Wall Street Journal was titled just that: "Islamic Ethical Investment." According to this rosy interpretation, sharia finance is a windfall for capital markets — allowing Wall Street to skim some foam off the ocean of petrodollar liquidity in the Middle East, and put it to good use.

Other interpretations are possible, of course. Critics see sharia finance as a massive subversion campaign by radical Islam designed to legitimize sharia in the West, to undermine our markets, and ultimately to imperil our free-enterprise system and national security — all the while exposing banks to financial risks that make the sub-prime fiasco look like a walk in the park. For its proponents and ideological enablers — such as the well known suicide-bombing advocate, Sheikh Yusuf al-Qaradawi — sharia finance is nothing less than "Jihad with money." As al-Qaradawi explains, "God has ordered us to fight enemies with our lives and with our money." Unfortunately for Wall Street, it’s hard to argue with the good sheikh on that score. Far from being a guide to ethical investment, sharia finance is indistinguishable from sharia itself.

Sharia is a reactionary-to-the-core medieval Islamic doctrine that claims control over every aspect of every Muslim’s life. It imposes such "ethical" mandates on Muslims as the obligation to discriminate against women and non-Muslims; to kill homosexuals, adulterers, and apostates; to establish and maintain Muslim rule around the world; and to carry out violent offensive jihad against infidels. Notably, for those Muslims who cannot engage in physical jihad using force of arms, sharia requires that they support jihad financially. This is what sharia finance is all about. Jihad Comes to Wall Street >>> By Alex Alexiev

Hat tip: Revereridesagain

Cross-posted at The Shrewd Economist

Mark Alexander

Shari’ah Finance Takes Off
Plenty of Interest in No Interest >>>
Mark Alexander (Paperback)
Mark Alexander (Hardback)

Frank Gaffney Jr: Shariah’s Trojan Horse
TOWNHALL.COM: Suddenly, a new national debate is beginning about the national security, economic and other implications of Persian Gulf potentates using their petrodollars to buy up strategic American assets. Most recently, the Emir of Dubai’s purchase at fire-sale prices of 4.9 percent of the largest U.S. bank, Citigroup, has caused a level of unease not seen since he tried to buy his way into a large number of this country’s port facilities.

Almost completely unremarked thus far has been a parallel – and in many ways far more insidious – effort to penetrate, influence and dominate America’s capital markets: so-called “Shariah finance.” Some estimates suggest that there are approaching $1 trillion now being invested around the world under this rubric. If present trends continue, all other things being equal, such funds may grow to many times that amount within a few years.

Shariah is, of course, the term used by adherents to the totalitarian ideology practiced by the Saudi Wahhabis, the Iranian mullahs and the Taliban to describe the all-encompassing theocratic code they use to justify repressive rule at home and to extend their dominance elsewhere. While it is often depicted by its promoters as Koranic in character, in fact, it is largely man-made, the product of dictates and rulings by caliphs and scholars over many centuries.

For non-Muslims, Shariah is best known for its sanction for the brutalization of women, homosexuals and Jews. Beheadings, amputations, flagellation and stoning are among the prescribed punishments for those who transgress this barbaric code, punishments plucked from primitive tribal practices in the Arabian deserts dating back to medieval times. Shariah’s Trojan Horse >>> By Frank J. Gaffney Jr.

Frank Gaffney Jr. is the founder and president of the Center for Security Policy and author of War Footing: 10 Steps America Must Take to Prevail in the War for the Free World (Hardcover)

Mark Alexander (Hardback)
Mark Alexander (Paperback)

Shari’ah-Compliant Finance
If Islam won’t get us one way, it will get us another! >>>
Mark Alexander

Shari’ah-Compliant Finance

Photo of HSBC (Dubai) courtesy of Council on Foreign Relations

COUNCIL ON FOREIGN RELATIONS: There are few principles more central to modern economics than interest, the fee charged for the opportunity of borrowing money. Interest spurs economic efficiency and creates wealth by helping borrowers and lenders make exchanges to their mutual advantage. Islamic law, or sharia, forbids either paying or charging interest. For decades this theological ban has had limited effect on international economics, given the feathery relative weight of Middle Eastern investors and businesses in global markets. But now, an influx of oil money is bulking up Middle Eastern financial influence and giving rise to a new boom industry: sharia-compliant financial services.

In order to win the “sharia compliant” seal of approval, businesses must adhere to all theological requirements of the Quran. Jawad Ali, a partner at King & Spalding, a law firm that assists businesses in structuring sharia-compliant deals, explains in an interview that this means not only shunning interest but also adhering to a host of other requirements. A real estate firm, for instance, cannot rent property to banks, casinos, businesses that deal in pork or pork products, or any other business that itself doesn’t follow sharia.

Still, Ali says, the most complicated compliance standard is commonly the interest ban. Businesses work around this restriction by developing creative ways to substitute fees for interest. Say, for instance, a business is interested in purchasing a property. Instead of borrowing money to make the purchase, the business can structure a transaction such that a bank acquires the property and leases it out for a set fee. This primer by the Institute of Islamic Banking and Insurance outlines other similar sharia-compliant financial arrangements. Yet there is no absolute standard for sharia compliance beyond meeting the subjective demands of would-be investors, and there is no governing body overseeing Islamic banking, so standards vary region-to-region and firm-to-firm. Banking on Islam (more) Prepared by Lee Hudson Teslik

Mark Alexander

The Sukuk Goes From Strength to Strength
MIDDLE EAST BANKER: Sukuk is the hot topic in Islamic finance, and we will soon see the industry reach a value of some tens of billions, as Michael Saleh Gassner from IslamicFinance.de writes.

Islamic finance has for some time missed investment opportunities for Muslims that offer a predictable return with low risk. The majority of investment opportunities are based either on stock markets with high volatility or on real estate transactions. The investment galaxy for the Islamic investor is lacking the variety of instruments to create an efficient portfolio in line with portfolio theory and financial planning. Sukuk certificates meet the pressing need for a medium term investment and reached, in 2004, a market volume of nearly US $7 billion. This volume will multiply in coming years to tens of billions of dollars annual volume. Already a number of world-class borrowers have used the new Islamic Sukuk market: Germany; the IMF Group; and Sovereign states like Qatar and Malaysia. Reasons to issue Sukuk and the structures behind them (more)

Mark Alexander

Are Premium Bonds About to Become Shari'ah-Compliant?
BNP: Another day and yet another concession to Islamic forces in Britain from the Labour regime.

In a desperate bid to woe Muslim voters the Treasury want all types of government-sponsored savings products to be accessible to those who adhere to Islamic Sharia law.

Sharia law forbids gambling and the paying and/or levying of interest and many High Street banks have established Muslim friendly bank accounts and mortgages.

Premium Bonds, a favourite among small savers for 50 years — with the numbers that decide the winning bonds generated by a machine called “Ernie” — will be among the National Savings products to be tested for suitability. All other National Savings accounts will also be examined. Ernie to become Muslim friendly (Read on)

Mark Alexander

The seeds of capitalism’s own destruction are being sown!
It was reported in the Financial Times on Saturday last week (March 17, 2007) that Aston Martin (James Bond’s favourite sports car) has been sold by Ford Motor to a consortium which is to finance the LBO (leveraged buy-out) according to strict Islamic principles. This deal appears to be the deal they don’t want you to know about, since it has hardly been reported in the mainstream media at all.

Ford Motor agreed to the sale for £479m to a consortium organised by Dave Richards, a motor racing entrepreneur.

The financing of this LBO “will be financed in an exclusively shariah-compliant way”, David Testa said, the executive director of West LB, the German bank appointed to arrange £225m of the quasi debt finance to back the LBO. It is believed that this is the first time that Islamic finance has been used in the West for an LBO. The Islamic financial focus has arisen because Investment Dar and Adeem Investment Co are two Kuwaiti groups that invest in accordance with Shari’ah principles of investment, which eschew, of course, conventional Western, capitalist-style financing arrangements.

It is said that there is a rapid growth in the Islamic finance sector, a sector which is said to have grown substantially and is said to have assets already in excess of $300bn, or approximately £155bn, worldwide. Further, it is worth noting that Western investment banks like West LB, Deutsche Bank, Citigroup, and Barclays are becoming more and more involved in Islamic finance, too.

The Financial Times went on to say that we shall have to wait and see to know whether these financiers will also ban “factors deemed to be non-Koranic” such as “martini-swilling spies to market the iconic brand”.

It should be noted that it would seem fair to say that the 'great and the good' in the world of Western finance have little realisation of the implications of their greed, or else, if they do, then they are insouciant about them. For capitalism, this really must be a step in the wrong direction. The élite in the business world seem not to realise, still less understand, that Islamic economics is not the same as Western capitalism. These two economic systems are diametrically opposed, just as Islam is diametrically opposed to Judeo-Christianity.

It is sad to say that we are sowing the seeds of our own destruction, and the people at the top are too dumb to see it!

CNBC World - Islamic Finance: Applying religion to economics


©Mark Alexander