A Site New To Me

Stumbled across Money Jihad today. Check it out.

At the site, among other information, I found this Islamic tax chart, something I've never seen comprehensively laid out before.

We here at IBA might want to use Money Jihad for reference.

Dubai Defaulting on Islamic Bonds? GE Goes Where Fools Dare to Tread

From Atlas Shrugs:

They have been saying how wonderful this Islamic finance has been doing. More taqiya. I am glad. Anything to discourage financing the spread of Islam. Bloomberg markets are down big -- but if that's what it takes ............... (hat tip Anthony)

Dubai shook investor confidence across the Persian Gulf after its proposal to delay debt payments risked triggering the biggest sovereign default since Argentina in 2001. (more here)

Meanwhile, Obama's pushing this garbage:Obama's Jiyza: GE Capital Plans 1 Billion Dollar ISLAMIC (sukuk) BOND -- Citigroup, Goldman Sachs lead arrangers.

Who in their right mind would invest in such a death cult?

Western investors watch nervously as worth of Islamic bonds is tested to limit Wall Street Hournal Australia

A DEFAULT by Dubai will put the world of Islamic finance to the test at a time when hard questions are being asked by bankers and lawyers about the protection afforded by financial instruments that are Shariah compliant.

The bond that lies at the heart of the threat of default and financial ignominy for Dubai is a sukuk, an instrument invented by bankers and Islamic scholars to comply with a Shariah (Islamic law) prohibition against the payment of interest on money.

Islamic finance has five pillars: a ban on interest, a ban on speculation, a ban on haram (forbidden) investments, such as pork or gambling, the requirement of partnership or sharing of profit and loss and the requirement of asset backing. Getting round the ban on interest is the problem and opportunity of Islamic finance.

A bond that doesn't (in theory) pay interest sounds unattractive but in the Gulf and Malaysia, Islamic finance has flourished over the past decade.

Typically, interest is expressed as a share in a profit, such as the rent paid for use of a property or asset. According to estimates by HSBC Amanah, the Islamic arm of the British bank, outstanding Islamic finance debt is worth $US822 billion ($902 billion).

Even Western investors have been persuaded to dip their toes in the exotic financial tool, tempted by the deep pool of petrodollars available in the Gulf. Only days before Dubai revealed its bombshell - a threat of possible default on Nakheel's $US4 billion sukuk - GE Capital, the American financial services group, issued the first sukuk by a Western company, raising $US500 million. The underpinning of a sukuk with assets makes it attractive for use in property lending or asset leasing. The sukuk issued by GE this week was a loan for aircraft leasing.

GE's decision to use the Islamic finance market for funds reflected renewed confidence in a market that had almost collapsed after expansion in 2007 when the Gulf was awash with money fuelled by high oil prices.

Demand shrivelled after the collapse of Lehman Brothers with only $US16 billion issued last year. More importantly, fears surfaced that sukuk failed to provide the same legal protection as conventional bonds. To date, the legal structure of sukuk has never been tested in a court.

Gordon Brown wants UK to be the international financial center for Sharia products

After Dutch MP, Geert Wilders was declared "persona non grata" and deported from UK because his presence was threatening community harmony, I found  that Times On Line published an article (which herroyalwhyness pointed out to me was written in March 2006) in which it was reported that British PM, Gordon Brown had:

given Muslim leaders private assurances that he wants to create a "level playing field" in the economy, so that more and more "sharia compliant" financial products can be offered to British Muslims.

so as to:

 help make London the natural home for Islamic funds from around the world, and increase the inflow of investment from oil-rich Middle Eastern countries.

Why this is important now? Because in the present economic crisis, this phenomenon can spread to other countries, such as US:

American financial institutions report the losses that forced them to deplete their cash reserves, CEOs are begging for loans from oil-rich Middle East nations that have benefited from the rise in oil prices in recent years from $30 to nearly $100 per barrel. As one former Wall Street executive lamented, U.S. business leaders are “lining up to kiss the ring.”.

But of course, this would threaten free business in cases when they are in conflict with the Sharia. As Melanie Phillips puts it:

Acceptance of Sharia finance furthers the Islamist objective of gradually legitimising Islamic Sharia Law more generally in the west (...). The most important point to grasp is that Islam recognises no authority superior to sharia.

To know more about Sharia finance, check out the Shariah Finance Blog.

"Halal" products arrive in Spain "before this summer"

The arrival at Spanish market of the Islamic banking way has already been given an arrival day. Before this summer, all the people who would like to hire Halal-guaranteed financial products, that is, those who respect the Sharia law's legal obligations in these matters, would be able to. The main characteristic of the Islamic banking rules is that it does not produce interests or ribaa, because this is forbidden in the Coran, as a form of usury.

It has been already confirmed to El Confidencial Digital by the director of the Halal Institute of the Islamic Council, Isabel Arroyo. It is a business which is already moving between €300,000 and 500,000 millions around the world.

The responsible of the Halal Institute remembers that they have been working in this business with BanCaja -the entity born after an agreement between Spanish Post Service and German Deutsche Bank in Spain- during more than "a year and a half" and that, nowadays, they are continuing with the negotiations, just confronting the last obstacles they are finding to inagurate this kind of banking services. Anyway, arroyo is optimistic and assures, in statements to ECD that "before this summer" this new type of products will be available in Spain.