Islam

  • 19 Jul 2007 at 9:37 AM
  • Islam

A Mighty Lawsuit

Tomb_Raider_AJolie.jpg Mariane Pearl (pictured), famous for reenacting events in Angelina Jolie’s films, is suing Pakistan’s largest bank for funding an “Islamic charity” allegedly connected to her husband’s death.
Habib Bank maintained accounts for Al Rashid Trust, which is considered the United Way for terrorists, ensuring every cave (“command center”) has a set of unoxidized monkey bars and improving bomb manual literacy one terror cell at a time. The Trust is accused of serving as a front for funneling money to terrorists and Daniel Pearl’s body was found on a member of the “charity’s” property (maybe it was an after-school honor killing program?). The bank allegedly knew about all this, hence the lawsuit (it’s the “knowing” part that nabs you in U.S. law, presumably).
Pakistani officials are still giggling that the West doesn’t realize that “Islamic charity” means a tax free haven for funding terrorist groups. Some details about the case, from the Wall Street Journal:

The Pearl case was filed by the plaintiffs firm Motley Rice of Mount Pleasant, S.C., which is also pursuing a host of Middle Eastern banks and companies on behalf of the victims of the Sept. 11 attacks. In that case, which is moving slowly through the same judicial district, several prominent defendants including some major banks have been dismissed from the litigation. U.S. law bans knowingly providing “material support” to terrorist groups and also permits terrorism victims to bring civil suits on similar grounds.

As we learned with the Swiss, it is tough to prove (and by prove we mean do anything about) that a bank is complicit in “knowingly supporting” its client’s actions, especially with the flimsy long arm of prosecuting international corporate entities.
Daniel Pearl’s Widow Sues Pakistan’s Largest Bank [Wall Street Journal]

  • 13 Jul 2007 at 12:02 PM
  • Islam

Mo’ Fundamentalism Mo’ Problems

The silly Great Satan West is at it again, naming institutions after words that sound a little bit like Arabic words. Really holy Arabic words, like the ones used to refer to the traditional biographies of Muhammed. No, the combination of NASD and NYSE regulation was not going to be called, “Spend a Little Time in a Cave and People will Believe Anything” but rather, “SIRA,” or the Securities Industry Regulatory Authority. Sensitivity trainers also advise against using the term IRA after words that end in “s.”
How the great wrath of men with really strong convictions and really pointy things was averted, from the Washington Post:

When NASD chairman Mary Schapiro announced the name SIRA at a luncheon in June, she was not aware that it “could create confusion or be considered offensive because of its similarity to an Arabic term used to refer to the traditional biographies of Muhammad.”
“Because of this feedback, we determined that it was appropriate to select the alternative name of Financial Industry Regulatory Authority, or FINRA, for our new organization,” she wrote in a note to NASD employees.

Muhammed has a series of less traditional biographical works including the very popular culinary guide, “The Meccan Caravan Raiding Diet” along with the self-help book “Deities are from Mars, Their Six Year Old Wives are from Venus.” Fortunately the West has not named any institutions after the Arabic words for these titles, meaning we’re that much closer (a few hundred years and an enlightenment) to Arab countries liking us.
In the same semi-retarded spirit, I propose the Germans eliminate the word for “six” from their vernacular, because it sounds slightly like the English word used to refer to the traditional biographies of Hugh Hefner and Jenna Jameson.
Broker watchdog to change its name [Washington Post]

  • 01 May 2007 at 9:31 AM
  • Islam

God will not underwrite this deal

Interest may be banned in Muslim countries, but self-interest is still very much alive, in a thriving consulting industry to ensure that financial transactions are structured in an Allah-friendly way. Sheikh Nizam Yaquby is one of the world’s most prominent “scholars” of Islamic bonds, deciding, with a bit of semantic and theological wrangling, if deals are kosher can happen. Sukuk, or Islamic bonds, must be fully collateralized with income generating assets that provide an equivalent to interest on conventional debt. Sanctioned Islamic assets are expected to triple by 2015 to $2.8 trillion worldwide, far outpacing the international bond market and US junk debt market.
Yaquby sits on advisory committees of 40 financial institutions, and with annual retainer fees averaging up to $100k a year (and considering Yaquby probably makes well above the market rate), the guy is raking it in. May his no interest savings account be praised.
Trying to adhere to Shariah creates a rather tenuous market dynamic (aside from the fact that “Shariah compliance” takes about 2-3 weeks), where different “interpretations” of Shariah can void deals. Many disagreements over the validity of Islamic deals occur every year. Here’s one example, from Bloomberg:

Some Shariah rulings don’t work around the world. Suria Capital Holdings Bhd., a Malaysian state-run property developer, last month sold 80 million ringgit ($23 million) of sukuk that wouldn’t be accepted in the Persian Gulf. Suria sold port concession rights to two Malaysian banks arranging the bond sale. The banks sold the concessions back to Suria at a higher price and the money will be passed on to bondholders over 10 years. The sukuk, approved by advisers including Mohammed Bakar, uses a contract called Bai Bithaman Ajil which scholars in the Gulf say doesn’t comply with Shariah because the sale includes a profit margin that is akin to an interest payment.

Imagine if Steve Schwarzman could just point to deals (TXU) and void them, just through metaphysical obfuscation. Then imagine, like most Blackstone underlings (and several members of the press) that what Steve Schwarzman said was the word of GOD. Despite Bonderman’s reaction (it would set him off more than a question about global warming), creating superfluous arbitration mechanisms and more ways for financial transactions to become intertwined with religion and politics doesn’t exactly seem like a positive trend in the market.
Islamic Bond Fatwas Surge on Million-Dollar Scholars – [Bloomberg]