economic downturn and instability of the financial markets in the West
has battered global economies. Despite the accompanying drop in oil
prices, the current financial crisis has actually presented
opportunities to expedite the influence and extend the global reach of
Islamism in ways Sunni imams and Shiite mullahs could have only
fantasized about before.
Kuwait’s Investment Dar, the Islamic finance holding company which owns a
majority stake in British luxury carmaker Aston Martin, has suspended
payments on its KD1bn ($3.5bn) debt. Its strategy of relying on short-term
financing was crippled by the credit crunch. Sharia law provides no
precedent for what happens next.
Islamic finance is a recent phenomenon. The aim was to create products that
work exactly like Western debt instruments, but without actually making
“interest payments”, which is prohibited under some interpretations of
sharia law. So, broadly speaking, the lender is called an investor and
interest payments are renamed profits. The new terminology hasn’t had any
practical effect up to now, as there haven’t been any major Islamic finance
Saudi Arabia's grand cleric on Sunday told
Muslims on the hajj pilgrimage that the global financial crisis stems
from ignoring God's rules and allowing "riba" or usury, prohibited in
"Today we watch as this financial crisis enfolds and some
companies and banks go bankrupt," grand mufti Abdul Aziz al-Sheikh said
at the Namera mosque, where prophet Mohammed prayed while making the
is the result of ignoring God's rules. Muslims must abide by God's
rules, and build their economies accordingly," Sheikh told the faithful
before midday prayers.
Islamic banking can no longer
claim immunity from the global financial crisis now that it is
hitting the industry's main source of funding and property
values in the Gulf Arab region. The industry escaped the immediate fallout from the crisis
as its ban on interest and its lack of structured products
prevented it from investing in the assets that turned toxic for
In a report issued last week debt rating agency Moody's said
Islamic financial institutions in the Gulf showed strong
resilience during the global financial turmoil, but that they
are not risk-immune due to a shortage of liquid instruments and
the lack of an Islamic interbank market.
The ratings agency expects growth in Islamic banking assets
to slow sharply in 2009, to around 10 to 15 percent from a range
of 20 to 30 percent this year.
Islamic banks now stand in the same firing line as their
non-Islamic counterparts, facing a slump in equities valuations
and a slump in Gulf real estate, to which they are heavily
Sukuk issuance is down 60% from 2007 and the balance sheets of these so-called Islamic Banks are real stanky. Last week, the UAE had to bailout mortgage lenders Amlak and Tamweel - what do you have to say about that, muf? With billions of dollars of sukuk obligations coming to maturity over the next 12-18 months and with the shaky legal underpinnings of Islamic mortgages, now the question is - will borrowers be able to repay them? I predict a sukuk clusterphuk on the horizon...
"Communism will be eradicated in fifty years. Capitalism, too. Only Islamic finance will continue," said Dr. Said Al-Awiss, Imam and preacher of the Iskan mosque, in Dammam (east) in the daily Al-Watan.
That Movie: How The Innocence of Muslims Was Made When struggling actor Tim Dax was hired to star in a swords-and-sandals movie titled Desert Warrior, he was just happy to have the job. One year later, Dax and the rest of the film’s cast and crew would look on in horror as The Innocence of Muslims—a crudely dubbed version of the movie they thought they were making—ignited protests across the Arab world and controversy at home. Speaking with many of the film’s principals, Michael Joseph Gross reports on a story as old as Hollywood itself: a pursuit of fame and fortune that ended in tears.
Pravda to Americans: Never Give Up Your Guns "These days, there are few few things to admire about the socialist, bankrupt and culturally degenerating USA, but at least so far, one thing remains: the right to bare arms and use deadly force to defend one's self and possessions."