Thursday, April 26, 2007

High finance, sharia and you...

From Investor's Business Daily:

Frank Gaffney Jr., president of the Center for Security Policy, which is leading the divestment in terror campaign ( reports that the Ohio legislature will soon hold its second hearing on legislation to prevent investment by Ohio's public pension funds in companies that do business with the terror-sponsoring and nuke-building mullahs in Iran. The legislation is sponsored by state Reps. Shannon Jones and Joshua Mandel. Mandel knows something about Iranian involvement in Iraq, having served a combat tour there as a Marine.

Similar initiatives are also under way in Missouri, Florida, Illinois, Georgia and Louisiana — and not a moment too soon. According to Gaffney's organization, as of August 2004 roughly 100 of the top U.S. public pension funds alone had some $188 billion invested in companies that partner with terrorist-sponsoring regimes like Iran.

In other financial news, Standard and Poors aids and abets Islamic financial markets with the formation of a series of Sharia index funds. The indices include only those stocks compliant with Sharia law and opens the door for the creation of mutual funds, exchange traded funds and other structured products to facilitate liquidity and improve risk management. Great, not only will the islamists be able to use hawala to launder their funds. They'll be able to use the S&P.

And last but not least, the UK Government is considering issuing sharia based bonds. Read it and weep.

Under sharia law, making money from money, such as charging interest, is not permitted, which restricts opportunities for investing to trade and assets. The Islamic financial model is based upon risk-sharing between financial institutions and customers. For instance, customers are able to get credit by asking a bank to buy an item, which it then sells on to them on a deferred basis. The market is expected to grow quickly as there are estimates suggesting that there are more than £125bn of Islamic finance assets worldwide....

"Domestically, we will do everything we can to promote new ways for British Muslims to bank, save and borrow using Islamic finance products," he will say. "I believe there are great potential advantages for the UK government issuing sharia-compliant government debt. The feasibility study will also be assessing the opportunity for issuing such instruments, taking into account the government's debt-management objectives..."

The government is changing the rules to allow Sukuk bonds to be issued, held and traded in the same way as corporate bonds to try to encourage more of them to be issued in London. The high-street banks are also devising products for Britain's two million Muslims. HSBC, for instance, offers an Islamic mortgage and current account.