Out of the sub-prime frying pan and into the Sharia fire...

I'm telling you, possums. You think derivatives are bad? At least they don't call for the stoning of women. Sharia finance is the biggest scam to come down the pike since Odysseus saddled up the Trojan Horse and rode into Troy. And most of our government officials and Wall Street firms are just going right along with it...

Get along little doggies.

From Ed Gaffney's article in today's Washington Times.

Tragically, in the process of leaping out of the scalding subprime frying pan, Wall Street is heading directly into a fire that promises, if anything, to be more devastating than the present disaster. Incredibly, it bears all the hallmarks of subprime with respect to a lack of transparency, a systematic failure to disclose and an utter absence of due diligence, good governance and accountability. The next "what" is called Shariah-Compliant Finance (SCF).

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Earlier this year, David Yerushalmi, a litigator specializing in securities law and an expert on Shariah, produced a riveting legal memorandum (soon to appear in the University of Utah Law Review) examining the civil and criminal exposure inherent in Shariah-Compliant Finance. His conclusion: banks and investment houses offering SCF products may be enabling or engaging in the following: racketeering, antitrust activity, securities fraud, consumer fraud and/or material support for terror.

What makes Shariah-Compliant Finance even more dangerous than subprime is that, in its effort to legitimize and institutionalize Shariah in America, it is advancing a criminal conspiracy whose purpose is the violent overthrow of the United States Constitution and government in favor of Islamic rule. That would make it sedition.

-snip-

A forthcoming book about SCF by Center for Security Policy Vice President Alex Alexiev offers a further, sobering thought about the fire next time: It is becoming ever-harder to differentiate between the Gulf states' so-called Sovereign Wealth Funds (actually they are the slush funds of the sovereigns) and Shariah-Compliant Finance. The former is increasingly being invested in ways that promote the latter, adding unfathomably large pools of funds to what is estimated already to be an $800 billion global industry.

The Center for Security Policy has sent copies of David Yerushalmi's legal memorandum to the heads of scores of Wall Street firms and the nation's leading commercial banks, warning them of the ominous similarities between subprime and SCF. Interestingly, only the late Merrill Lynch bothered to respond, albeit with a vacuous note blithely affirming its concern about terrorism.

Fortunately, Congress is beginning to recognize the possible peril in what may happen next to Wall Street. Notably, last month, a senior and highly respected member of the Senate Finance Committee, Arizona Republican Jon Kyl, wrote Securities and Exchange Commission Chairman Chris Cox, Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Attorney General Michael Mukasey, asking them to respond to Mr. Yerushalmi's analysis of Shariah-Compliant Finance.

Hope somebody addresses this! AND soon...