A Caliphate of Toxic Assets

Excerpt from article [with links] by Alyssa A. Lappen for FrontPage Magazine.

In July, Hizb Ut Tahrir [an international pan-Islamist, Sunni, political party whose goal is to combine all Muslim countries in a unitary Islamic state or caliphate, ruled by Islamic law] plans to launch its U.S. arm with a huge Chicago [Where else?] “Khalifah conference” heralding the coming Caliphate and global Islamic supremacism. After 9/11, Germany and Sweden outlawed Hizb Ut Tahrir. In July 2005, Pakistan's then-president Pervez Musharaf warned Britain not to tolerate its continued U.K. presence. But in the U.S., Hizb Ut Tahrir has proudly announced intentions to replace capitalism with Islam.

Founded five years into Jordan's illegal occupation of East Jerusalem in 1953, Hizb Ut Tahrir labels itself “peaceful” but strategically objects to violence only for the time being. The group sympathizes with the Muslim Brotherhood, considers Europe's democracies “a farce” -- and deems the U.S., UK, and Israel works of “the devil” -- and seeks to impose Islamic law (Shari'a) worldwide.

Major banks from Citigroup, HSBC, Chase, Bank of America and Lloyds TSB -- probably unaware of the etymology of Islamic finance -- established subsidiaries offering Shari'a-compliant products. Mutual funds at Principal Financial Group, UBS, Amana Funds and SEI Investments, among others, followed suit. [Slowly selling America's children and grandchildren into slavery... IMO, traitors all.] Especially late last year as the devastating toll of sub-prime mortgage lending mounted, clients were assured that Islamic banking -- in many respects a dangerous financial fad -- was much safer than other banks and investment houses.

“Islamic banking is in the toxic derivatives genre,” says Columbia MBA Joy Brighton. Each counter-party agreement within its complex “boxes” of interwoven counter-party risks, is a contract for “payment” and “delivery/receipt of funds.” Issuers create derivatives when they “peel off and resell pieces” from individual securities containing multiple counter-party contracts. One default by a party to any of the interwoven contracts in a “box” can cause its whole structure to collapse.

Moreover, Islamic finance is doubly toxic. Many banking corporations have created Islamic subsidiaries, says Brighton -- segregated oil wealth managed by “outside money managers” and Islamic radicals who don't circulate money globally, but keep it “within the Islamic community, as a charity- and jihad-funding mechanism.” They're just another economic time bomb that financiers have blindly bought. -- ###

Alyssa A. Lappen is a former Senior Fellow of the American Center for Democracy, former Senior Editor of Institutional Investor, Working Woman and Corporate Finance, and former Associate Editor of Forbes. Her website is www.AlyssaaLappen.org.