Wallpaper Zilivyflaba: [MyTuneBD.Com] The beginning of the collapse of 21st-century Riba-based capitalism

The beginning of the collapse of 21st-century Riba-based capitalism

By: Hussain Khan, Tokyo

It is very strange to find Khan Arif accepting authority of Quran and Hadith but denying that bank interest is Haram only in the eyes of ORTHODOX ULAMA. I have Master's degree from Tokyo University in Economics and, not in that category of ORTHODOX ULAMA, affirm that the ORTHODOX ULAMA are right in their interpretation of Bank interest as Haram.

It is because of this universal view of all Muslim economists (except Khan Arif) that now Islamic banking is being adopted by all major banks of America and Europe including hundreds of banks in Muslim countries including in almost all Arab countries, Bangladesh, Pakistan, Malaysia etc. The concept of Islamic banking is in other words INTERESTLESS BANKING. Your views, Mr. Arif about banking, Interest and Islam are all out of date.

That thousnads of banks in the world are based on Interest does not prove that bank interest is something beneficial for a capitalist or any other kind of economy.

Mismanagement is of course one of the causes for Bear Stearns collapse. But it is not the only cause. The major cause is its heavy exposure to subprime mortgage loans. These loans are all interest-based. The interest was very small in the beginning to lure American householders. As soon as they started increasing the interest rates, after a certain period of time, according to the complicated terms of their loan contracts, which were not well-understood by the home buyers, they started to become bankrupt. Now Bush government is taking measures to teach them to be aware of such hidden dangers for future loan applicants. The number of bankrupcies were so huge that almost all big banks in Europe, America, and Japan had to undergo big losses, which may amount to over 400 billion dollars, according to recent authentic estimates. Sovereign funds from China, Singapore and Arab countries came to the rescue of Citigroup and ond other big-name banks. UBS and other Swiss banks also suffered huge losses. All these banks did not suddenly started suffering from mismangement. They all do not ascribe their losses to mismanagement, as you are trying to tell us. Rather the suffering banks admit, openly and frankly, without any doubt or hesitation, the primary cause being the interest or riba-based subprime mortgage housing loans of American householders. Not only Bear Stearns but all these banks in the world are now suffering from the riba-based housing loans. Bin Waleed is right in pointing out one of those financial institutions that has gone under. I will point you out many more or you can daily read in the newspapers a long list of banks and financial institutions declaring their huge losses in billions of dollars at the end of their financial year due to their exposure to interest-based or riba-based housing loans.

My friend, BW has pointed out only one financial institution or bank. As a matter of fact, whole American economy is now facing unprecedented economic downturn and possible recession. The US may no more remain a Super Power after this debacle. Noble Prize winner economist, Stiglitz has RECENTLY CALCULATED and published a book that American economy has to undergo a total of 3 trillion dollar burden due to Iraq war. Rumsfeld, ex-Defence Secretary, had estimated it only 50 billion dollar before starting this war. Stiglitz has also pointed out in detail in an article in the New York Times that one of the cause of the current subprime mortgage housing crisis is the huge, 3-trillion dollar, burden on the economy that emanated due to its Iraq war aggression.

The cause of Fed cutting Interest rates suddenly in a very short term from 5.25% to 3% and may even cut further in a few days and for providing billions of dollars to financials institutions is all the same riba-based capitalism showoing its collape through housing mortgages. The cause of dollar falling against all world currencies and even the cause of prices of Oil, Gold, Wheat, Corn and other commodities going up constantly are all related to this riba-based capitalism.

How they are related to each other, or to speak the truth, how it all started due to riba-based housing loans? The simple mechanism is as follows: Riba-based housing loans have caused immense losses to all big finanancial institutions of the world. It generated a CREDIT CRUNCH in the market. Congress passed a 160 billion dollar package to rescue and boost the falling American economy recently. American government is going to start giving back cash checks of $600 to singles and $1200 to married couples of small tax payers and other poor Americans. To ease this CREDIT CRUNCH Fed had to suddenly reduce Interest rates to 3% and may reduce it even more in near future. The Fed was reducing it little by little constantly every time a meeting of Federal Reserve Board was held since last September. Due to constant reduction of interest rates of dollar and the prospects of further reductions in future, the charm of keeping assets in dollars started to constantly evaporate Therefore investors started to sell their dollar bonds, other assets and stock investments in dollars, as the future prospects showed that the value of dollar will go further down and down. So, a flight from dollar started for other currencies as Interest rates are much better in Britain, Europe, Australia and New Zealand etc. Assets in dollars were further converted and exchanged to every other thing of value available in the world markets. Dollars were converted to other assets. They started pouring in to buy Gold, Oil futures, Wheat, Corn and other commodity futures as well. ( In case of Corn, a little was diverted for ethanol too). This mechanism is sufficient to explain how riba-based subprime mortage loan bankruptcies are the basic cause of all these economic upheavals not only for America but for all other parts of the world as well. Higher prices of commodities are affecting the entire world. Japan's exports are also falling due to higher Yen and lower dollar. Same is the fate of all countries who are exporting their goods to America.

Let us have faith in what Allah has said in Quran and Hadith and how it is applied to bank interest by ORTHODOX ULAMA. The beginning of collapse of 21st-century Riba-based capitalism has produced further evidence of truth as revealed to our Prophet (Peace be upon him) 1500 years ago regarding all kinds of Interest including the bank interest.

Regards,
Hussain Khan.

----- Original Message -----

From: Khan Arif

To: kaukab siddique ; Bint Waleed ; pakistanaffairs@yahoogroups.com ; tahirakhan@comcast.net ; muslimchronicle-owner@yahoogroups.com ; Ismailism ; The Muslim Chronicle ; Farzana Hassan ; G.Waleed Kavalec ; Yousef Tabish ; sajjada987@wmconnect.com ; tarekfatah@rogers.com ; mnaquvi@yahoo.com ; shaukatmx@hotmail.com ; turkman@sbcglobal.net ; jazoo52000@yahoo.com ; khasif235e@yahoo.com ; ghulam1111@yahoo.com ; the-karachi-world@yahoogroups.com ; bazmtoronto@hotmail.com ; abusara2k@hotmail.com ; ahlam_albahr@yahoo.com ; ishtiaq.ahmed@statsvet.su.se ; ahmed_air23@hotmail.com ; amino66@hotmail.com ; asrarsons@hotmail.com ; latif@nexlinx.net.pk ; khurram302@yahoo.com ; mustafa_quest@yahoo.com ; firasat777@yahoo.com ; tanntu1@yahoo.co.uk ; malam55@hotmail.com ; k2411871@hotmail.com ; anwerkhurshid@hotmail.com ; hanif_mo@hotmail.com ; idara@toluislam.com ; tmian60022@aol.com ; salsabeel65@yahoo.com ; spicedup@thespicestore.com ; ssmeezan@hotmail.com ; tarekfatah@canada.com ; yaqubhasan@hotmail.com ; pk4318@yahoo.com ; rishidwivedi1@gmail.com ; sohail972002@yahoo.co.in ; tarot66@yahoo.com ; mianwaheed@yahoo.com ; munirsaami@yahoo.com ; smshaikhair@yahoo.co.in ; ums786@hotmail.com ; wyeknotusa@aol.com ; zkr_salleh@yahoo.com.sg ; aghaji@buckeye-express.com ; jollygood2019@yahoo.com ; dr_umar_azam@yahoo.co.uk ; asif_jalil@yahoo.com ; khalid_sayyed@hotmail.com ; humanfriend@hotmail.com ; asif89@hyd.paknet.com.pk ; col_adeeb@yahoo.com ; smahmud@qis.net ; msa40@aol.com ; shariqkmhamid@yahoo.co.in ; rahrulz@hotmail.com ; boom@pd.jaring.my ; uarain@hotmail.com ; asghazali786@yahoo.com ; uarain@gulfconsult.net ; islamabadaffairs@yahoogroups.com ; americanrealwideminds@yahoogroups.com ; hasniessa@yahoo.com ; pakistanpost@yahoogroups.com ; writers_forum@yahoogroups.com ; multiculturalism-pluralismgroup@yahoogroups.com ; batunimurid@yahoogroups.com ; worldismailis@yahoogroups.com ; notun_bangladesh@yahoogroups.com ; uma@umanet.org ; mikeghouse@aol.c

Cc: Pakistan Post ; muslimummat@yahoogroups.com

Sent: Wednesday, March 19, 2008 3:02 PM

Subject: [notun_bangladesh] RE: Collapse of riba-based capitalism

Kaukab Sahib: BW is dead wrong about the reason for failure of an investment bank that she attributes to interest rather than bad management and imprudent investments in shares and granting loans to entrepreneurs for unsound projects. Any bank with such unsound investment and management would meet the same fate whether it employs interest or grants loans on profit and loss sharing.



Pray tell us why Allah has declared war only one of hundreds and thousands of banks. Why Switzerland the international hub of Western Banking has been spared? What is the definition of Riba in Quran? How many kinds of riba are given in Hadiths? Why can't all those kinds of riba given in hadiths be treated as unethical gain including usury rather than interest?



You need better arguments to refute Al Azhar verdict about admissibility of bank interest. You also need to broaden your understanding of fiat currency and Forex fluctuations and IMF.

But of course, we can treat the views of orthodox ulema about bank interest just as we treat their views about shutting down our women behind burqa and dividing the ummah over such simple things about commencement of a month under Hijri calendar from different weekdays in different countries and even communities within a country. You can shun music, laughter, photography and ask dead Pirs for salvation rather than acting upon the basics of Islam.

Arif Khan

 

Arif Khan .

kaukab siddique <butshikan@msn.com> wrote:
Sis. Bint Waleed is right again. American capitalism has sensed for 20 years now that the lower the interest, the better for business. In fact they try to offer ZERO % interest.
The Ulema of Al-Azhar have been in government control for more than three decades. The Egyptian scholar Dr. Omar 'Abd al-Rahman [the blind Shaikh], Ph.D from Al-Azhar, is very clear that Riba and bank interest are the same: usury. He is a much greater scholar than anyone else from al-Azhar.

Sincerely
Kaukab Siddique, Ph.D

Date: Mon, 17 Mar 2008 19:04:11 -0700
From: ank2000pk@yahoo.com
Subject: Re: Collapse of riba-based capitalism
To: bintwaleed@yahoo.com; PakistanAffairs@yahoogroups.com; tahirakhan@comcast.net; MuslimChronicle-owner@yahoogroups.com; ismailism@yahoogroups.com; muslimchronicle@yahoogroups.com; farzanaqazi@yahoo.com; kavalec@gmail.com; youseftabish@yahoo.com; Sajjada987@wmconnect.com; tarekfatah@rogers.com; mnaquvi@yahoo.com; shaukatmx@hotmail.com; turkman@sbcglobal.net; jazoo52000@yahoo.com; khasif235e@yahoo.com; ghulam1111@yahoo.com; The-Karachi-World@yahoogroups.com; bazmtoronto@hotmail.com; abusara2k@hotmail.com; ahlam_albahr@yahoo.com; ishtiaq.ahmed@statsvet.su.se; ahmed_air23@hotmail.com; amino66@hotmail.com; asrarsons@hotmail.com; latif@nexlinx.net.pk; khurram302@yahoo.com; mustafa_quest@yahoo.com; firasat777@yahoo.com; tanntu1@yahoo.co.uk; malam55@hotmail.com; k2411871@hotmail.com; anwerkhurshid@hotmail.com; hanif_mo@hotmail.com; idara@toluislam.com; TMian60022@aol.com; salsabeel65@yahoo.com; spicedup@thespicestore.com; ssmeezan@hotmail.com; tarekfatah@canada.com; yaqubhasan@hotmail.com; pk4318@yahoo.com; rishidwivedi1@gmail.com; sohail972002@yahoo.co.in; tarot66@yahoo.com; mianwaheed@yahoo.com; munirsaami@yahoo.com; smshaikhair@yahoo.co.in; ums786@hotmail.com; Wyeknotusa@aol.com; zkr_salleh@yahoo.com.sg; aghaji@buckeye-express.com; jollygood2019@yahoo.com; dr_umar_azam@yahoo.co.uk; asif_jalil@yahoo.com; khalid_sayyed@hotmail.com; humanfriend@hotmail.com; asif89@hyd.paknet.com.pk; col_adeeb@yahoo.com; smahmud@qis.net; msa40@aol.com; shariqkmhamid@yahoo.co.in; rahrulz@hotmail.com; boom@pd.jaring.my; uarain@hotmail.com; asghazali786@yahoo.com; uarain@gulfconsult.net; butshikan@msn.com; islamabadaffairs@yahoogroups.com; americanrealwideminds@yahoogroups.com; hasniessa@yahoo.com; pakistanpost@yahoogroups.com; Writers_Forum@yahoogroups.com; Multiculturalism-PluralismGroup@yahoogroups.com; batunimurid@yahoogroups.com; WorldIsmailis@yahoogroups.com; notun_bangladesh@yahoogroups.com; uma@umanet.org; MikeGhouse@aol.c

To attribute the failure of a bank to the interest factor is wrong.
If the reason given by BW were correct hundreds of thousands of other banks in
the West would not be so prosperous and standard of living of their people
would not be so good and most of Mulim Ummah may not be dependent
on their financial and technical assistance. The trouble is that bigots
do not realize that the actual meaning of Riba is unethical gain and
not interest. The verdict of Al Azhar ulema treating bank interest as
profit rather than usury is correct. The bank interest rate regulated
by the government cannot be treated as usury.

Arif .

Bint Waleed <bintwaleed@yahoo.com> wrote:

The riba based capitalism is sinking into extreme weakness. Abolition of interest is the only way to avert a collapse of the parasitical economic system. Allah subhana wa ta'ala declared that He and His Messenger will wage war against those who persist in riba (2:279).

The widespread ignorance concerning the prohibition of riba is most certainly a confirmation of sign of the Last Hour spoken of by Prophet Muhammad Sallallahu Alayhi Wassalam.

Bint Waleed

===============================================

After Bear Stearns Rescue, Who's Next?
Monday March 17, 1:27 pm ET
By Joe Bel Bruno and Madlen Read, AP Business Writers

With JPMorgan Deal to Rescue Bear Stearns, Market Wonders Which Investment Bank May Fall Next

NEW YORK (AP) -- With a deal in place to save Bear Stearns from bankruptcy, the company's shares traded above the offer price Monday even as investors began turning a critical eye to other investment banks amid worries about how far the credit contagion could spread.

Despite the weekend agreement for JPMorgan Chase Co. to buy Bear Stearns for a fraction of its value last week, worries that other banks had sizable exposure to troubled credit markets sent global markets tumbling. The uncertainty was evident on Wall Street, where the Dow Jones industrials sank by more than 100 points.

At Bear Stearns' 47-story headquarters in midtown Manhattan, many employees said they still couldn't believe that the nation's fifth-largest investment bank is -- essentially -- out of business. Employees said there was no meeting to inform employees about what was happening.

Instead of making money, Bear Stearns employees trudged boxes of their personal belongings out of the investment bank while JPMorgan managers filed into it for the first time from that bank's headquarters directly across the street. While no layoffs have been announced, analysts expect that they could be significant.

A complete collapse of Bear Stearns might have crushed the already-dwindling confidence in the global financial system, which has frozen up after last year's troubles in the subprime mortgage market.

Bear Stearns was the most exposed to risky bets on the loans; it is now the first major bank to be undone by that market's collapse. But the fact that a major investment bank could reach the verge of buckling -- and be sold at such a discount -- sent dismay through Wall Street and beyond.

"One reaction is shock that a company that reaffirmed its book value at around $84 on Wednesday can be worth $2 per share four days later on Sunday," said Deutsche Bank analyst Mike Mayo.

While employees struggle to find any information they can, the financial industry wants to know exactly how badly Bear Stearns bet on mortgage-backed investments. Unwinding the nation's fifth-biggest investment houses should provide some insight into what other financial institutions might have on their books.

With Bear Stearns seemingly gone, investors pondered who might be next. Lehman Brothers Holding Inc. stock fell more than 34 percent Monday, following a 15 percent drop on Friday amid concerns it might be facing similar liquidity issues. Lehman Chief Executive Richard Fuld denied Monday that the firm was having such problems.

Bear Stearns shares fell $26.32, or 87.7 percent, to $3.68 -- above the shockingly low price of $2 per share that JPMorgan Chase is paying -- while JPMorgan rose $3.03, or 8.3 percent, to $39.57. UBS AG, hit hard by the same type of write-downs for mortgages that felled Bear Stearns, dropped nearly 12 percent in Zurich.

JPMorgan announced Sunday night that it would acquire Bear Stearns for $236.2 million in a deal that was fast-tracked by the federal government to avoid a bankruptcy. The price represents roughly 1 percent of what the investment bank was worth just 16 days ago.

The Federal Reserve and the U.S. government swiftly approved the all-stock buyout to complete the deal before world markets opened. The Fed also essentially made the takeover risk-free by saying it would guarantee up to $30 billion of the troubled mortgage and other assets that got the nation's fifth-largest investment bank into trouble.

"This is going to go down in very historic terms," said Peter Dunay, chief investment strategist for New York-based Meridian Equity Partners. "This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we're probably heading into a recession."

JPMorgan said it will guarantee all business -- such as trading and investment banking -- until Bear Stearns' shareholders approve the deal, expected to be completed during the second quarter. The acquisition includes Bear Stearns' headquarters, which as one of the world's tallest buildings could fetch more than $1 billion in a sale.

JPMorgan Chief Financial Officer Michael Cavanagh did not say what would happen to Bear Stearns' 14,000 employees worldwide, or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns' prime brokerage business, which completes trades for big investors such as hedge funds.

At almost the same time as that deal was announced, the Fed said it approved a cut in its lending rate to banks to 3.25 percent from 3.50 percent and created another lending facility for big investment banks. The central bank's official meeting is Tuesday. Before the emergency move to lower the discount rate -- the rate at which banks lend each other money -- the Fed was widely expected to again cut its headline rate by as much as a full point to 2 percent.

Wall Street analysts say the rescue bid was more than just saving one of the world's largest investments banks -- it was a prop for the U.S. economy and the global financial system. An outright failure would cause huge losses for banks, hedge funds and other investors to which Bear Stearns is connected.

After days of denials that it had liquidity problems, Bear was forced into a JPMorgan-led, government-backed bailout on Friday. The arrangement, the first of its kind since the 1930s, resulted in Bear getting a 28-day loan from JPMorgan with the government's guarantee that JPMorgan would not suffer any losses on the deal.

AP Business Writers Jeannine Aversa in Washington and Stephen Bernard in New York contributed to this report.

Arif N. Khan
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