RandiZuckerberg loves Dubai and CNN

@RandiZuckerberg Al Qaeda loves journalists. just ask Daniel Pearl. Randi is going 2 love CNN. terrorists are more polite then American Jews like myself. I’m sure the Shia loyal to Iran would love for Randi to tell them any backdoors on your brother’s social network. talk about a security risk. If a Zuckerberg gets kidnapped then every Jew’s profile info is at risk and don’t think she would put her neck out for ya my Jewish friends, she is irreverent to all us “Conservatives” that are worried. oh and gasp,,, she would put all those poor Iranian activists at risk. hope Dubai is Maaaahvolous!

Islamic Default

Interest-free ‘sukak’ bonds at first withstood the economic crisis, but Dubai’s Nakheel default has hurt their reputation
By Lorne Cutler

With $25-billion in Dubai debt potentially in default, much of it on the spectacular Palm Jumeirah – the palm-shaped island off this Middle East emirate —

the ramifications of Dubai’s debt problems go far beyond the potential for global contagion. A default will also test the true nature and performance of Islamic financing under stress. This critical area to watch has never really been tested before.

Islamic financing has been growing rapidly in importance in many Muslim
countries as well as in Western countries with large Muslim
populations. With almost a trillion dollars in assets worldwide,
Islamic financing has attracted the interest of Islamic banks and
conventional banks alike, particularly in Dubai.

Dubai
World (DW) is the holding company for the business assets of the
Government of Dubai. While most of the debt incurred by DW and its
subsidiaries was conventional, a significant amount was Shariah
compliant. Of DW’s $60-billion in debt, Nakheel, one of Dubai’s largest
real estate developers, issued $5.2-billion in Islamic bonds of which
$3.5-billion is due this month. Nakheel and DW are not able to pay this
debt and are trying to reschedule.

As interest is not
allowed under Islamic law, three broad financing structures have been
developed by Islamic scholars, all involving bank purchases of the
goods that the buyer wishes to procure. The bank will then either
resell the goods to the buyer (Murabaha), lease them to the buyer
(Ijarah), or go into partnership with the buyer with the bank putting
up the money and getting a return only if the venture is profitable
(Musharaka). While lenders have modified these structures to minimize
their exposure to the underlying commercial transaction, Islamic loans
must obtain the approval of Islamic scholars. It is often controversial
as to what structures are truly Shariah compliant.

The sukuk
or Islamic bond was further developed to facilitate Islamic financing.
This instrument allows the debt to be securitized and syndicated, while
the underlying financing must follow one of the acceptable Islamic
structures. Sukuks are traded on the Nasdaq Dubai exchange. Elaborate
sukuks have been developed to mitigate risk and provide returns similar
to that of conventional interest-bearing loans.

Existing
Nakheel assets were sold to a special purpose vehicle (SPV) and the
assets were then leased back to Nakheel. The SPV raised the funds to
buy the assets by issuing lease-based sukuks. The proceeds of the sukuk
were used to fund construction of the Palm and the sukuk holders were
to be paid out of Nakheel’s lease payments to the SPV.

The
major strength of sukuks was also their major weakness. There had been
no history of sukuk defaults. While this was very reassuring to lenders
it also meant that there was no experience as to how the Dubai courts
would treat a sukuk in default.

The potential default of
Nakheel’s sukuk raises key issues for both sukuk holders and proponents
of Islamic financing. While structured according to Shariah law, sukuks
are typically governed by U.K. law and international arbitration. There
is no experience as to how the courts of Dubai will view these bonds
and whether U.K. or Shariah law will take precedence. The prospectus
warned that the Dubai courts are not bound to enforce U.K. judgments
without re-examining the merits of the case and may not consider U.K.
law as the governing law. If Islamic lenders are supposed to risk
share with the borrower, the courts may consider Islamic loans lower
priority to Nakheel’s or DW’s conventional debt. Lenders would probably
rather see these loans restructured than be pursued through the
courts. Acceptance of DW’s waiver of sovereign immunity also needs to
be watched.

Different Islamic scholars have different
interpretations of what is permissible under Shariah law. Nakheel’s
sukuk was approved by the Dubai Islamic Bank’s Shariah board. It is not
known, however, as to how the Dubai courts would react should some
other Islamic scholars come forward and make a case that the loans were
never Shariah compliant. Nakheel’s sukuks were secured by existing real
estate developments and land. Even if this security is enforceable,
with the 50% decline in real estate values in Dubai, the security is
not worth what it once was. If the sukuk structure and security cannot
stand up in court, Dubai’s ability to attract conventional and Islamic
financing will be jeopardized.

The other challenges posed by
the current situation are to the religious scholars. Islamic scholars
tend to view Islamic financing as being morally superior to
conventional financing due to its prohibitions against interest and the
taking of undue risk. As last year’s banking crisis for the most part
bypassed Islamic banks, this sense of Islamic financing’s moral
superiority was reinforced for many.

The default of Nakheel’s
sukuk clearly shows that Islamic banks are not immune to taking undue
risk and conducting insufficient due diligence. While real estate
bubbles can form anywhere, Dubai’s was more obvious than most. Islamic
lenders were no different than conventional lenders in ignoring the
growing real estate bubble and will now have to re-evaluate their
perception of risk the same as conventional lenders. Such reflection
may result in a shift to musharaka financing structures which are often
considered to be more acceptable by Islamic scholars. The risk of
default is lessened as debt payments are only due if the venture is
profitable but the risk of loss is higher. If this reduces the use of
less risky murahabas and ijarahs, Islamic banks could lend less and be
less profitable.

Regardless of the outcome of the Dubai debt
crisis, this crisis will force changes in how both conventional and
Islamic banks consider risk in Shariah financing.

Financial Post
lacutler1@hotmail.com
Lorne Cutler is an Ottawa-based independent financial consultant.

Photo: The Burj Dubai, man’s tallest structure: There’s never been a default of interest-free debt. Which means there’s no precedent. (Getty Images)

via network.nationalpost.com

The Dark Side of the United Arab Emirates – Hudson New York

We are setting up civilian nuclear technology in an oil rich area that (1) will distribute the technology to terrorists (2) is a hub of weapon dealers and human rights abuses including sex slaves (3) is an unlimited police state that is equivalent to the Taliban (4) Arrests non Muslims and offers pardons to those that convert to Islam (5) spreads propaganda for more terrorism (6) discriminates against Israelis (6) and finally monopolizes Telecommunications (7) …and we allow these same people to buy our top NYC Real Estate?

Posted via web from noahdavidsimon’s posterous

The Dark Side of the United Arab Emirates

As Dubai and its investors sort out the consequences of overexpansion, a larger, darker side of the United Arab Emirates is still a tight secret — particularly their acquisition of nuclear technology and the easy potential for proliferation; their human rights abuses; and violations of their World Trade Organization agreements.

Nuclear Technology: The Obama administration is planning to provide nuclear capability — of course publicized as Civilian Use Nuclear Technology – to the UAE, despite the high probability of its falling into the hands of terrorists and rogue tribes and nations in the area, including the UAE’s close trading partner, Iran.

What the UAE do not want you to know is that not only was it one of only three countries in the world officially to recognize the Taliban, but that two of the 9/11 hijackers were UAE nationals – a fact somehow never brought up even, apparently, in the FBI and CIA reports of 9/11, despite one of the hijackers having been on a UAE Government-funded military scholarship in the US at the time.

As many other UAE citizens also contribute to the terror ranks in a society still based more on tribal loyalty than on democratic norms, this proposed transfer of nuclear technology can only pose a direct and immediate threat to US allies and interests in the region, as well as to Israel.

Human Rights Abuses: These abound, especially in Sharjah, a constituent state of the UAE, best known as a hub for internationally wanted weapons dealers, for which the Sharjah airport cargo section is famous — an open secret that no one in the Middle East wishes to spell out, due to harsh and swift consequences.

The laws in Sharjah can best be described as one step better than those of the ousted Taliban. Members of the Criminal Investigation Department [CID] are undercover policemen with unlimited powers — and no accountability.

Arrested non-Muslims, for example, are unofficially offered the option of converting to Islam whereby they will be pardoned, or of being prosecuted in the harshest way possible.

Internet cafes selling VOIP (telephone communication over computers) products have been shut down and the attendants of the cafes arrested, tortured, and illegally detained by the CID to try to extract forced confessions.

The American University of Sharjah is a hotbed of pro-Palestinian propaganda and fund-raising for Palestinian causes, without of course, ascertaining to what ends these funds are to be used. It is baffling therefore why the US would continue to recognize such a university. And Jewish Heritage is openly abused, at least verbally, on the streets.

Although the UAE’s constitution does not ban the practice of any religion including Judaism,and the rulers of the UAE have happily gifted lands for Hindu temples and Christian churches, there is not yet one synagogue in the UAE. Individuals and families of Jewish heritage are routinely exposed in the streets to open abuse and live in perpetual fear. The current president of the organization representing the Arab boycott of Israel is a UAE national, and UAE has a policy that individuals with an Israeli visa or stamp on their passports will be denied entry into the UAE – although this rule is often waived in deference to international pressure or international commerce, and then claimed as a “large-hearted gesture” toward Israel.

Violations of WTO Free Trade Agreements: Although a signatory to free trade agreements, the UAE does not, for instance, allow American companies to legally operate within its billion dollar VOIP sector and allow users to make computer-to-mobile-phone calls. This is done to protect the state-owned monopoly, Etisalat [Emirates Telecommunications Corporation], although recently Dubai started a similar company, DU.

The government company that facilitates this violation of the free trade agreements is the Telecom Regulatory Authority [TRA], whose website does not name its Board members, possibly for fear of being blacklisted.

However the fact that Etisalat and the government of the UAE are actively purchasing shares and interest in the telecom of other countries in the region — including the Middle East, North Africa, India, Pakistan and Southeast Asia – while denying such benefits in the UAE, is a punishable offense. It also presents the possibility that rogue members of the UAE are able to control, eavesdrop, and have unlimited access to communications, conversations, SMSes and the like.

Moreover, the UAE, which illegally shuts out American companies the right to participate in its lucrative VOIP sector, has, either directly or through its front-companies, delved into a buying spree of its own in the US. Their assets include:

– A tower and adjacent plot of land at 1466 Broadway, owned by the UAE company, Istithmar, which also owns Dubai World.

– Jumeirah Essex House New York, on Central Park South, Jumeirah being a district in Dubai.

– Barney’s Department Store, New York City

– Mandarin Oriental Hotel, New York City

– W Union Square Hotel, New York City

.There is no reason for the US to look the other way as the UAE closes the door to American entrepreneurs who would like to invest in the VOIP Market: Congressional hearings are probably in order.

There is also no reason, while the UAE benefits substantially from the US economy, for the US to continue to continue to countenance bald violations of human rights and one-sided business practices.

And there is certainly no reason for the US to pour more nuclear capability into a region where neighbors are rough, borders porous, and succession uncertain at best.

It is high time for the UAE to be held accountable on the international stage: it has gotten away with too much for too long.

via hudsonny.org

Muslims Against Sharia Blog

Thousands of Palestinian workers in Dubai may lose their jobs due to the financial crisis there, economists project.

Over the past few months, thousands of the estimated 100,000 Palestinian laborers working in Dubai have lost their jobs.

The Gulf state’s economy is grinding to a halt, due to the huge international debts the country took on to drive its breakneck expansion coupled with the global economic crisis.

Last week, the Dubai government announced its flagship conglomerate needed a six-month halt to interest payments on $59 billion worth of debt.

via muslimsagainstsharia.blogspot.com

Posted via web from noahdavidsimon’s posterous

Might be a good idea to lock down those Israeli borders this year.

Dubai’s Economy about to fall even with oil profits

Thu Nov 26, 9:16 AM ET

Rising high among the towers in Business Bay, Burj Dubai, the world tallest tower, which is still under construction, is scheduled to be open in January 2010 in Dubai, United Arab Emirates, Thursday, Nov. 26, 2009. In a brief statement Wednesday, Dubai’s government said its main development engine, Dubai World, would ask creditors for a ‘standstill’, and to delay maturity of its $60 billion debt until at least May 2010.

DUBAI, United Arab Emirates – Just a year after the global downturn derailed Dubai‘s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills — causing a drop on world markets Thursday and raising questions about Dubai’s reputation as a magnet for international investment.

The fallout came swiftly and was felt globally after Wednesday statement that Dubai’s main development engine, Dubai World, would ask creditors for a “standstill” on paying back its $60 billion debt until at least May. The company’s real estate arm, Nakheel — whose projects include the palm-shaped island in the Gulf — shoulders the bulk of money due to banks, investment houses and outside development contractors.

In total, the state-backed networks nicknamed Dubai Inc. are $80 billion in the red and the emirate needed a bailout earlier this year from its oil-rich neighbor Abu Dhabi, the capital of the United Arab Emirates.

ruler, Sheik Mohammed bin Rashid Al-Maktoum, had continually dismissed concerns over the city-state’s liquidity and claims it overreached during the good times.

When asked about the debt, he confidently assured reporters in a rare meeting two months ago that “we are all right” and “we are not worried,” leaving details of a recovery plan — if such a plan exists — to everyone’s guess.

Then, earlier this month, he told Dubai’s critics to “shut up.”

via news.yahoo.com