Tag Archives: Islamic finance

Breaking news – Islamic finance is not going to save the world

I was watching Mock the Week last week and apart from it being absolutely brilliant – topical, insightful and funny – it dawned on me that there are lots of news stories popping up on a regular basis that make you sit up and wonder.  With this in mind and having seen how other people nick stuff from newspapers to put in their blogs here is what caught my eye.

First up the very sad story of the Georgian luge rider who died at the Winter Olympics when he came off the track at nearly 100mph and hit a metal pylon.  These guys and girls are barking mad and I just watched the skeleton which looks the same as the luge – throwing yourself down a mountain on a tea tray – but with skeleton you do it head first.  Luckily you get to wear a helmet.  I hate to say it, but for anyone doing the skeleton there is a big elephant-sized clue in the name!  Back to the luge, the International Luge Federation, Vanoc and the police investigation has concluded it was the athlete’s fault.  I look the other way whenever I detect the aftermath of a car crash, a sort of back to front rubber-necker, but I couldn’t help but notice the metal pylon he hit was totally missing the sort of protectors you see on a set of rugby posts in a local park.  Oversight seems a very weak word when extreme negligence is bang on the money.

For a full report click on: http://www.bbc.co.uk/blogs/lizziegreenwoodhughes/2010/02/tragedy_of_terrifying_whistler.html

At this point I need to mention that on the mad dogs and Englishman principle we are good at head-first down mountains.  Well done to Amy Williams for winning Britain’s first winter Olympics gold since forever – she comes from Bath and her training track goes down the side of one the grassy hills that surround this most beautiful of cities.

Back to a local story and the strange case of the missing in action saviour of the world’s financial system – Islamic Banking.  Now I’m one of the millions that struggles with the concept of Islamic Banking but got very excited when I was told it means you won’t be charged interest on loans. As a result I was first in the Tamweel queue when I was thinking of buying a property.  I swotted up and listened very carefully and as a result discovered you pay profit rather than interest and the very sad news is the profit rate is set at about 100 times what you would expect to pay in interest.  Now we’re told Nakheel’s struggles to repay a 4.1bn Islamic bond in December were the result of the inherent risk aspects of Islamic banking.  Quoting from Arabian Business:

Islamic bonds, known as sukuk, are governed by Shariah laws, which ban the payment of interest and stipulates agreements be based on the transfer of goods or services. Commenting the chief executive officer of Abu Dhabi Islamic Bank, Tirad Mahmoud, said “When you put a deposit with the bank, we don’t say, ‘This rate is what you are going to get.’ We say, ‘This is the expected profit rate. If anyone says there is profit without risks, they are not telling you the truth.”

For the full article click on: http://www.arabianbusiness.com/581583-adib-chief-islamic-banking-not-to-blame-for-nakheel-woes

On a less serious note (or so I thought when I first saw the story) was Andy Powell’s exploits in a golf buggy after the Wales v Scotland rugby international.  Now I remember the glorified stories of Willie John McBride’s 1974 Lions Tour when they trashed hotel rooms across NZ and invented the 99 call which was the signal for an all-in televised brawl (a sort of WWF but for real).  I’ve also been involved in various rugby tours which included behaviour such as borrowing a sheep from the local farmer and bedding it down for the night in the coach’s bedroom.  What made me smile were all of the old players pitching in to call Andy Powell an idiot for behaving like they used to do.  ‘People in glass houses shouldn’t take clothes off’ springs to mind.

For full details of Andy’s exploits click on: http://www.guardian.co.uk/sport/2010/feb/14/andy-powell-golf-buggy-wales

To end in the traditional way here are my top five vocalists of all time.  I presume that you agree with my choices as I wasn’t contradicted last week.  Or do you…?

  • Ozzy Osbourne
  • Edwin Starr
  • Johnny Cash
  • Florence Prosser
  • Aretha Franklin
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