The weapon of choice for the financial jihadists for some time now has been the Shariah-compliant bond, known properly as the “sukuk.”

The market for such derivatives has been developing in fits and starts for some time now, alternating between rashes of outright defaults and bouts of irrational exuberance. The whole purpose of sukuk are to allow Shariah-adherent Muslims to participate in the debt markets, something that has been closed off to them due to the Shariah prohibition on interest. In essence, a sukuk is a concoction in which interest is replaced by a convoluted arrangement of charges, fees and outright kickbacks to replicate the appearance of a debenture. It should be noted that these charges and fees fluctuate much as prevailing interest rates do, but almost always add up to greater cost to the investor than a conventional bond would incur.

Nevertheless, sukuk are becoming popular worldwide simply because Islamic imperialists are using them to impose Shariah. Essentially, they are saying,”If you want access to our capital, you must comply with our law.” And it works both ways. Whether it is the borrower or the lender, there is always an insistence on Shariah compliance, despite the fact that the world got along just fine before sukuk came along just a few years ago.

Anyway, the latest news in the sukuk market has been decidedly negative. According to HSBC, one of the West’s most notorious facilitators of Shariah-compliant finance, the third quarter has been one of the worst in the sukuk market in over 3 years and they’ve implied that their previous forecast for the market will end up having been way overblown. Perhaps all those charges, fees and kickbacks are discouraging investors?





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