Rape and exploitation: fears of Syria’s women refugees

Thousands of Syrians fled to Jordan’s Zataari refugee camp to escape violence at home. But now women and children live in fear of kidnap, rape and sham marriages in the camp meant to keep them safe.

If agony has a sound, it is the cry to God made by 100-year-old Shatwah, as she sits broken and bereft in the Zaatari refugee camp in Jordan.

In her black hijab, she raises her hands to the sky, almost unable to make sense of her own distress. “Bashar, Bashar,” she keeps crying. “Why are you butchering us?”

Shatwah (pictured above) is one of a hundred thousand Syrians whose home is now the sprawling, tented city of Zataari. They fled the fighting to seek shelter and safety. But for many women the camp has offered them anything but.

“Three girls in our camp were kidnapped,” explains Israa Mohammed. “They raped them. Then they brought them back to the camp. The Jordanian guys, they come to harass Syrian girls from the age of seven or six.”

They see we don’t have money. They want to exploit us. Give me your daughter for 200,000 lira or 100,000 lira. It’s exploitation. Abu Sanad, father

Such reports of women being kidnapped, assaulted or raped abound around the camp. Women say security is non existent. They are too afraid even to go to the toilet at night alone.

“I come with my daughter, she enters and I stand here waiting for her,” says Um Hammad. “There are girls who don’t come to the toilet at night. We stay until the morning, holding it in.”

Um Majed (pictured left) is a Syrian housewife from Homs. She says she understands the refugee families and women who give into the demands of the men from the Gulf offering desperately needed cash. These are “dark days” for Syrians, she offers up by way of reasoning.

She has chosen her own way to deal with such bleak times. She has become a marriage broker, offering Syrian girls for sex.

“He comes for a coffee and he sees her with her hijab, he pays the 100 dinar and leaves,” says Um Majed, outlining the charges. “If he wants to marry her, he has to pay 1,000 or more. He has to sign a marriage agreement and he takes her and even after one hour they can get divorced. It’s none of my business.”

Vigilantes

Frustrated by the authorities’ inability to deal with this problem, residents of the camp are forming vigilante groups. They patrol the area, they say to protect their women. They mete out their own justice on the men they decide are the perpetrators.

It is one of many problems the authorities now face. Young men, angry, frustrated and bored are running out of control. Several riots have broken out in the camp.

The United Nations says it is working hard with the Jordanian government to set up a proper policing structure and have announced a new security initiative.

But it may never ease the pain of the women refugees. That will only be soothed when they are allowed to go back to their beloved Syria.

Um Majed throws her head back and sighs. “I wish to go back to Syria. I wish to breathe the air of my country. Inshallah, I will go back.”

But it is more in hope than expectation. She recognises what their future might hold.

“I hope we don’t have the same destiny of the Palestinians who went out of their country and never went back.”

The film on the plight of Syria’s refugees will be shown on Channel 4 News on Thursday from 7pm. It was directed, produced and filmed by Sharron Ward. The editor was Agnieszka Liggett and associate producer was Yasmin Al Tellawy.

The marriage market

As well as the fear of attack , there is another more insidious assault on the women and girls of Zaatari. Men – usually from Saudi Arabia and other gulf states – are given free rein at the camp. Coming in the guise of benefactors offering charity, in return many want a wife.

But these are marriages of convenience – for the men at least. So called “pleasure marriages”, they give cover – a sheen of respectability – to what is often wealthy men exploiting vulnerable women for sex.

Abu Sanad is the father of two daughters. “People from Jordan, from Saudi Arabia, from Qatar, they come and ask: ‘Do you want to give your daughters for marriage?’” he said.

“What do they see us as? A market place for selling? Like selling sheep. They see we don’t have money. They want to exploit us. ‘Give me your daughter for 200,000 lira or 100,000 lira’. It’s exploitation.”

The men often promise the earth. “Lama” says she was told she would “live like a princess.” But the reality often means a few days or weeks out of the camp, then they are dumped alone in Jordan, or left to come back to Zaatari, humiliated and abused.

Muslim hajj pilgrims perform devil stoning ritual

MINA, Saudi Arabia—Chanting “God is great,” millions of Muslims on Sunday stoned pillars representing the devil in a symbolic rejection of temptation on the second day of their annual hajj pilgrimage, a day that also marks the start of the Islamic holiday of Eid al-Adha.

Vast crowds cast pebbles as they flowed past the three pillars, which now resemble curved walls, in a four-level sprawling concrete structure built to expedite the flow of pilgrims. The ritual will be repeated for two more days, with participants eventually throwing stones at all three pillars.

The ritual in the desert valley of Mina commemorates Abraham’s stoning of the devil, who is said to have appeared three times to the prophet to tempt him.

It is one of the most dangerous stages of the hajj, with the press of people around the pillars creating the risk of a stampede. In 2004, 244 people were killed, and the following year at least 360 others were killed when several pilgrims tripped over baggage while others behind them kept pushing ahead. Saudi authorities subsequently built the current complex to reduce the stampede danger.

Saudi authorities said Sunday that more than 2.9 million Muslims were performing the hajj this year.

Male pilgrims in the two-piece seamless white robes worn during the hajj, and women covered head to foot except for their hands and faces, chanted “God is great” while casting the pebbles.

“Hurry up, pilgrims,” Saudi security officers called out through loudspeakers, to prevent crowds from building up next to the pillars.

Afterward, pilgrims shaved their heads or clipped off a lock of hair, a tradition dating back to the Prophet Muhammad’s own pilgrimage. They are also required to slaughter a lamb or goat, representing the lamb that Abraham sacrificed in the place of his son Ishmael, although pilgrims may arrange for this to be done in a different location or in their own countries.

Sunday also marks the start of Eid al-Adha in remembrance of Abraham’s near-sacrifice of his son.

“Thank God that we are doing hajj this year. May God protect all Arab and Islamic countries,” said Dina Mohammed Ramadhan, a 27-year old pilgrim from Egypt, as she emerged from the crowed with her husband pushing her two babies in a carriage.

The five-day pilgrimage is packed with symbolism and ritual aimed at cleansing the soul of sin and winning absolution by tracing the footsteps of the Prophet Muhammad and of Abraham, whom Muslims view as a forefather of Islam.

Mecca development promises pilgrims better Hajj

A dozen glittering skyscrapers tower over Islam’s holiest shrine, the Kaaba, boasting hotel rooms with 24-hour butler service and luxury marble bathrooms. Below, throngs of Muslims perform the annual hajj pilgrimage, many of them impoverished, sleeping in the streets.

Saudi authorities have transformed the look of Mecca, Islam’s most sacred city, and are planning even more dramatic change in years to come. But much of the change has catered to high-end pilgrims, and critics say what is supposed to be an austere spiritual ritual bringing Muslims closer to God has turned into a luxury expedition for some.

Samir Barqah, a guide who runs tours of the historic city in Mecca, says luxury towers are turning Mecca into Manhattan.

“The fast urban development managed to remove all the character from Mecca,” Barqah said. “Mecca as our parents and grandfathers knew it no longer exists … Mecca is now becoming a layer of glass and cement sheets.”

The skyscrapers, sporting towering glass facades and luxury shopping malls, have sprouted up around the esplanade in front of the sprawling, multilevel Grand Mosque. The mosque surrounds the Kaaba, the cube-shaped shrine that Muslims around the world face during prayers and pilgrims circle seven times during the hajj rites.

Until recently, Mecca, the homeland of Islam’s seventh century Prophet Muhammad, was a rather ramshackle city, built up with little planning over several desert hills with low, often dilapidated buildings. It could barely handle the burden when the numbers of pilgrims descending on it every year were only in the hundreds of thousands.

Now those numbers are in the millions, making the hajj one of the biggest annual events in the word. And it’s only growing — officially nearly 3 million participated in this year’s pilgrimage, which was ending Friday, not counting hundreds of thousands of “unofficial” pilgrims who sneak into Mecca without hajj permits required by Saudi authorities.

So Saudi Arabia is launching a massive project to upgrade Mecca and nearby shrines over the next 10 years. The goal is to accommodate five times the current number of pilgrims.

“Don’t be surprised by anything in the next decade,” the governor of Mecca province, Prince Khaled al-Faisal told journalists Thursday, promising the most advanced technology to “make things comfortable for the pilgrims.” He wouldn’t give the cost, but said it was “unimaginable.”

The plan includes removing slums and old buildings around Mecca and replacing them with a new generation of housing and hotels. Authorities also plan to build new hospitals and improve transportation and communication infrastructure, said the governor’s deputy, Abdulaziz al-Khedheiri.

The housing will have “a diversity of levels, from one-star to seven star hotels,” he said. For this hajj, Saudi authorities unveiled a train line that carried pilgrims to one of the ritual sites in the deserts outside Mecca although that was reserved for Saudis and citizens of other Gulf nations until it becomes fully operational next year.

Already, buildings are being removed from hills on the northern side of the Grand Mosque to allow an expansion adding room for 1 million more people to pray. So far the expansion has cost $10 billion, al-Khedheiri said.

Management of the hajj is a major way for Saudi Arabia’s ruling family to tout the Islamic credentials central to its legitimacy. Saudi King Abdullah includes among his titles “the guardian of the two shrines” — Mecca and the nearby holy city of Medina.

Over the five days of hajj, the pilgrims trek simultaneously between a string of sites, from the Kaaba to Mount Arafat, a desert hill 12 miles (19 kilometres) away in the desert.

The kingdom has been expanding infrastructure in recent years, and some of the changes have doubtlessly saved lives. The rites at Mina, between Mecca and Arafat, often saw deadly stampedes as huge crowds tried to pass three stone walls symbolizing the devil to pelt them with stones. Now a complex resembling a gigantic, multilevel parking garage surrounds the walls, allowing pilgrims to file by them more easily, and no crushes have occurred since 2006.

But the grand scale — and luxury atmosphere — of some changes threaten to overwhelm the religious sites themselves at times. Historic sites, like houses believed to have belonged to the prophet’s family or old mosques, have been levelled in past construction.

Hayat Hama, a 47-year-old German pilgrim of Iraqi origin, said she didn’t care too much for the skyscrapers crowding the Kaaba. “They were pretty. But when I saw them, I thought they were part of the rituals, something for us to visit,” she said. Still, she said, her trip to Mecca was like “visiting heaven.”

The towers, which contain hotels and malls, are also a stark contrast to the conditions for other pilgrims. Many cram into rented houses, up to 20 people a room, or tromp between the holy sites with only a small tent to sleep under.

Al-Khedeiri pointed out that the land on which the skyscrapers are built is owned by Islamic authorities, so profits go to maintaining and upgrading the holy sites.

The worry is that the massive development will also favour wealthier hajjis in a pilgrimage that is supposed to be a time for Muslims to appear before God equal and pure and lead a few days of hermetic life.

Official pilgrims come through tour groups, which arrange transportation, hotels and space in the tent cities set up around Arafat and Mina. Just like any tour, the more you pay, the better the amenities. Covering the costs of hajj for the poor is a common charity activity in many Muslim nations. Unofficial pilgrims are often those who can’t afford the packages and come to Saudi Arabia long before the hajj season to do it on their own, or residents in Saudi Arabia who can reach Mecca easily.

Some of the luxury towers offer rooms with a view of the Kaaba — a favourite among the better off who don’t want to rub shoulders with the masses but want to still pray in sight of the shrine. Moreover, the rooms offer 24-hour butlers and even a so-called ‘hajj kit’ with designer clothes to be used in rituals, with prices ranging from a whopping $6,000 per night for a royal suite to $1,600 for the regular room. Officials said the hotels were at full capacity this year.

Even the tent cities outside Mecca are cashing in on the high-end. Nicer camps boast BBQs for dinner, juice stands, parasols and plastic chairs for leisure time.

“It is too expensive,” said Khaled Abdel-Maksoud, a 50-year old Egyptian civil engineer.

He has performed hajj for the past four years, each time without a permit, because he lives in the Saudi capital, Riyadh. Even so, this year, he spent nearly a $1,000 for his and his wife’s hajj. For the first days in Mecca, they slept in a rented flat with other families, and for the rest he camped out on the ground.

Along the roads between sites, hotels even rent rooms by the minute to allow pilgrims to pop in, change clothes or shower. They start off at $27 for 10 minutes, but on the last day soared to $267, Abdel-Maksoud said.

Ossama al-Bar, Mecca’s mayor, said new projects aimed at low to middle incomes are also on the list.

“We want every sector to find what they want in this holy city.”

Modern educations false promises

Ours is an age of crisis…a crisis in science, in literature, in thoughts, in perceptions, in attitudes, in behaviors and in relationships. Crisis is everywhere. It has pushed major parts of culture to a state of acute dislocation, conflict, destruction and bewilderment.

This is an age that is plagued with a deep-seated spiritual vulgarity…an age that erroneously forwards the responsibility of nourishing and nurturing children to schools, hardly realising their anti-educational effect on society.

Work, leisure, politics, city living – all are crippled to depend upon schools for their survival and growth.

Modern schools have marginalised the educational significance of family in their naked pursuit of individualism, opportunism and careerism. They are mushrooming at an unprecedented level at every nook and corner without proper guidance and moral values.

Ivan Illich, a renowned 20th century philosopher, warns:  “The escalation of schools is as destructive as the escalation of weapons.”

He further muses:

“School makes futile promises!”

He continues:

“Neither learning nor justice is promoted by schooling. It enslaves profoundly and systematically.”

In recent times, blind faith in schooling has affected familial influences. It has ceased home to be a place of education, recreation and edification.

School has brought about new ways of spending leisure hours with electronic gadgets at home. It has indisputably undermined family as a welfare service for its members in time of sickness and trouble.

To quote the Ministry of Education publication, United Kingdom Citizens Growing Up:

“Admittedly, conditions are not easy for a family living in the modern world. The climate of opinion is unstable, impatient and cynical. Cheap and easy pleasures, some unwholesome and corrosive, occupy an undue share of some parents’ time…..and some children’s and young parents too.”

One of the principal dangers of modern society is that it has formalised every sphere of human activity…be it infant care, pre-schooling, driving, sports training, drug counseling, pregnancy, mother care courses, marriage guidance, adult education, continuing education…almost all areas of human pursuit come under methodological supervision.

Man has really institutionalised most of the learning required of him in life. As Bowen and Hobson lament, “the world wide movement towards a mass, public institutionalized education is now creating a virtual crisis situation.”

The contemporary age has given in and bowed down to organised schools for its every possible future need without family being a stabilizing force to strengthen it. Gabriel Compayre comments:

“The school would be powerless, notwithstanding all its efforts to develop sensibility in children who have not brought the first germs of it from their home life. But how few are there who have been refused the tender smile of a mother! How many and happier are they, who according to the delicate phrase of a contemporary author, ‘before learning to speak have read affection in the eyes of their parents!”

Doubtless, it belongs mainly to the family to sow in the minds of the child the seeds of future life. The family certainly has precedence over the school by the priority, continuity and duration. That is how F. C. Happold puts it:

“Education comes not primarily through words, but through situations, not primarily through instruction, but from a pattern of living, not primarily through courses of study, but through an intangible spiritual atmosphere created by members of family.”

Nothing can compensate adequately for lack of parental affection and love.

“Whether the professional educators wish it or not”, writes Dame Olive Wheeler, “the fact remains that the home is the chief training growth of the emotions and consequently of character. The love of parents, brothers and sisters, the give and take of happy family life, the intimacies only possible in a small natural group, life in an atmosphere of consideration for others and respect for truth, beauty and goodness, these are what needed for the education of an individual.”

The argument leads …how should Muslims nurture their children? Should Muslim parents rely for everything upon contemporary schools, which generally follow non-religious, and anti-religious set up, method and organisation?

What should they do? Should children be sent into a school for a better and successful ‘man’ and hand them over to other authorities for religious training and knowledge? Should the two i.e. becoming of a prosperous man as well as an Islamic being, go together or separately?

Parents need to know that it is from their religion that their goodness, both as a prosperous man and a true believer flow, and Islam undoubtedly has revolutionised that idea of goodness.

“Let there arise among you an Ummah advocating all that is good enjoining what is right and forbidding what is wrong. They are the ones to attain peace and prosperity.” (Qur’an 3:104)

A Muslim’s future lies, not purely in academic pursuit, but in its eternal message of truth and beauty. Islam makes a unique place in the world of religion and has universal, standardised and a well-integrated system of patterns and beliefs – not merely as a religion but a complete and comprehensively way of life.

What a child, within an Islamic setting, is first to do, is to emancipate himself/herself from internal chains of false beliefs, faiths and ideals. It is to see if he/she does not indulge in misleading convictions and dogmas.

Islam contains both ‘verbal’ and ‘practical’ methods of moral education. Members of family must inculcate in them the feeling of awe and submission to Allah as the one and only God and make them realize Tawheed as the essence of Islam. They must guide children to the individual and collective goodness in the light of examples drawn from Sunnah of the Prophet and Islamic heritage. Currents of Islamic feelings and thoughts must run through their veins to get rid of false perceptions and patterns in life.

“We cannot help influencing our children; the only question is how and in what direction”, goes the remarks of R. M. Hare.

So good habits are to be tilled from the cradle, as a child is nothing but a bundle of mere habits. W. Kenneth Richmond articulates:

“Moral or ethical virtues is the product of ethos.”

“The human young are immature. If they are left to themselves without guidance and succor of others, they cannot even acquire the rudimentary abilities necessary for physical existence. They acquire moral attitudes and virtues from their environment in which they live. If parents are themselves honest and moral, their children will, in good time, follow the same course.”

However, it is distressing to note that many young Muslims adhere to foreign values, and corruption, bribery, dowry, nepotism and other forms of social evils have entered their daily lives. Muslim men and women also disregard Islamic requirements in dress, manners and etiquette. They, by no standard, are setting an example for the generation.

Abul Hasan Ali Nadvi, a renowned Islamic scholar, grieves:

“Muslim youth is passing through the state of bewilderment and dilemma. Guided by the press and other media, young people listen to talks and programmes which more often obliterate what traces of Islamic education and training are left in them, exposing them to intellectual vagueness and psychological frustration. The modern press, deemed respectable by the majority, provides them with inflammatory, sensational and irresponsible material. Sexy pictures and lascivious headlines, which first attract their attention, incite lust and create doubts in their minds about the norms of morality and absolute truth.”

Truly if we look into disparate Muslim societies of today, we notice that there is a clear gap between their beliefs and their outward behaviors. It is as if their faiths and their social actions were opposite poles. This is due to the weakening of traditional values.

Islam takes greater care of children and gives immense responsibility to parents who are the guardians of families. It exhorts them to pay utmost attention to the social, spiritual and moral welfare of children. The Prophet of Islam delivers:

“It is sin enough that a person will not care for those he is responsible for.”

Parents, succeeding in bringing up their children in the right way, will be promoted to the foremost ranks of the God fearing. Child rearing is true thanks giving and worship to Allah. It is not mere display of life’s fair vanities.

A Muslim is accountable for and has therefore legal obligation to be in charge of those who are under his guidance and protection. The Prophet of Islam speaks:

“Allah will ask every shepherd concerning those who are under his care whether he has looked after them or has neglected them, and He will ask this of each man about his household.”

It is high time parents realize that family remains the foundation of all sound education for the young rather than profit making school shops.

Muslim parents must ensure that those who depend upon them do not suffer at the hands of their own wrongdoings. There is a clear warning:

O believers! Save yourselves and your families from a fire whose fuel is men and stones over which are appointed stern and severe angles who flinch not (from executing) the commands they receive from Allah, but do exactly what they are commanded.” (Quran, 66:6)

The revival of true Islamic spirit within the family and making it ideal for the future in every sphere of life is the need of the hour.

Modesty and modern-day pharoahs

Say: (O Muhammad) My Lord has certainly forbidden the Fawaahish (evil and shameful deeds) whether committed openly or secretly, sins (of every type), unjustified oppression, joining partners(in worship) with Allah for which He has given no authority, and saying things about Allah of which you have no knowledge.”(Quran-ch.7; 33)

In the pre-Islamic era the Arab tribes of Makkah had deviated so far from the earlier revealed scriptures that they were performing Hajj rites naked. Their reasoning was that they could not perform sacred rites in the same clothing with which they committed sins. So Allah revealed this verse:

“O Children of Adam! Take your adornment (clean clothing) while praying…” (Quran-Ch.7;31)

Thus the above Quraanic verses 31 to 33 of chapter 7 were revealed to correct this immodest practice which was associated with the Hajj rites of worship.

Today the modern-day Firouns (Pharoahs) based in London and New York have promoted a NWO (New World Order) whereby the natural instinct of shame and modesty has become another casualty together with TRUTH. They believe they can exercise greater control over the general public if the people can be kept diverted and engrossed with pursuing their Shahawaat (base desires and passions). If the general public were allowed to focus on greater issues and more important challenges, the plans of the Financial Elite for Global Domination would fall under the scrutiny. In line with this diversion tactic, we find the educational systems generally have fallen to appalling levels in order to dumb down the population and indoctrinate us so that we become willing slaves to the false earthly gods promoting the NWO. Furthermore the mainstream Corporate Media, which serves as the main access to information, constantly mixes up Truth with Falsehood so as to confuse the public and thereby deceive them.

“ O People of the Scripture! Why do you mix up Truth with Falsehood and conceal the Truth while you know?”(Quran:Ch.3; 71)

Added to that, spectator sport is promoted as an alternative opium for a largely God-Unconscious people.

The cult-like following of sports has led to captivated audiences in stadiums which serve as substitutes for churches and mosques. Not enjoying a true abiding link with their Creator, man today has become drowned in the hedonistic culture of worshiping the Flesh.

The eye of modesty is assaulted with the proud parade of naked mothers of society while they enjoy being gazed upon by hungry wolves. The Gay parades are openly rebelling against God Almighty and demanding their rights to stoop lower than animals.

“Most certainly have We created man in the best of moulds, then we reduce him to the lowest of the low.”(Quran-Ch.95;4-5)

More recently an awareness campaign for Prostate Cancer involved thousands of men running in the streets of Johannesburg in their undies while the media covered the event with this headline: “Letting it all hang out”.

Common decency, modesty and bashfulness is an unknown word among the so-called liberated, sophisticated modern man. If man has become largely godless or unconscious of the Rights of God, then losing his/her modesty is not considered a loss. Prophet Muhammad(s.a.w.) is reported to have said:

“When your modesty(shame) departs, then (you might as well) do what you wish.”

Every vested group today demands recognition of their respective rights. Does Allah Almighty not have any rights over us? He expects us to conduct ourselves with befitting dignity and respect since He has given us the highest position among all His creation. The Glorious Quran states:

“Most certainly have We granted honor to the children of Adam.” (Quran-Ch.17-70)

Virtually theft: US and UK confiscation schemes

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.

New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19^th:

The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

Can They Do That?

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.

No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only  mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.

An Imminent Risk

If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.  That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives.  She writes:

In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember,depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.

One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes:

Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011.

Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:

. . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . .

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

$75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivative search than the entire global GDP (at $70 trillion). The “notional value” of derivatives is not the same as cash at risk, but according to a cross-post on Smith’s site:

By at least one estimate, in 2010 there was a total of $12 trillion in cash tied up (at risk) in derivatives . . . .

$12 trillion is close to the US GDP.  Smith goes on:

. . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors.

Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities. And in the Eurozone, while the European Stability Mechanism committed Eurozone countries to bail out failed banks, they are apparently having second thoughts there as well. On March 25^th, Dutch Finance Minister Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, told reporters that it would be the template for any future bank bailouts, and that “the aim is for the ESM never to have to be used.”

That explains the need for the FDIC-BOE resolution. If the anticipated enabling legislation is passed, the FDIC will no longer need to protect depositor funds; it can just confiscate them.

Worse Than a Tax

An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft.

What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture.  Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.

The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts.  They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.

Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank.  Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.

The Swedish Alternative: Nationalize the Banks

Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:

It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.

On whether depositors could indeed be forced to become equity holders, Salmon commented:

It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.

President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”

But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.

Egypt: in love with religion despite secularists

There would be no exaggeration when we say that Egyptians do love religion and consider it part and parcel of their daily lives and they wouldn’t settle for pushing religion to the sideline as they want religion to be upfront and center. This kind of gentle integration of religion in the fabric of the Egyptian society stirred the furry of many secularists and led them to seek answers for the dominion of religion and resort it back sometimes to the authority of the religious clergies and other times to the effect of the religious institutions. But most of the time they would play with the card of theocracy and the establishment of a religious state.

The Egyptian experience which started with Muhammad Ali Pasha did not give the religious institutions any power to meddle or interfere in the political or economic affairs and decisions. At the same time, the state did not totally ignore or banish the role of the religious institutions as this fact is obvious in many countries across the globe. Fore example, the Anglican Church continues to crown the British queen till our present time and the Catholic institution in France still enjoys major popularity among the masses although the French constitution states that France is a secular state.

In the West religion was pushed to the sideline only when the society found that religion was no longer a reason for social security and stability but rather became a reason for futile tensions among different religious cults. The situation in Egypt is very different; a fact which gave room to some ill hearts to incite tensions among different Islamic sects as a justification for driving religion out of the picture and push it to the side, thinking that this will lead the society to new breakthroughs in economy, production and scientific research; a fact which would lead man- in their opinion- to enjoy more free and luxurious life.

The secularists aim at limiting religion to the private life of the individual as it should not play any role in the public life. In other words, they ask people neither to advocate nor to live with religion which is something that is totally rejected by the Egyptian society as it goes against their cultural heritage and religious identity.

For my part I give my heartfelt advice to the personalities who appear on different media outlets not to become a gear in this mechanism which aims at destroying religion and making it fade away in the hearts of Muslims. Their plan is carried out through different techniques such as:

Seeking to point out differences among different legal schools of Jurisprudence in an absurd way and this attempt is not only restricted to stating differences between the Sunni and Shi’tes legal schools or between textual scripture and its interpretation but the differences were extended to include the four Sunni legal schools of jurisprudence and sometimes differences in the single juristic school is absurdly pointed out.

Persistence on taking the opinions of self claimed scholars who are adamant on issuing uneducated fatwas and unsolicited religious opinions.

Moving from the world of thoughts in which everybody is allowed to have his own shares of thoughts which shows the significance of the value of freedom of thought; but moving this right to the world of jurisprudence -which is a realm of science that has its own methodology, maxims and rulings and should only be tackled by specialized scholars- leads to this messy state which we live in today. Mixing between these two worlds leads some people to ban the freedom of thought in an attempt to prevent non specialists from delving into scholarly and juristic issues whereas other people would advocate for freedom of thought in all realms including that of jurisprudence which leads to uneducated opinions and false religious edicts.

Disseminating mythical and legendary mentality which is something that goes against what secularism advocates for but nonetheless it is a temporary means to force people to give up on religion altogether through mixing between the unseen and the metaphysical with its creedal and faith based understanding and between oracles and crystal balls which turns religion to some sort of witch craft.

Things get even more complicated when the mythical mentality finds its way from religion to medicine. The catastrophic effect of this transfer leads to calling people to abandon medicine and be sufficed with reciting Quranic verses and supplications for healing.

The ultimate aim of these deceiving techniques is to push religion to the sideline and force Egyptians to live without it. Those who advocate for such ending forgot that Egyptians enjoy both intelligence and transparency so they would look at these attempts with a smirk as these calls underestimate the deep roots of the Egyptian religious identity which developed since the dawn of history and was an integrated element in the fabric of the Egyptian civilization.