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Thursday, October 16, 2008

Guess who didn't lose money when the banks crashed

YNet reports that leading terror organizations like al-Qaeda are among the very few investors who have not been hurt by the massive drop in stock values over the last several weeks. That's because they don't keep their money in banks anymore due to sanctions imposed by the West. But there's a silver lining in that cloud: While the terrorists aren't losing their money, they can't move it very efficiently either.
One principal reason the groups may avoid fallout now is because they've been forced to pull away from banks, relying instead on less-efficient ways to move money.

Those methods - including hand-carrying money and using informal money-transfer networks called hawalas - likely will shield extremists from the current banking system turmoil.

But the methods also are slower and less efficient ways to move money - and thus could hamper efforts to finance attacks, analysts say.

"It would be inconceivable that large amounts of (terror-linked) money would transit through the formal financial system, because of all the controls," said Ibrahim Warde, an expert on terrorist financing at The Fletcher School at Tufts University.
Terrorists are primarily funded by oil money (principally Saudi and Iranian) and by the drug trade in Afghanistan. Are they losing money because of the drop in oil prices? Maybe. But the price of oil is still higher than it was in January 2007. So while the boom in terror funding may be over, they're not losing money by any stretch.


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