Tuesday, November 11, 2008

Your $3 trillion bailout

Washington is waging war on the financial crisis. Mr. Obama: You have to see it through.

By David Goldman, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Congratulations Mr. President-elect. Now get to work. It's a little more than 10 weeks until Jan. 20, and there's an economy in dire need of fixing.

Here's the executive summary: The economy's cracks started showing a year ago. Home prices plummeted and foreclosures soared. Financial institutions carrying mortgage-backed securities on their books took an enormous hit. Banks wanted to take fewer risks, so lending to businesses and consumers froze up.

Then things really broke down in September. The government took over mortgage giants Fannie Mae and Freddie Mac. The collapse of Lehman Brothers sent investors worldwide into a cold sweat.

To combat the crisis, Congress and the current administration have taken a number of steps aimed at boosting the housing market - providing critical liquidity to financial institutions and saving businesses from collapse.

Thus far, the government has pledged as much as $3 trillion for the crisis, although the ultimate cost to the federal budget won't be known for years to come since much of that money is effectively investment.

"You'd have to go back to the New Deal to find something similar to what the government has done to stop the credit crisis," said Jay Bryson, economist for Wachovia. "It's because the alternative was unthinkable: If it failed, there was potential for another Great Depression."

So, Mr. President-elect, we thought it might be helpful for you to have a primer on the actions your government has taken so far. Of course, you have plenty of smart advisers who could have done this for you. But we wanted to make sure you hit the ground running. We counted 16 separate categories of actions.

Consumers and their homes

Stimulus: In May, stimulus checks worth up to $600 for individuals and $1,200 for couples made their way to about 140 million American tax filers, costing the Treasury $100 billion for individuals and $68 billion in tax breaks to businesses. In separate legislation, Congress increased unemployment benefits to 39 weeks from 26 weeks, costing $8 billion, and gave $4 billion to states and municipalities to buy up and rehabilitate foreclosed properties.

Stimulus resulted in a sizeable increase in consumer spending in May and June, helping the economy grow 2.8% in the second quarter. But the boost didn't last long, and early government reports show the economy shrank from July through September. Support for a second stimulus package is mounting.

Fannie Mae and Freddie Mac: In early September, Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) were on the brink of failure, having racked up nearly $12 billion in losses from declining home prices, mortgage delinquencies and foreclosures.

Federal officials assumed control of the firms and the $5 trillion in home loans they back. The Treasury put up as much as $200 billion to bail them out and placed them in a temporary "conservatorship" overseen by the Federal Housing Finance Agency.

Housing benefits: With foreclosures soaring, lawmakers in July passed legislation that insured up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers. In turn, lenders had to reduce the loan balances. The bill also included $16 billion in tax credits for first-time home buyers worth up to $7,500. The law put stronger regulation on Fannie and Freddie, and increased the cap on the size of mortgages guaranteed by the firms to $625,000 from $417,000.

In September, the government allowed the Treasury to buy up mortgages and mortgage-backed securities, so it can try to restructure the loans. The Treasury said it hopes to prevent foreclosures by reducing loans' principals or interest rates.

Money-market guarantees: When the credit crisis hit full tilt in September, investors fled money-market funds - long considered the safest investments - and the funds began to buckle. Days later, the Treasury said it would insure up to $50 billion in money-market fund investments for a year.

The Fed began to lend an unlimited amount of money to banks to finance their purchases of certain corporate debt from money-market funds. The Fed then agreed to purchase up to $69 billion in short-term debt from key money-market investments. Then, in October, the Fed said it would loan up to $600 billion directly to money-market funds through a Money Market Investor Funding Facility to keep the funds afloat.

Student loan guarantees: As a result of reduced subsidies and lower rates from the government, as well as higher borrowing costs due to the credit crisis, student loans became unprofitable for a number of lenders in the spring. Scores of lenders stopped issuing the loans, causing a student loan crisis.

In May, Congress passed legislation that gave the secretary of education authority to purchase loans from private lenders to boost liquidity in the market, and has thus far purchased over $9 billion of the loans. The Fed also started accepting student loan-backed securities as collateral for loans.

Deposit insurance: As part of the financial rescue plan passed in September, The FDIC increased its insurance protection on interest-bearing accounts to $250,000 from $100,000. The temporary limit increase will last through the end of 2009.

In an unprecedented move, the FDIC also said it will guarantee newly issued unsecured debt for banks through the end of January, and it removed caps on insurance for non-interest bearing accounts, which many small businesses use to make short-term deposits.

Banks and Wall Street

Cash injections: With financial institutions desperate for liquidity, the Treasury has sent out about $250 billion worth of checks to banks. In turn, the government will get an equity stake in the banks in the form of senior preferred shares.

Regulators hope that the capital injections will spur lenders to dole out loans to consumers and businesses in need of credit. But some of the biggest, most stable banks got the biggest checks. For instance, JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Wells Fargo (WFC, Fortune 500) led the pack with $25 billion in federal funding. Smaller banks are getting far less, and,some banks are using their loans to purchase smaller banks.

Mortgage-backed securities purchases: When the government's rescue plan was first proposed, the major initiative was the purchase of troubled assets from banks. In the wake of the housing crisis, assets backed by mortgages have plummeted in value, making lenders hesitant to lend to companies with "toxic" assets on their balance sheets.

But, following Britain's lead, the Treasury instead focused on cash injections. The Treasury has more than $450 billion left to invest with or buy up troubled assets, and it may use some of the remaining money for that program.

Bear Stearns: When struggling Wall Street investment bank Bear Stearns was on the brink of collapse in March, the Federal Reserve orchestrated an 11th-hour deal that allowed JP Morgan to scoop up the company.

The Federal Reserve agreed to guarantee $29 billion's worth of potential losses on Bear's portfolio through a lending facility. The government decided to step in to stop Bear's collapse because it feared the rest of Wall Street would face a severe negative impact.

Rate cuts: Beginning in September 2007, the Federal Reserve began steadily trimming interest rates from 5.25% to 1%, matching the lowest for the overnight bank lending rate ever. The fed funds rate is used to set rates for a wide variety of consumer loans, including home equity lines and credit cards, as well as for many business loans.

By lowering its rate, the Fed said it hopes to encourage lending, easing the recent stranglehold on credit. Though rate cuts tend to be inflationary, Fed Chairman Ben Bernanke said the threat of inflation is minimal now due to the stagnant economy.

Term-auction facility: Since December, the Fed has auctioned off $1.4 trillion in its term auction facility, which accepts financial instruments such as mortgage-backed securities as collateral for lending. The Fed began offering $20 billion per bimonthly auction and has since increased that limit to $300 billion.

Holding droves of hard-to-value assets like mortgage-backed securities, financial institutions have found few lenders other than the federal government, because the unattractive assets on banks' balance sheets raise questions about their overall financial stability.

Discount window: For a long while before the credit crunch, the Fed has offered overnight funding for commercial banks at a rate slightly higher than its targeted funds rate. But after the collapse of Bear Stearns, the Fed for the first time opened its discount window to Wall Street firms like Goldman Sachs and Morgan Stanley, which were in dire need of lending. The discount window has been widely used, as funding needs for commercial banks continue to rise.

Last week, banks borrowed a record $112 billion from the Fed through the discount window. But in an encouraging sign, investment banks have borrowed much less for two straight weeks.

Dollar swap lines: The credit crunch left many banks around the world hoarding dollars to shore up their balance sheets. With dollars -- the "world's currency" -- in demand, the Fed began in December to provide dollars to other central banks through a swap facility. Foreign central banks then lent those dollars to banks in their countries.

What started as a $24 billion cap on swaps with the European Central Bank and the Swiss National Bank ballooned to $620 billion to nine central banks in early October. In mid-October, the total rose to 13 central banks, and the Fed made the unprecedented decision to lend as many dollars as the banks needed.

Bank takeovers: The Federal Deposit Insurance Corp. recently said 117 banks were on its so-called "troubled" list -- a 5-year high -- but there have been just 17 bank failures in 2008.

The FDIC, which insures certain deposits, came out relatively unscathed, as 16 of those banks were acquired by other banks willing to assume their deposits and assets. Even Washington Mutual - by far the largest failed bank in history - was acquired by JP Morgan Chase. Just IndyMac failed without a buyer. The total cost to the government is not yet known, but IndyMac had $32 billion in assets and around $19 billion in FDIC-insured deposits at the time of failure.

Corporate America

AIG: American International Group (AIG, Fortune 500), the world's largest insurer with $1.1 trillion in assets and 74 million clients, said in mid-September that it could not raise sufficient capital to stay afloat. The government offered an $85 billion loan to the company, and in subsequent weeks the Fed offered another $37.8 billion.

The insurer has already borrowed more than two-thirds of its allotment. Though it is paying back the original $85 billion at a high rate -- currently more than 11%, the company recently announced that it paid back $20.9 billion of its debt using the Fed's low-interest commercial paper facility -- with rates at less than 4%.

Automakers: With fuel prices soaring to record highs earlier in the year, lawmakers gave $25 billion in low-interest loans to the struggling auto industry to speed its transition to more fuel-efficient vehicles. Sales at General Motors Corp. (GM, Fortune 500), Ford Motor Co. (F, Fortune 500) and Chrysler are down 20% this year.

About 2 million industry jobs are at stake, and tens of billions of dollars in automakers' debt are held by Wall Street firms and banks. GM and Chrysler said a merger between the two companies could help them stay afloat, but the Treasury told the companies in October they'd have to wait until after the election to be considered for funding.

Commercial paper facility: Since Lehman's collapse the market for commercial paper dried up. Big businesses and financial institutions sell the critical short-term debt to finance day-to-day business operations, but they were finding no buyers.

Beginning in late October, the Fed began buying droves of corporate debt through its so-called Commercial Paper Funding Facility. So far, the central bank has purchased $143.9 billion in paper. The Fed's actions have been criticized by some analysts who believe the facility doesn't address the sellers of lower quality paper, who have suffered the most since the credit crisis put a stranglehold on lending.

Did you vote for Obama? How do you think the new president will affect your wallet? What do you think Obama needs to do to fix the economy - both in the short run and the long term? What should be first on the new Congress's agenda? E-mail us your thoughts, including your name, photo and contact info; the best answers will be featured in an upcoming CNNMoney.com article. To top of page

Circuit City to stay open in bankruptcy

Beleaguered No. 2 electronics retailer urges budget-conscious consumers not to shun its stores for holiday gifts.

By Parija B. Kavilanz, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Circuit City Stores Inc., the No. 2 electronics seller after Best Buy, filed for bankruptcy protection Monday, hoping the move will allow it to stock its shelves in time for the crucial holiday shopping season.

The move comes about a week after Circuit City said it would close 155 stores as it deals with a worsening economic downturn that has left more consumers with less money to shop. The company intends to keep its remaining stores open through the bankruptcy procedings.

Circuit City (CC, Fortune 500) said consumers should continue to shop at its stores.

"Chapter 11 is not a closing or liquidation," the company said in an e-mail to CNNMoney.com. "We remain committed to doing a better job of taking care of our guests, and making it easier to shop at Circuit City."

For anyone that's on the hunt for a sweet deal on a flatscreen TV, Circuit City spokesman Jim Babb said it's "safe to assume" that consumers can expect deep discounts on TVs and other products in those Circuit City stores that are being liquidated.

In the rest of its stores, Babb said the company's prices will remain competitive with the market over the coming weeks.

Circuit City said it is seeking approval from the bankruptcy court to honor customer programs such as returns, exchanges and gift cards. "Approval of such programs normally is granted," the company said in the e-mail.

The electronics seller said it will still accept credit cards, including Circuit City-branded credit cards, which the company said are not impacted by its bankruptcy.

Circuit City also said it will continue to honor its warranty plans, including its Circuit City Advantage Protection Plans.

Despite these measures, one industry watcher remained unconvinced that Circuit City could still attract shoppers from here on and especially through the holiday season.

"Consumers will be skeptical about buying a $1,000 or $2,000 flatscreen TV with a warranty at Circuit City," said Craig Johnson, retail analyst and president of Customer Growth Partners. "In their mind, there's no guarantee that the company will still be around in the future."

"Regarding gift cards, if you are buying a $50 gift card for Christmas, where would your comfort level be higher? At a Circuit City or a Best Buy (BBY, Fortune 500)?" Johnson said.

The company's bankruptcy filing was also made at a crucial time of the year for merchants who are preparing for the year-end holiday shopping season.

The November-December period can account for 50% or more of retailers' annual profits and sales. But this year, many Americans have clamped down on their shopping habits amid a weak economy and a shaky job and credit market.

Industry analysts warn that retailers will have to do whatever they can this year if they hope to have at least decent holiday sales.

Will stay in business for now

According to the company's Chapter 11 filing with the U.S. bankruptcy court in Richmond, Va., Circuit City has 566 operating stores in the United States and will continue to do business and pay its workers while it restructures debt and its business operations.

In announcing the store closings last week, Richmond-based Circuit City said it would cut about 17% of its 40,000 domestic workers.

Johnson said Circuit City's problems are partly its own making. On the external front, the retailer's competitive landscape has became much more formidable as Best Buy continues to enhance its product offerings and service.

Circuit City has also felt the squeeze from discounters like Wal-Mart (WMT, Fortune 500) who has aggressively expanded into electronics over the last few years.

More importantly, Johnson believes Circuit City shot itself in the foot when the company decided last year to fire more than 3,000 of its highest-paid sales staff and replace them with lower-paid workers.

"This was a huge strategic blunder," said Johnson. "People want a knowledgeable sales person when they are spending $2,000 on a TV. They don't want to buy it from some kid at Wal-Mart," he said

The company said it has negotiated a commitment for a $1.1 billion credit line to supplement its working capital. The company said the credit line will replace the company's $1.3 billion asset-based line provided by its lenders.

Circuit City said the credit line will give it immediate liquidity while it works to reorganize the business and enable it to pay its vendors and employees.

"We recently have taken intensive measures to overcome our deteriorating liquidity position," James Marcum, Circuit City's acting president and chief executive officer, said in a statement.

"The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively," he said. To top of page

The Sayings of the Four Imams on Taqlid

Author: Imam al-Albani
Source: The Prophet's Prayer Described
Article ID : MNJ060002


Abu Haneefah (rahimahullaah) the first of them is Abu Haneefah Nu'maan ibn Thaabit, whose companions have narrated from him various sayings and diverse warnings, all of them leading to one thing: the obligation to accept the Hadeeth, and to give up following the opinions of the imaams which contradict it:

1. "When a hadeeth is found to be saheeh, then that is my madhhab."[20]

2. "It is not permitted[21] for anyone to accept our views if they do not know from where we got them."[22]

In one narration, "It is prohibited[23] for someone who does not know my evidence to give verdicts[24] on the basis of my words."

Another narration adds, "... for we are mortals: we say one thing one day, and take it back the next day."

In another narration, "Woe to you, O Ya'qub[25]! Do not write down everything you hear from me, for it happens that I hold one opinion today and reject it tomorrow, or hold one opinion tomorrow and reject it the day after tomorrow."[26]

3. "When I say something contradicting the Book of Allaah the Exalted or what is narrated from the Messenger (sallallaahu `alaihi wa sallam), then ignore my saying."[27]

Maalik ibn Anas (rahimahullaah)

As for Imaam Maalik ibn Anas, he said:

1. "Truly I am only a mortal: I make mistakes (sometimes) and I am correct (sometimes). Therefore, look into my opinions: all that agrees with the Book and the Sunnah, accept it; and all that does not agree with the Book and the Sunnah, ignore it."[28]

2. "Everyone after the Prophet (sallallaahu `alaihi wa sallam) will have his sayings accepted and rejected - not so the Prophet (sallallaahu `alaihi wa sallam)."[29]

3. Ibn Wahb said: "I heard Maalik being asked about cleaning between the toes during ablution. He said, `The people do not have to do that.' I did not approach him until the crowd had lessened, when I said to him, `We know of a sunnah about that.' He said, `What is that ?' I said, `Laith ibn Sa'd, Ibn Lahee'ah and `Amr ibn al-Haarith narrated to us from Yazeed ibn `Amr al-Ma'aafiri from Abu `Abdur-Rahman al-Hubuli from Mustawrid ibn Shaddaad al-Qurashi who said, `I saw the Messenger of Allaah (sallallaahu `alaihi wa sallam) rubbing between his toes with his little finger.' He said, `This hadeeth is sound; I had not heard of it at all until now.' Afterwards, I heard him being asked about the same thing, on which he ordered cleaning between the toes."[30]

Shaafi'i (rahimahullaah)

As for Imaam Shaafi'i, the quotations from him are most numerous and beautiful[31], and his followers were the best in sticking to them:

1. "The sunnahs of the Messenger of Allaah (sallallaahu `alaihi wa sallam) reach, as well as escape from, every one of us. So whenever I voice my opinion, or formulate a principle, where something contrary to my view exists on the authority of the Messenger of Allaah (sallallaahu `alaihi wa sallam), then the correct view is what the Messenger of Allaah (sallallaahu `alaihi wa sallam) has said, and it is my view."[32]

2. "The Muslims are unanimously agreed that if a sunnah of the Messenger of Allaah (sallallaahu `alaihi wa sallam) is made clear to someone, it is not permitted[33] for him to leave it for the saying of anyone else."[34]

3. "If you find in my writings something different to the Sunnah of the Messenger of Allaah (sallallaahu `alaihi wa sallam), then speak on the basis of the Sunnah of the Messenger of Allaah (sallallaahu `alaihi wa sallam), and leave what I have said."

In one narration: "... then follow it (the Sunnah), and do not look sideways at anyone else's saying."[35]

4. "When a hadeeth is found to be saheeh, then that is my madhhab."[36]

5. "You[37] are more knowledgeable about Hadeeth than I, so when a hadeeth is saheeh, inform me of it, whether it is from Kufah, Basrah or Syria, so that I may take the view of the hadeeth, as long as it is saheeh."[38]

6. "In every issue where the people of narration find a report from the Messenger of Allaah (sallallaahu `alaihi wa sallam) to be saheeh which is contrary to what I have said, then I take my saying back, whether during my life or after my death."[39]

7. "If you see me saying something, and contrary to it is authentically-reported from the Prophet (sallallaahu `alaihi wa sallam), then know that my intelligence has departed."[40]

8. "For everything I say, if there is something authentic from the Prophet (sallallaahu `alaihi wa sallam) contrary to my saying, then the hadeeth of the Prophet (sallallaahu `alaihi wa sallam) comes first, so do not follow my opinion."[41]

9. "Every statement on the authority of the Prophet (sallallaahu `alaihi wa sallam) is also my view, even if you do not hear it from me."[42]

Ahmad ibn Hanbal (rahimahullaah)

Imaam Ahmad was the foremost among the Imaams in collecting the Sunnah and sticking to it, so much so that he even "disliked that a book consisting of deductions and opinions be written."[43] Because of this he said:

1. "Do not follow my opinion; neither follow the opinion of Maalik, nor Shaafi'i, nor Awzaa'i, nor Thawri, but take from where they took."[44]

In one narration: "Do not copy your Deen from anyone of these, but whatever comes from the Prophet (sallallaahu `alaihi wa sallam) and his Companions, take it; next are their Successors, where a man has a choice."

Once he said: "Following[45] means that a man follows what comes from the Prophet (sallallaahu `alaihi wa sallam) and his Companions; after the Successors, he has a choice."[46]

2. "The opinion of Awzaa'i, the opinion of Maalik, the opinion of Abu Haneefah: all of it is opinion, and it is all equal in my eyes. However, the proof is in the narrations (from the Prophet (sallallaahu `alaihi wa sallam) and his Companions)."[47]

3. "Whoever rejects a statement of the Messenger of Allaah (sallallaahu `alaihi wa sallam) is on the brink of destruction."[48]


20 Ibn `Aabideen in al-Haashiyah (1/63), and in his essay Rasm al-Mufti (1/4 from the Compilation of the Essays of Ibn `Aabideen), Shaikh Saalih al-Fulaani in Eeqaaz al-Himam (p. 62) & others. Ibn `Aabideen quoted from Sharh al-Hidaayah by Ibn al-Shahnah al-Kabeer, the teacher of Ibn al-Humaam, as follows:

"When a hadeeth contrary to the Madhhab is found to be saheeh, one should act on the hadeeth, and make that his madhhab. Acting on the hadeeth will not invalidate the follower's being a Hanafi, for it is authentically reported that Abu Haneefah said, `When a hadeeth is found to be saheeh, then that is my madhhab', and this has been related by Imaam Ibn `Abdul Barr from Abu Haneefah and from other imaams."

This is part of the completeness of the knowledge and piety of the Imaams, for they indicated by saying this that they were not versed in the whole of the Sunnah, and Imaam Shaafi'i has elucidated this thoroughly (see later). It would happen that they would contradict a sunnah because they were unaware of it, so they commanded us to stick to the Sunnah and regard it as part of their Madhhab. May Allaah shower His mercy on them all.

21Ar.: halaal

22 Ibn `Abdul Barr in Al-Intiqaa' fi Fadaa'il ath-Thalaathah al- A'immah al-Fuqahaa' (p. 145), Ibn al-Qayyim in I'laam al- Mooqi'een (2/309), Ibn `Aabideen in his Footnotes on Al-Bahr ar-Raa'iq (6/293) and in Rasm al-Mufti (pp. 29,32) & Sha'raani in Al-Meezaan (1/55) with the second narration. The last narration was collected by `Abbaas ad-Dawri in At- Taareekh by Ibn Ma'een (6/77/1) with a saheeh sanad on the authority of Zafar, the student of Imaam Abu Haneefah. Similar narrations exist on the authority of Abu Haneefah's companions Zafar, Abu Yoosuf and `Aafiyah ibn Yazeed; cf. Eeqaaz (p. 52). Ibn al-Qayyim firmly certified its authenticity on the authority of Abu Yoosuf in I'laam al-Mooqi'een (2/344). The addition to the second narration is referenced by the editor of Eeqaaz (p. 65) to Ibn `Abdul Barr, Ibn al-Qayyim and others.

If this is what they say of someone who does not know their evidence, what would be their response to one who knows that the evidence contradicts their saying, but still gives verdicts opposed to the evidence?! Therefore, reflect on this saying, for it alone is enough to smash blind following of opinion; that is why one of the muqallid shaikhs, when I criticised his giving a verdict using Abu Haneefah's words without knowing the evidence, refused to believe that it was a saying of Abu Haneefah!

23 Ar.:haraam

24 Ar.: fatwaa

25 i.e. Imaam Abu Haneefah's illustrious student, Abu Yoosuf (rahimahullaah). 26 This was because the Imaam would often base his view on Qiyaas (Analogy), after which a more potent analogy would occur to him, or a hadeeth of the Prophet (sallallaahu `alaihi wa sallam) would reach him, so he would accept that and ignore his previous view. Sha'raani's words in Al-Meezaan (1/62) are summarised as:

"Our belief, as well as that of every researcher into Imaam Abu Haneefah (radi Allaahu `anhu), is that, had he lived until the recording of the Sharee'ah, and the journeys of the Preservers of Hadeeth to the various cities and frontiers in order to collect and acquire it, he would have accepted it and ignored all the analogies he had employed. The amount of qiyaas in his Madhhab would have been just as little as that in other Madhhabs, but since the evidences of the Sharee'ah had been scattered with the Successors and their successors, and had not been collected in his lifetime, it was necessary that there be a lot of qiyaas in his Madhhab compared to that of other imaams. The later scholars then made their journeys to find and collect ahaadeeth from the various cities and towns and wrote them down; hence, some ahaadeeth of the Sharee'ah explained others. This is the reason behind the large amount of qiyaas in his Madhhab, whereas there was little of it in other Madhhabs."

Abul-Hasanaat Al-Lucknowi quoted his words in full in An- Naafi' al-Kabeer (p. 135), endorsing and expanding on it in his footnotes, so whoever wishes to consult it should do so there.

Since this is the justification for why Abu Haneefah has sometimes unintentionally contradicted the authentic ahaadeeth - and it is a perfectly acceptable reason, for Allaah does not burden a soul with more than it can bear - it is not permissible to insult him for it, as some ignorant people have done. In fact, it is obligatory to respect him, for he is one of the imaams of the Muslims through whom this Deen has been preserved and handed down to us, in all its branches; also, for he is rewarded under any circumstance: whether he is correct or wrong. Nor is it permissible for his devotees to continue sticking to those of his statements which contradict the authentic ahaadeeth, for those statements are effectively not part of his Madhhab, as the above sayings show. Hence, these are two extremes, and the truth lies in between. "Our Lord! Forgive us, and our brethren who came before us into the Faith; and leave not, in our hearts, any rancour against those who have believed. Our Lord! You are indeed Full of Kindness, Most Merciful." (Al-Hashr 59:10)

27 Al-Fulaani in Eeqaaz al-Himam (p. 50), tracing it to Imaam Muhammad and then saying, "This does not apply to the mujtahid, for he is not bound to their views anyway, but it applies to the muqallid."

Sha'raani expanded on that in Al-Meezaan (1/26):

"If it is said: `What should I do with the ahaadeeth which my Imaam did not use, and which were found to be authentic after his death?' The answer which is fitting for you is: `That you act on them, for had your Imaam come across them and found them to be authentic, he would have instructed you to act on them, because all the Imaams were captives in the hand of the Sharee'ah.' He who does so will have gathered all the good with both his hands, but he who says, `I will not act according to a hadeeth unless my Imaam did so', he will miss a great amount of benefit, as is the case with many followers of the Imaams of the Madhhabs. It would be better for them to act on every hadeeth found to be authentic after the Imaam's time, hence implementing the will of the Imaams; for it is our firm belief about the Imaams that had they lived longer and come to know of those ahaadeeth which were found authentic after their time, they would have definitely accepted and acted according to them, ignoring any analogies they may have previously made, and any views they may have previously held."

28 Ibn `Abdul Barr in Jaami' Bayaan al-'Ilm (2/32), Ibn Hazm, quoting from the former in Usool al-Ahkaam (6/149), & similarly Al-Fulaani (p. 72)

29 This iswell known among the later scholars to be a saying of Maalik. Ibn `Abdul Haadi declared it saheeh in Irshaad as- Saalik (227/1); Ibn `Abdul Barr in Jaami' Bayaan al-'Ilm (2/91) & Ibn Hazm in Usool al-Ahkaam (6/145, 179) had narrated it as a saying of Al-Hakam ibn `Utaibah and Mujaahid; Taqi ad- Deen as-Subki gave it, delighted with its beauty, in al- Fataawaa (1/148) as a saying of Ibn `Abbaas, and then said: "These words were originally those of Ibn `Abbaas and Mujaahid, from whom Maalik (radi Allaahu `anhu) took them, and he became famous for them." It seems that Imaam Ahmad then took this saying from them, as Abu Daawood has said in Masaa'il of Imaam Ahmad (p. 276): "I heard Ahmad say, `Everyone is accepted and rejected in his opinions, with the exception of the Prophet (sallallaahu `alaihi wa sallam)'."

30 From the Introduction to Al-Jarh wat-Ta'deel of Ibn Abi Haatim, pp. 31-2.

31 Ibn Hazm says in Usool al-Ahkaam (6/118):

"Indeed, all the fuqahaa' whose opinions are followed were opposed to taqleed, and they forbade their companions from following their opinion blindly. The sternest among them in this regard was Shaafi'i (rahimahullaah), for he repeatedly emphasised, more than anyone else, following the authentic narrations and accepting whatever the proof dictated; he also made himself innocent of being followed totally, and announced this to those around him. May this benefit him in front of Allaah, and may his reward be of the highest, for he was the cause of great good."

32 Related by Haakim with a continuous sanad up to Shaafi'i, as in Taareekh Dimashq of Ibn `Asaakir (15/1/3), I'laam al- Mooqi'een (2/363, 364) & Eeqaaz (p. 100).

33 Ar.: halaal

34 Ibn al-Qayyim (2/361) & Fulaani (p. 68) 35 Harawi in Dhamm al-Kalaam (3/47/1), Khateeb in Al-Ihtijaaj bi ash-Shaafi'i (8/2), Ibn `Asaakir (15/9/10), Nawawi in Al- Majmoo' (1/63), Ibn al-Qayyim (2/361) & Fulaani (p. 100); the second narration is from Hilyah al-Awliyaa' of Abu Nu'aim. 36 Nawawi in Al-Majmoo' (1/63), Sha'raani (1/57), giving its sources as Haakim and Baihaqi, & Fulaani (p. 107). Sha'raani said, "Ibn Hazm said, `That is, ... found to be saheeh by him or by any other Imaam'." His saying given next confirms this understanding.

Nawawi says: "Our companions acted according to this in the matter of tathweeb (calling to prayer in addition to the adhaan), the conditions on coming out of ihraam due to illness, and other issues well-known in the books of the Madhhab. Among those of our companions who are reported to have passed judgment on the basis of the hadeeth (i.e. rather than the saying of Shaafi'i) are Abu Ya'qoob al-Buweeti and Abu l-Qaasim ad-Daariki. Of our companions from the muhadditheen, Imaam Abu Bakr Al-Baihaqi and others employed this approach. Many of our earliest companions, if they faced an issue for which there was a hadeeth, and the madhhab of Shaafi'i was contrary to it, would act according to the hadeeth and give verdicts based on it, saying, `The madhhab of Shaafi'i is whatever agrees with the hadeeth.' Shaikh Abu `Amr (Ibn as-Salaah) says, `Whoever among the Shaafi'is found a hadeeth contradicting his Madhhab, he would consider whether he fulfilled the conditions of ijtihaad generally, or in that particular topic or issue, in which case he would be free to act on the hadeeth; if not, but nevertheless he found it hard to contradict the hadeeth after further analysis, he would not be able to find a convincing justification for opposing the hadeeth. Hence, it would be left for him to act according to the hadeeth if an independent imaam other than Shaafi'i had acted on it, and this would be justification for his leaving the Madhhab of his Imaam in that issue.' What he (Abu `Amr) has said is correct and established. Allaah knows best."

There is another possibility which Ibn as-Salaah forgot to mention: what would one do if he did not find anyone else who acted according to the hadeeth? This has been answered by Taqi ad-Deen as-Subki in his article, The Meaning of Shaafi'i's saying, "When a hadeeth is found to be saheeh, then that is my madhhab" (p. 102, vol. 3): "For me, the best thing is to follow the hadeeth. A person should imagine himself in front of the Prophet (sallallaahu `alaihi wa sallam), just having heard it from him: would there be leeway for him to delay acting on it? No, by Allaah ... and everyone bears a responsibility according to his understanding."

The rest of this discussion is given and analysed in I'laam al- Muwaqqi'een (2/302, 370) and in the book of al-Fulaane, (full title:) Eeqaaz Himam ulu l-Absaar, lil-Iqtidaa' bi Sayyid al- Muhaajireen wal-Ansaar, wa Tahdheeruhum `an al-Ibtidaa' ash- Shaa'i' fi l-Quraa wal-Amsaar, min Taqleed al-Madhaahib ma'a l- Hamiyyah wal-'Asabiyyah bain al-Fuqahaa' al-A'saar (Awakening the Minds of those who have Perception, towards following the Leader of the Emigrants and Helpers, and Warning them against the Innovation Widespread among Contemporary Jurists in the Towns and Cities, of following Madhhabs with Zeal and Party- Spirit). The latter is a unique book in its field, which every desirer of truth should study with understanding and reflection. 37 addressing Imaam Ahmad ibn Hanbal (rahimahullaah).

38 Related by Ibn Abi Haatim in Aadaab ash-Shaafi'i (pp. 94-5), Abu Nu'aim in Hulyah al-Awliyaa' (9/106), al-Khateeb in Al- Ihtijaaj bish-Shaafi'i (8/1), and from him Ibn `Asaakir (15/9/1), Ibn `Abdul Barr in al-Intiqaa' (p. 75), Ibn al-Jawzi in Manaaqib al-Imaam Ahmad (p. 499) & Harawi (2/47/2) with three routes from `Abdullaah ibn Ahmad ibn Hanbal from his father that Shaafi'i said to him: ...etc; thus, it is authentic on the authority of Shaafi'i. This is why Ibn al- Qayyim attributed it definitely to him in I'laam (2/325), as did Fulaani in Eeqaaz (p. 152) and then said: "Baihaqi said, `This is why he - i.e. Shaafi'i - used hadeeth so much, because he gathered knowledge from the people of Hijaaz, Syria, Yemen and `Iraq, and so accepted all that he found to be authentic, without leaning towards or looking at what he had considered out of the Madhhab of the people of his land when the truth was clear to him elsewhere. Some of those before him would limit themselves to what they found in the Madhhab of the people of their land, without attempting to ascertain the authenticity of what opposed it. May Allaah forgive all of us'."

39 Abu Nu'aim (9/107), Harawi (47/1), Ibn al-Qayyim in I'laam al-Muwaqqi'een (2/363) & Fulaani (p. 104).

40 Ibn Abi Haatim in al-Aadaab (p. 93), Abul Qaasim Samarqandi in al-Amaali, as in the selection from it by Abu Hafs al- Mu'addab (234/1), Abu Nu'aim (9/106) & Ibn `Asaakir (15/10/1) with a saheeh sanad.

41 Ibn Abi Haatim, Abu Nu'aim & Ibn `Asaakir (15/9/2).

42 Ibn Abi Haatim (pp. 93-4).

43 Ibn al-Jawzi in al-Manaaqib (p. 192)

44 Fulaani (p. 113) & Ibn al-Qayyim in I'laam (2/302).

45 Ar.: ittibaa'

46 Abu Daawood in Masaa'il of Imaam Ahmad (pp. 276-7)

47 Ibn `Abdul Barr in Jaami' Bayaan al-'Ilm (2/149).

48 Ibn al-Jawzi (p. 182)2)