I was responding to Dreary’s comment.
“The answer to that is easy…They’ll still be trying to kill each other, just no one else will care anymore.” Are you kidding me?? Do you think we are supportive of Israel for their Oil???
Okay, so let me see, you take away interest in the form of cash coupons. Instead now you have to replace it with something else to entice lending. So someone above stated we replace it with a stake in the investment. This sounds like all you’ve done is taken the bond market and replaced it with Private Equity or Non-Dividend paying equity (which balloons realizeable value to a final repayment of combined principal and interest). How is any of this decreasing rather than increasing risk? Not to mention the impacts on capital markets and availability of funds since you’ve now replaced the entire bond market with far less liquid investments by stripping the cash coupons from the investments. You say this somehow binds the lender to the individual seeking the financing? It would take the financial institutions all of about 30 seconds to turn around and create a secondary market for their equity interests thus removing themselves as risk holders and situating themselves as deal brokering middlemen similar to what occured with securitization of debt. Wheeeeeee!!! Current economic crisis avoided…oh wait, nevermind.
louisvillegrad Wrote: ------------------------------------------------------- > “The answer to that is easy…They’ll still be > trying to kill each other, just no one else will > care anymore.” > > > Are you kidding me?? Do you think we are > supportive of Israel for their Oil??? Who said anything about Israel?
mh7 Wrote: ------------------------------------------------------- > louisvillegrad Wrote: > -------------------------------------------------- > ----- > > “The answer to that is easy…They’ll still be > > trying to kill each other, just no one else > will > > care anymore.” > > > > > > Are you kidding me?? Do you think we are > > supportive of Israel for their Oil??? > > Who said anything about Israel? You mentioned the ME…and Israel so happens to be in the ME.
rohufish Wrote: ------------------------------------------------------- > that’s what the mullahs would like you to believe, > along with a bunch of other worthless ideology. > > here, let me fire the first arrow into this ‘risk’ > theory: if you are a lender, especially if > unsecured, your money is at risk of non-repayment. > in fact you are more at risk from that perspective > than the borrower is. after all, he could just > skip town, change his name, and disappear with > your money. I was obviously referring to Market Risk, couterparty risk is not addressed by this concept.
This reminds me of Syriana…
Ughhhhhhh… I also hope this is sarcasim. If not, I’m sure this wouldn’t have ANYTHING to do with your affiliation to Islam… right??? Sounds to me like those Bible thumpers that say Christ is the only solution and there wouldn’t be any pain, despair, poverty in the world if we all just read the Bible blah blah blah… kill all those who don’t follow our ideals blah blah blah… Seriously take your garbage somewhere else.
>Seriously take your garbage somewhere else. using “garbage” to describe religion is not very nice, UNETHICAL… take it easy cfablackbelt… have you read those articles or just the title… DO YOU HAVE AN OPEN MIND or as soon as you read “islam/christianity/…” your hair goes up!!! get a glass of water and cool down! 
To those interested in this thread as focus on the merits/problems with a different investment philosphy…I used to work for a firm back in the 90s that had a clearing relationship with Saturna Capital in Washington State. They market the Amana Mutual Funds that invest according to Sharia. As someone schooled in capitalism, I never really understood how they could make money with such investment restrictions. However, I think they had a decent return profile and they have been around since the 80s. Check them out if you are curious about this subject.
well, the middle east (pre european colonial conquests) once had a flourishing economy.they were great traders and even made contributions to algebra (al gibr) and infact introduced the current numeral system to europe -so,times change,economies swap places,some are down today others are up.there is nothing weird about islamic finance -its been working well for centuries -even before oil was discovered there. hawala transfer -now outlawed by Bush because the al qaeda uses it - is an honor based money transfer system much more efficient than big forex dealers and their outrageous spreads we have today. there is much to learn from the middle eastern economy outside of their horrible dependence on oil
Yes I read the articles. In this case, the original article I believe is Garbage. It’s so heavily biased its not even funny. Just because I choose to shoot down something that I believe is utterly ridiculous does not mean that I am NOT open minded. Every idea/opinion has the right to exist/be heard/ignored/praised. The one we are so quick to forget, is the right for these ideas to be insulted. Something, the country where this site is based, would not tolerate and would most surely give me the maximum punishment for. To insinuate that I am attacking an entire religion is preposterous. I am attacking the article and the financial system that it is proposing.
I’d just say to anti-islamic-finance that it won’t hurt to look into the subject as the possible solution…it can be modified to put restrictive covenants on the borrower to protect the bank’s/lender’s position is concerned…as long as it doesn’t give the lender 100% guarantee for their money back in advance at the time of the contract (thru collateral,liquidation of the borrower etc) good report: http://www.imf.org/external/pubs/ft/wp/2007/wp07117.pdf i personally dont favor put-call arrangement though…