Islamic Finance

Usury Frustrates the Creative and Unitive Aspect of Commerce

noreply@blogger.com (Unknown) — Sun, 22 Jun 2014 16:55:00 +0000

To produce a book, I prefer to teach the topic, and work through the questions with students, in that way testing the ideas and growing the book. This blog was associated with a class, but I could never get enough students through the schools to make the class a go. I will proceed with the book, but sadly, uninformed by rigorous debate.

What Islamic scholars I have tried to engage are generally reticent for whatever reason, contrary to my experience of Moslem hospitality in general. Perhaps the topic is too hot.

But I can engage Moslem scholarship, and I find a most excellent article here.

The rationale behind the prohibition of interest-based transaction is not beyond the common wisdom. If the funds are borrowed for consumption purposes, then charging of interest is clearly a sign of moral bankruptcy and inhuman behavior. In case the funds are provided for investment purposes, even then the prohibition is rational. It is obvious that such transactions involve a one-sided traffic. The entire burden of risk and uncertainty, being the norm of trade and business, has to be born by the debtor/investor. On the other hand, the creditor/saver is guarantied for a sure return.

I recommend this article for being succinct and comprehensive.

Although the rationale is not beyond common wisdom, there are also reasons beyond common wisdom to abjure usury, as I will note below.

Borrowing money to consume is to stay on a path of diminishing returns. If you need to borrow money to live, then your life is not ordered to your best options. Truly there are circumstances which are short term, or long term due to injustice, but to take a loan for consumption is to ignore the signal that something is wrong. There is the term "deserving poor" in which a lender gives a hand to someone who has been in error and is reforming. Charging interest distorts this person's recovery by making the lender's demands absolute while the borrower's recovery is relative.

Funds at usury are always available, for there will always be someone who can get more out of your life than you are willing to give, if only they can trap you. Usury is a trap. To refuse funds at usury certainly narrows the options for solving a problem, but it is within those very narrow options where one's unique talents are discovered, and the efforts at recovery are made on a most solid basis: you find where you are not only most productive, but where you are the best at what you do. Usurious loans give a false sense of achievement (I got the loan approved!) versus the grueling trial and error of finding what talent you have which the world will reward.

Anyone making a loan ought to do so limited in scope to an act of charity. As an act of charity, not only is there the loan, there is the opportunity of offering compassion in the form of advice from one who is doing well to another who is doing poorly. If the loan cannot be paid back, there is even more opportunity for a charitable act, and that is to forgive the loan. And non-forgiveness of a loan is a most mild rebuke to a borrower. The only sanction is to not lend more. The errant borrower is then obliged to go find another benefactor, from whom he will benefit from another round of instruction and bromide. He who lent without being any help is improved by the experience that his lending in this instance did no good.

If it is easier to borrow than produce, few people will change their habits in order to be more productive. Productivity is always measured to the degree you serve others. "Welfare" is taking borrowed credit, credit someone else will have to pay at some time. The state steps in and acts as usurer trapping the poor on one hand and obliging future generations with no say on the other hand to make good the loan. For society to offer welfare is to lure incalculable potential into a dead-end, and leave the tab with lenders who have no say. As Dorothy Day said, it is amazing hoe much you can get in the way of luxury if you just do without the necessities. Simply compare the results of welfare when it was the job of mediating institutions with welfare as a state function, and the argument is done.

As to usury on a business loan, first we must follow Noonan in recalling all loans are an act of charity, and a business loan is a chimera. The article on riba quoted above is correct, but to add to it, anytime "credit" is cheaper and easier up front than other means of finance, the moral hazard of taking easy or cheap or both in the form of credit will trip up the entrepreneur more often than not, and in any event, eventually.

Loans at interest are simply unnecessary to an economy. The usury-free range of options are sufficient to the task of a prosperous economy. And here again, the borrower's absolute needs become relative to the lender's desires. Serving the customer becomes secondary to paying the usurer, this misallocating resources in the enterprise.

The article goes on to eliminate the arguments for usury. I'll only add the pro-usury arguments depend on terms that upon which few agree, thus winning by obfuscation. Money, credit, profit, rent, capital, are all terms upon which among economists there is disagreement, even within a given school of thought. Even if within a school there is agreement on the definition of some terms, there will be disagreement on another, making conclusive argument impossible. Since no one has the others understanding of the terms in use, it is not possible to make an argument one way or another. The practice of usury remains like a evil redoubt, unassailable for a lack of martialing reason to the assault..

Apart from the major differences in sale and usury contracts, and in the nature and functions of physical and financial capital, Islam prohibited the transactions involving interest on moral and social grounds. This is because it develops miserliness, greed and a selfish attitude in the individuals, and destroys the high virtues of kindness, sympathy, help and mutual regard in the society. It create a tendency among the people to earn wealth by hooks or by crooks.... It diverts the flow of investment to the projects offering a high rate of interest irrespective of whether or not these are socially desirable.

These are the rationales not immediately apparent. Usury frustrates the creative and unitive aspect of commerce, as noted in this paragraph in the forms of misallocation and malinvestment. This aspect is little appreciated must must be highlighted.

If one steps back and observes, usury is a relatively small part of the economy, that is to say the vast majority of commerce is usury free, with equities and vendor finance taking up the lions share of commerce. This proves usury is unnecessary. At the same time, the destructive elements in the economy can be traced to the relatively small portion of the economy that is usury based. Like an otherwise healthy adult, the body economic can become quite ill over a tiny virus entering the system.

Please feel free to share this post with three of your friends.

Islam the Religion of Peace: Jews of Rhodes

noreply@blogger.com (Unknown) — Sun, 02 Mar 2014 02:03:00 +0000

Jews thrived on the Island of Rhodes from about 200BC, including 400 years under Islamic rule. That Islamic rule ended in 1912 when the Italians conquered Rhodes. Within some 30 years, there was not a single Jew on Rhodes, most having been killed.

Moslems tried to save the Jews from the Nazis. We never hear about Jews thriving under Islam.

Please feel free to share this post with three of your friends.

Islam and Forgiveness

noreply@blogger.com (Unknown) — Sat, 08 Feb 2014 18:19:00 +0000

The last two days I attended a conference on Forgiveness in Islam at the University of Washington. Prof. Arzoo Osanloo brought tremendous resources together and better yet introduced scholars who will esteem each others work for the coming decades, each improving the other.

For my part I got a brief chance to discuss my particular interest with Prof. Moumtaz, and that is loans, debt forgiveness and usury in Islam. I had some general discussions with Profs Turner and Barfield that were enlightening. The fireworks were saved for last with Profs. Lemons, et al and Nakissa going at it over "conceptualizing the habitus". Frankly, I am used to professors who get into it like that, and I welcome it.

I did form a question somewhat outside of my amateur study, and it relates to Prof. Osanloo's studies of the Iran experience. Prof Osanloo related a story of lad to be hanged under a regime more "radical (in the positive sense of "at the roots") in which the family offended decides whether the murderer is to be executed. Given what I heard from the other professors, let's have a case that is the Shariah version of "open and shut." Two adults playing chess (nothing disreputable as Prof. Barfield noted) in a cafe, lots of witnesses, Farhad beats Ehsan five games in a row, Ehsan is angry and begins to denigrate Farhad, Farhad is not having that and suggests Ehsan should learn to play chess if he wants to win, it becomes a shoving match, Ehsan loses the shoving match and screams "I'll kill you.." Screams it again on the way to the kitchen, screams it again coming out of the kitchen with the knife (three times) and then Ehsan kills Farhad. Mid-sized city, relations not too close and not too far, (as prof. Ben Hounet noted), a clear straight murder case.

Judge rules, clear case, Ehsan's life is forfeit. Ehsan makes an abject apology, blames himself for having pride in his chess-playing, when his skill was a gift from God and so not only did he murder Farhad, he is guilty of blasphemy and deserves to die, etc.

The family is sad at the murder of Farhad, sad at the whole case, moved by Ehsan's repentance, and decides to forgive for the love of God (let's ignore the problem of blood money for the sake of argument). And under the radical Shariah, Ehsan walks free. (And following Prof. El Fadl, this forgiveness is sad and beautiful.)

My observation: given all of the talk in the conference to the status of the forgiven in a regime of forgiveness, surely one can appreciate that even a forgiven Ehsan, free to walk, has had a profound sentence imposed upon him: he is a murderer. The Ehsan before the murder and the Ehsan after the murder are two different people. From inability to find a chess partner to compromised marriage prospects, a murder conviction is no small thing.

In the recent, western experiment someone who has "served his time" has been rehabilitated and the legal fiction is "justice served." It seems to me, in our system, this is an extremely expensive process that guarantees we arrive at nonsense.

Now, take the Ehsan case today, as I understood the new laws in Iran in the same case today Ehsan walks free out of the Shariah court, and into the state court where he faces an "Article 12" prison term of 3 to 10 years, under the recent, western european innovation that a murderer has offended the legal fiction of the state (my editorializing).

So my question is, in the "article 12" regime example today, just what does the state bring to the polity by imposing a jail sentence?

My thesis: mixing polities only makes things worse, but rent-seeking is an eternal human endeavor. The experience of Ehsan the forgiven ought to carry weight in the considerations of polity change. Prof. Kanafani-Zahar highlighted stability problems with these hybrid approaches.

Radical systems are proven by the test of time, but are subject to prejudice or woefully misunderstood. Under the Timurids Afghanistan was the world's California and Herat its San Francisco (my biases, but you take my point). It seems to me the problem is not a lack of innovation in mix-and-match NGO recommended systems, but a lack of restoring what works.

Now I am not proposing the world go Timurid, but in a place like Hong Kong where the state is near non-existent, Moslems practice Shariah, the Chinese see the deal broker, the Christians use mediating institutions, the Hindus have their system, and the Jews theirs. In spite of a reputation for probity, fairness, independence and accessibility, the courts are rather unattended. At the same time Hong Kong is a beacon of peace and prosperity.

What little reading I've done on the Prophet I recognize as a merchant his esteem of freedom. Instead of Weber's 1919 definition of the state as a monopoly on violence, settled in the West, perhaps Islam can organize states as "protectors of freedom", evident in the rationale of the prohibition on usury, a process which enslaves people. I am sure there are other examples of freedom esteemed.

Please feel free to share this post with three of your friends.

Plain Dealing

noreply@blogger.com (Unknown) — Mon, 20 Jan 2014 17:48:00 +0000

One aspect of Islamic finance is its emphasis on clarity and plain dealing. On the other hand, let's look at a rule from a capitalist book:

This Statement provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. Those standards are based on consistent application of afinancial-components approach that focuses on control. Under that approach, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. This Statement provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings.

Definitions are so convoluted that books have to be written to explicate a "true sale" from one that is not true. This makes it unlikely that partners to a deal can really appreciate their risk.

Please feel free to share this post with three of your friends.

Housing Bust in Canada

noreply@blogger.com (Unknown) — Sat, 18 Jan 2014 02:09:00 +0000

Mish Shedlock is notable for getting credit as a component of a lack of hyperinflation in that great debate. He is mystified as to how his predictions of a real estate bust in Canada have not yet occurred.

No one knows for sure precisely when any bubble will burst. I got the US housing bubble correct but missed Canada by a mile.Read more at http://globaleconomicanalysis.blogspot.com/#QMR6i3beHYGO4FFu.99

This is easy: Canada requires a 20% down payment and there is no mortgage deduction on Canadian taxes. So those seemingly insignificant points actual have profound effects.

For a decade most homes in USA were bought with nothing down, sometimes even negative LTV, but in Canada someone actually had to demonstrate enough discipline to save a down. A much more responsible customer base.

Next, with mortgage interest deduction on taxes in USA, buying a house is a tax dodge, making the reason for having a house to that extent abstruse.

When it comes to usury (interest) even slight rules can have large effects.

Please feel free to share this post with three of your friends.

Libyan Banks and Shariah

noreply@blogger.com (Unknown) — Fri, 17 Jan 2014 01:36:00 +0000

Comes 2012 news of protests in Libya:

A number of employees at a branch of Sahara Bank in Benghazi have held a demonstration outside the bank to protest against its use of interest. They demanded that the bank start using Sharia-compliant banking methods.
According to the Libya Herald, none of Libya’s major banks are Sharia-compliant, but the Governor of the Central Bank, Saddek Elkaber, has said that he believesdemand for Sharia-compliant banking is so high that it may become an important part of Libyan banking.

I wonder if the banks were Shariah-compliant under the late leader Muammar Khaddafi, who died in Oct 2011. And now...

Preparations are underway for an international conference organized by the Central Bank of Libya in collaboration with the World Bank and the Islamic Development Bank on Islamic banking in Libya.

So the geography of islamic finance continues to evolve.

Please feel free to share this post with three of your friends.

Insh'Allah!

noreply@blogger.com (Unknown) — Mon, 30 Dec 2013 10:44:00 +0000

From the New Testament, James 4, 13-17:

¹³Go to now, ye that say, To day or to morrow we will go into such a city, and continue there a year, and buy and sell, and get gain:
¹⁴Whereas ye know not what shall be on the morrow. For what is your life? It is even a vapour, that appeareth for a little time, and then vanisheth away.
¹⁵For that ye ought to say, If the Lord will, we shall live, and do this, or that.
¹⁶But now ye rejoice in your boastings: all such rejoicing is evil.
¹⁷Therefore to him that knoweth to do good, and doeth it not, to him it is sin.

Please feel free to share this post with three of your friends.

Halal Duck

noreply@blogger.com (Unknown) — Sat, 28 Dec 2013 19:06:00 +0000

One of USA's largest duck producers has a Halal offering in its line:

Halal Whole Duck (5-5.5 lbs)
$15.99
015010050DPCS

I mentioned earlier Costco was carrying whole Halal lamb. With 1/4 of mankind to serve, this should be good business.

Please feel free to share this post with three of your friends.

Mish on The FED Dual Mandate

noreply@blogger.com (Unknown) — Tue, 24 Dec 2013 14:17:00 +0000

Mish Shedlock Gets This Exactly Right:

Dual Mandate Equals Mission Impossible

Here's the deal.
1. The Fed can control money supply but it will have no control over interest rates (or anything else).
2. The Fed can control short-term interest rates, but then it would have no control over money supply (or anything else).
That is the full and complete extent of the Fed's "control". Note that neither price stability nor unemployment is in either equation. The reason is the Fed controls neither.
That is a mathematical certainty, yet people have preposterous beliefs that the somehow the Fed can not only control inflation but also unemployment.
If the Fed, the Bank of Japan, the Reserve Bank of Australia, the ECB, or the Bank of England, or the central bank of China could control the unemployment rate, rest assured they would have done so long ago.
The economic illiterates will point out the unique nature of the Fed's dual mandate, but I will counter with the mathematical stupidity of such an idea.
At best, the Fed can control (using the word loosely) a maximum of one thing at at time, and employment is not one of those things.

He does a very good job defending deflation (properly understood). Then he flubs this a bit...

Lower Prices Spur Sales
People hold on to things when replacement costs are high. Lower prices, not higher ones, spur sales. Sales spur employment!
Think about cars. If prices dropped 20% would that spur cars sales? I think so. If you could replace your aging car 20% cheaper and it had more features, would you do so?
What if they rose 20%? My guess is that, all thing being equal, car sales would plunge.

Well, I watched auto prices rise 20% ... and houses 50% over a short several year period, and sales of both jumped up. So is he wrong, well, no because he added "all things being equal.."

What also changed was usury, "cheap interest rates" distorted a market already distorted by usury itself, in which one who could afford the payment on a $200,000 at 9% could afford the payment on a $300,000 house at 6%. What happened (new market entrants, over time) is such people merely paid $300,000 for a $200,000 home.

Once the camel's nose, in the form of usury, is in the tent, the loan sharks then can do what they want, there are no rational limits.

Please feel free to share this post with three of your friends.

Why 48% of Home Sales Are All-Cash

noreply@blogger.com (Unknown) — Mon, 23 Dec 2013 18:43:00 +0000

Because bankers are buying up homes with debt.

Mish Shedlock has outlined how Blackstone investments and a German bank have put together a bond that is predictably a bad investment. Since usury is legal, bad investments crowd out good as promises of something for nothing (you can retire on worthless investments) cause people to make bad decisions.

Blackstone Group LP, the world's largest private equity firm, became the largest owner of rental homes in the U.S. , acquiring 41,000 homes in the past two years. In October, Blackstone offered the first-ever "rental-home-backed" security on Wall Street. The bond is backed by just a fraction — 3,207 — of the rental properties owned by Blackstone. Monthly rent checks from the properties will be used to service the $479.1 million security.

All of this is legal, and there would be no need to ever make it illegal. What is necessary is to stop destroying other income opportunities for people, by ending the subsidies for the rich bankers. The banks are back at these crimes because we bailed them out.

Next, if this goes bad and people decide not to pay up, they can be legally brought to law at the expense of the rest of us. Shunning, or not, is sufficient sanction for wrongdoing.

We do not need laws, but we do need to end privileges.

Please feel free to share this post with three of your friends.

Ben Franklin on Interest

noreply@blogger.com (Unknown) — Thu, 19 Dec 2013 02:44:00 +0000

Usury is wrong because it does damage, and Ben Franklin points out man-made laws do nothing to curb usury. He goes on to note specific damage done by usury:

And here it may be observed, that it is impossible by any Laws to restrain Men from giving and receiving exhorbitant In terest, where Money is suitably scarce: For he that wants Money will find out Ways to give 10 per cent when he cannot have it for less, altho' the Law forbids to take more than 6 per cent. Now the Interest of Money being high is prejudicial to a Country several Ways: It makes Land bear a low Price, because few Men will lay out their Money in Land, when they can make a much greater Profit by lending it out upon Interest: And much less will Men be inclined to venture their Money at Sea, when they can, without Risque or Hazard, have a great and certain Profit by keeping it at home; thus Trade is discouraged

If this is true, then land is expensive right now, relatively speaking, since interest rates are being forced down.

Please feel free to share this post with three of your friends.

What Is Money?

noreply@blogger.com (Unknown) — Wed, 04 Dec 2013 16:22:00 +0000

What is money? In summary: medium of exchange and store of value.

Money solves the problem of rare double coincidence: how often does the shepherd want 250 eggs, and the chicken ranger want a lamb, at the same time and place? Not very often. Gold and silver alleviates the necessity of double coincidence as the shepherd can trade lamb chops for this much silver, lamb shanks for that much, and by the time the market day is over, sell off the lamb parts to ten different buyers, and then in turn trade some silver for bread, some for wine, some for eggs. Not only does it facilitate trade, it promotes division of labor, the essence of true wealth in society.

Money emerges from a known commodity, and is a store of value inasmuch as it is still a commodity. People mistake “a store of value” for “an absolute in price stability.” They want something magical from money, and when it is not there, they prefer a king fight their battles for them, and accept the pretense of an absolute store of value in fiat currency. Odd that, since without exception, every fiat currency in history has failed. As will the USDollar in time. No telling when, but it will.

Aristotle got the ball rolling in defining money as:

1.) It must be durable. Money must stand the test of time and the elements. It must not fade, corrode, or change through time.

2.) It must be portable. Money (must) hold a high amount of ‘worth’ relative to its weight and size.

3.) It must be divisible. Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be ‘fungible’.

4.) It must have intrinsic value.

Please note that no piece of paper nor any binary electronic record fits that definition.

Number four gets to the issue of money why comes from a commodity. Money has a value even if not used as money. There is nothing that says the intrinsic value as a commodity must be stable, but that human desire to have what cannot be causes much of the mischief around money.

So you can see why gold and silver have traditionally been money, given Aristotle’s definition. And you can see why Aristotle defined money as he did by observing why gold and silver were commonly money.

Others have tried add to the definition of Aristotle, but note the error, the definitins get to circumstances around money, and not money itself:

1. Acceptability. If it emerges as a medium of exchange, then the acceptability is already there. Acceptability is not talking about money, but about circumstances.

2. Limited supply or scarce: simply not so... the arguments for scarcity fail to apprehend portability means concentration, and whatever the supply of money is necessarily perfect. If a ball of gold from space dropped spectacularly onto Siberia immediately doubling the known above-ground amount of gold, the the next day all prices would simply double. Contracts in gold would be repudiated given the “act of God” and there would be some disputes, but a doubling would have little impact. But never mind this, it has never happened. What does happen, as Spooner noted, when the price of gold drops, there is more plate, decoration and jewelry, when it rises, that plate, decoration and jewelry gets melted down into coin. (And this is why jewelers have traditionally been bankers.) Talk of scarcity is grounded in a misunderstanding of money.

3. noncounterfeitability. Again, if it was counterfeitable, then it would not have emerged in the first place. Gold and silver as commodities are almost impossible to counterfeit.

4. Money is uniform. Each denomination should be the same everywhere in the country. Gold and silver do this, and even worldwide. And this argument let’s the camel’s nose in the tent. To whom do we trust to define uniformity? Why, the State of course. This definition is not only dishonest, it is malevolent. Federal reserve notes, for example, and not only fraudulent, they are backed by violence.

There is a definition I’ll add, that Aristotle could not have noticed, a characteristic I noticed: money is disinfectant. Since money is usually used in international trade, while the goods laden on the vessel or camel are transferred to another conveyance, the merchant captain and the broker actually trade metal (gold or silver). The disease on the hands of the traders are killed by the medium of exchange. What is interesting is as new metals are discovered, the ones that are antibiotic are made into coins and the others are not.

So what is money?

1.) durable.

2.) portable.

3.) divisible.

4.) intrinsic value.

5). disinfectant.

As mentioned in a previous post, warehouse receipts are not money. Fiat currency is not money. They are warehouse receipts or fiat currency.

Tallies of credit allotted are not money. Tallies are not money. Credit is not money.

if you do not mind being wrong in your analysis, then think in sloppy terms. If you want to be sharp and tight and arrive at correct conclusions, as Mish has on the universally expected hyperinflation, then get your definitions right.

Why have my heroes all got it wrong on the definition of money? I think because they all allow “interest” (usury) as acceptable in economics, and are confounded for their perfidy. I too was perfidious on this point, and repented of it to good effect.

Keep the definition of money tight and you’ll benefit.

Please feel free to share this post with three of your friends.

Andrew Young on Bretton Woods

noreply@blogger.com (Unknown) — Mon, 02 Dec 2013 02:30:00 +0000

Andrew Young was interviewed By Tavis Smiley on his show Sunday, and finished with Andrew Young. It is a remarkable interview. I've said if something is not true in all places at all times, then it is not true. What I teach, what I learned, what I have found reliable in just about every field, Andrew Young finds true in freedom movements.

When you have 30 minutes, give a listen here...

At 31:12 on the timer into the show, Cornell West asks Andrew Young about MLK’s critique of capitalism and imperialism. Young said he never heard King talk in those terms of the problems they faced. Young said King's analysis was Biblical, not economic. Young quotes King as saying communism needed more freedom, capitalism needed more responsibility, or words to that effect.

To my mind problems are solved on levels other than they are experienced. Economic (physical) problems are addressed on a religious level, mental problems addressed physically, etc.

I've argued you decide the field you want to enter, the customers decide what you will sell. as to the freedom movement: Young wanted jobs movement, the people wanted back of the bus to the front of the bus movement. So that was the program they had to offer.

Appealing to government never got them anywhere. It is when the civil rights leaders met personally with business leaders and business defied the (Jim Crow) law, that the South finally integrated. Here again, government is never the solution, business always is. In his book, The Walls Came Tumbling Down, Dr. Abernathy chronicles the same point. I'll say it again, if you want to be a revolutionary, start a business.

Amb. Young also talked about political power, and the disappointments regarding movement politicians of African heritage who were either co-opted or sold out. Two points: the progressives targeted preachers of African heritage to advance their causes contrary to the flocks interests, and to some extent successfully, and who does not sell out of those who go into politics? Does anyone expect people of African heritage to be less corrupt than anyone else. It's why they call it politics, because it is corrupt.

At 33: 08, Young talks about one of his first votes as a new congressman. The 1971 vote was on ending the Bretton Woods compact in which the dollar was tied to gold. Young admitted his ignorance of economics as a new congressman, but had the wit to ask the salient question, if "the dollar is not tied to gold, won’t people play politics with money?"

The panel testifying as to the wisdom of ending Bretton Woods consisted of Paul Volcker, Arthur Burns and George Schultz. Arthur Burns replied “young man you’ll soon learn the dollar doesn’t need you to protect it.”

Young experienced the rebuke as “shut up colored boy.”

The committee voted to end Bretton Woods on a voice vote. Andrew Young was right, they were wrong.

Please feel free to share this post with three of your friends.

Is KMart Rent-to-Own Halal?

noreply@blogger.com (Unknown) — Sat, 30 Nov 2013 01:44:00 +0000

KMart and its parent Sears is cutting into the definitely usurious practices of those rent-to-own companies with a program that might just be halal. Before we get into that, they are targeting the same customers, people, whose credit is bad, who want things they do not need. So although the KMart plan may be halal, it doesn't mean it is right. On the other hand, for someone who is busted due to no fault of his own may find a halal method of buying tools to start a ditch-digging business or to replace a income-generating computer just ruined by a spilt pot of tea, the deal may be creative and unitive.

The KMart program looks pretty bad given the press reports of how under the program a $300 TV ends up costing $415 at the end of the 18 month term. Here is an example in the article:

In an example provided by Sears, customers could buy a $400 item or group of items by making 10 biweekly payments over five months of $33, then decide whether to keep making payments, return the merchandise, or spend $220 to buy out the lease for a final cost of $553. That would be the equivalent of a 114 percent annual rate, according to Mierzwinski.

Here are some typical if rather liberal rules among the scholars of Islamic finance:

Murabahah: In this type of transaction, the bank purchases the property and then re-sells it to the buyer at a fixed profit. The property is registered in the buyer's name from the beginning, and the buyer makes installment payments to the bank. All costs are fixed at the time of the contract, with the agreement of both parties, so no late payment penalties are permitted. Banks usually ask for strict collateral or a high down payment in order to protect against default.

Ijarah: This type of transaction is similar to real estate leasing or rent-to-own contracts. The bank purchases the property and retains ownership, while the buyer makes installment payments. When payments are complete, the buyer gains 100% ownership of the property.

Those two options seem pretty straightforward, but the devil is in the details. Did the buyer get the very best deal on the property? Are the payments above market rent? Is usury just built into the deal under another name? As one Moslem remarked, often these deals are "pork labelled beef."

The KMart offer as it stands is not halal, so it is contrary to Christian rules as well. They have two contracts regarding one event, and ownership does not truly pass.

Why the KMart deal above might be made halal if it were more clearly worded. Note that KMart considers it a sale, but one has the right to return it. If you can return it, then you never owned it, you were renting it. So why does KMart not just call the first part a rental for a 5 month term? That would be contract one. One may extend the rental just like any other rental.

At the end of the five month rental, KMart may offer a new and separate contract: would you like to buy what you are renting for $220? Since the option currently is yes or no without recourse, then just make that a second separate contract. So far, still halal. The offer is two separate contracts, with the same options. Also, the costs are based on the very best price the companies otherwise offer. So far so good.

If the rental price is well above market, then it is not halal. But what is the market for an assortment of tools or the rental of a computer? Should KMart discover an unknown market for rentals of a popular item, competitors are free to step in and compete to the benefit of the renters.

The second contract is to buy the goods at a residual price, which is probably higher than the market price, but it is in any event a voluntary transaction. On a $300 TV there is no market, for used TVs at any price. Even GoodWill will not take them, and you have to pay to recycle them in most places. So that item is not a good example. A man who has built up a good ditch digging business with the tools on rental may very well be willing to pay the price since he is used to those particular tools. In any event, he is free to go buy other used tools elsewhere.

And the same thing with the computer. A used $500 computer may very well has a resale value of $50 after 5 months, but that computer may be priceless to he who created his tools of the trade and put them on that machine. Of course he can send the computer back and buy a used $50 machine, but who knows, the point is in both instances, the prospective buyer is not obliged, therefore it is fair.

It seems to me the KMart deal is as a practical matter halal, although as described it is haraam, quite the reverse to normal problems. Since it seems the one contract can be divided into two separate unrelated contracts, each usury free, then it should be no problem to make this deal halal.

If KMart declines, this opens up an opportunity for entrepreneurs to get into the business.

I invite criticism of my reading of the deal.

Please feel free to share this post with three of your friends.

The Pope On Capitalism

noreply@blogger.com (Unknown) — Tue, 26 Nov 2013 13:19:00 +0000

Pope Francis has released a “position paper,” a teaching document which is important but not infallible. I am responding to the news stories abut the document, not the document, becuase I have not read the document, and the news storries may very well misrepresent what the document says.

VATICAN CITY (Reuters) - Pope Francis called for renewal of the Roman Catholic Church and attacked unfettered capitalism as "a new tyranny", urging global leaders to fight poverty and growing inequality in the first major work he has authored alone as pontiff.

***Well, capitalism, unfettered or otherwise, is a problem, since it legally protects usury. ***

In it, Francis went further than previous comments criticizing the global economic system, attacking the "idolatry of money" and beseeching politicians to guarantee all citizens "dignified work, education and healthcare".

***Now this is odd. How do politicians guarantee all citizens dignified work, education and healthcare? Only markets can provide this. Capitalism is not markets, but neither is politics. I must read the original to see how this is resolved.***

He also called on rich people to share their wealth. "Just as the commandment 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality. Such an economy kills," Francis wrote in the document issued on Tuesday.

***The real wealth is human action, participation in life. The best way to share wealth is investing in the businesses that create goods and services for fellow man. Again, I look forward to reading his ideas for sharing the wealth.***

In it, economic inequality features as one of the issues Francis is most concerned about, and the 76-year-old pontiff calls for an overhaul of the financial system and warns that unequal distribution of wealth inevitably leads to violence.

***Yes, and that violence is most welcome by the abusers themselves. Such a crisis gives them more power.***

"As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets

***Absolutely correct... markets need the governance of the players, the buyer and the seller in their natural roles...***

and financial speculation

***Capitalism is based on financial speculation instead of gainful production. It well understands gainful production, but only to better play the financial speculator.***

and by attacking the structural causes of inequality, no solution will be found for the world's problems or, for that matter, to any problems," he wrote.

***Right... and the structural causes are all rooted in state interference in the markets. For example, the outrageous Jim Crow laws were laws, only held in place by the force of the state. So it is with the structuraly causes of inequality.***

Denying this was simple populism, he called for action "beyond a simple welfare mentality"

***Excellent, welfare is a trap...***

and added: "I beg the Lord to grant us more politicians who are genuinely disturbed by the state of society, the people, the lives of the poor."

*** Screeeeeech... say what? I need to read this in context. Is this a throw-away line or the summary? Assuming any were, what could they do? Assuming all were, what makes anyone think they would agree on a solution? Assuming they all agreed, what could they do? I bet he has better things to say than this.***

Please feel free to share this post with three of your friends.

Violating Loan Covenants

noreply@blogger.com (Unknown) — Sun, 24 Nov 2013 04:36:00 +0000

Usury was not allowed until the Church began to tolerate the State, and its penchant for promoting usury. A banker once told me "show me a successful SBA loan recipient and I'll show you a case of bank fraud."

See, it seems that on paper loans at usury are putatively carefully controlled to keep from having the money wasted. This is contrary to the real world where constantly changing circumstances require constantly changing allocation of resources.

If your "partner" is a state agency who has lent you money, this flexibility is not possible. If you manage to survive and repay the loan, necessarily you managed to survive by breaking the rules. Most do not manage to do so.

Earlier this year, reports came out that Fisker had violated its loan agreements multiple times before being cut off by the Obama administration in 2011. Bloomberg reported that Fisker’s technical defaults began in 2011 partly due to “lower-than-required earnings before interest, taxes, depreciation and amortization, and failing to meet a production milestone of at least 11,000 vehicles sold to dealers for an average of $87,500 by Sept. 30, 2011.”

On the other hand, if your partner is someone who has not loaned you money, but invested in your business, you have the benefit of the advice of someone who knows how to make money.

Usury leads to terrible misallocation of resources, which usually ends up in the hands of abusers.

Please feel free to share this post with three of your friends.

Shostak On Bubbles

noreply@blogger.com (Unknown) — Wed, 13 Nov 2013 18:20:00 +0000

Dr. Shostak schools us on the harm done by QE...

As the monetary pumping strengthens, the pace of the diversion follows suit. We label various non-productive activities that emerge on the back of the expanding monetary balloon as bubble activities – they were formed by the monetary bubble. Also note that these activities cannot exist without the expansion of money supply that diverts to them real wealth from wealth generating activities.

Just so. The entire essay is here... plus a comment by yours truly.

Please feel free to share this post with three of your friends.

Credit Is Not The Issue in Small Business

noreply@blogger.com (Unknown) — Wed, 13 Nov 2013 00:37:00 +0000

Mish Shedlock looks closely at economic stories, and provides substance to the point I often make in teaching business start-up: no one needs money to start a business. You need customers. Until you have customers, you cannot possibly know what money you need. When you need money, there is no need to take a loan. Usually you can swing it yourself, or, take on a partner with money. No usury (or interest) is necessary to grow a business.

And so says the vast majority of members of the NFIB. A tiny 6% think their business problems are the result of no "credit." Actually that is surprisingly small.

It is all the various forms of government interference that are the problem. When you see poverty around the world, one should instantly think "failed government policy." Now, freedom is the key, but those who promise freedom really only promise to take over the means of oppression from today's government.

God help us.

Please feel free to share this post with three of your friends.

Usury and the Catholic Hierarchy

noreply@blogger.com (Unknown) — Wed, 06 Nov 2013 18:01:00 +0000

All popes, cardinals, bishops, abbots, priors and so on are sinners. They will be the first to tell you that. In what way do they sin? Probably in the most mundane ways.

Is it possible they sin in remarkably similar ways? Probably. For example, the selling of indulgences was a widespread and lamentable practice. It motivated Luther to divide the Church, and Pope Adrian confirmed the error of the Churchmen in a letter to Luther.

Is it possible that the Churchmen today are engaged in a similarly widespread odious practice? Yes, we can see plainly they do in regards to usury. Although the church professes explicit rejection of usury, the practice is widespread.

With remarkably little sophistry, the practice is given a pass.

Usury, the taking of interest on a loan, is strictly forbidden because it does harm. It is expressly how the powers that be, the ones devoted to doing evil, aggregate the power they need to literally call the shots, advance the greedy agenda of accumulation, theft, misallocation, war and so on.

A loan, properly understood, is a charitable act if given outside of commerce, and a mutually beneficial act if given inside commerce. Under no circumstances can any fee be attached to a loan. One can argue that it is not a fee, or it is not a loan, or the world is different now, and such arguments offer widespread comfort. So did the arguments for selling indulgences.

You make a loan to someone who is in a jam, and will be helped. (You do not loan money to people who will not be helped). The charitable part may get intense if the party to whom you made the loan in fact cannot pay it back. It becomes alms. If you demand interest, you are exploiting someone in jam. Numerically, most loans carry no usury, although the IRS will penalize the practice of no usury.

As a kid my parents would send me to the corner store to get “one pound ground round” and the proprietor would ring it up, write my family name on the receipt, and throw it in the till. I never paid anything at the store. Same at the drug store a block away. My father got paid once a month, and went in to pay his tab where he ran them up. My dad gave his employer credit ( a loan - the time my dad waited to be paid), the grocer gave my dad credit, the wholesalers gave the grocer credit, the manufacturers gave the wholesalers credit and so on. No one charged anyone interest (usury).

In 1971 the last vestiges of a gold standard were wiped out in USA, and this world disappeared into a system that shifted from human relationships to corporate relationships. All such transactions went through banks (credit cards) where interest could be applied and taxes mulcted. We did this to win the Vietnam War, and to finance the great war on those in poverty.

Now you could take on debt unto the 3rd and 4th generation and pay only interest (with a tax deduction!) E Z. Rare is the Bishop who could pass up a new cathedral made possible by the promise of interest on a loan based on collection basket projections. This is just the modern version of an appallingly widespread abuse.

The Council of Trent was convened in part to address the widespread selling of indulgences. Selling indulgences was expressly prohibited already at that time, as usury is today.

But desiring that the abuses which have become connected with them, and by any reason of which this excellent name of indulgences is blasphemed by the heretics, be amended and corrected, it ordains in a general way by the present decree that all evil traffic in them, which has been a most prolific source of abuses among the Christian people, be absolutely abolished. Other abuses, however, of this kind which have sprung from superstition, ignorance, irreverence, or from whatever other sources, since by reason of the manifold corruptions in places and provinces where they are committed, they cannot conveniently be prohibited individually, it commands all bishops diligently to make note of, each in his own church, and report them to the next provincial synod. (Sess. 25, Decree on Indulgences)

Perhaps some day the church will issue something similar in regards to interest (usury). “Dear Lord, give me chastity, just not right away.”

Sin makes one dull, and this sin has obscured a parallel that needs highlighting.

We all know the church teaching on contraceptives, which forbids the use thereof, for contraceptive violate the creative and unitive aspect of sex within marriage.

This teaching is lost on very many people. What is the difference between NFP and ABC when the goal is the same? While the subtlety is too fine for many minds, without culpability, no Bishop could possibly claim to be obtuse on this point.

Usury likewise destroys the creative and unitive aspect of commerce. Investment in enterprise is to participate in some way, bringing together time and talent and treasure, to the benefit of all. What mistakes are made redound to the people immediately involved. What success they have is directly related to fine tuning their offer to the customers immediately at hand. The outcome is creative, the process is unitive. New and better is created, the new and better bring people together.

In a market free of usury, people with innovative offers find participants with time talent and treasure to share in the introduction. Naturally these are small businesses who introduce a marginally attractive product or service, and over time, by means of customer feedback, ever improve their offer and thus widen the market. They spawn imitators and at some point come to the attention of large firms that take the idea and apply large scale economies of scale in manufacturing, finance and distribution, among others, to lower the price to the point where virtually everyone has access to the good or service, with their own money.

This is the proper understanding of wealth, not how many billionaires we have, but how many people can access how wide a range of goods and services with their own money. The market described above is necessary and sufficient to create a world in which that range is widest. A world in which one can afford his own range of needful things is one of peace and prosperity. No better guarantee of justice.

Usury is contrary to that creative process, that unitive process. Usurers hate this process, and proscribe it with such policies as "get big or get out!"

To loan money at interest is to asymmetrically advantage the lender. He is able to accrue money and thus power that is exceptional. Whether loaning at interest to someone in a jam, which is exploitative, or loaning easy money to someone with a winning proposition, the result is contrary to creativity and unity.

It is contrary to creativity because the easy money proposition collects time and talent that would be otherwise available in the market for projects closer to what customers want. It misallocates resources.

It is contrary to unity because the result is the rich get richer and the poor get poorer, denying a natural distribution of goods and services. The have-nots rightfully resent the haves, even if unaware of their own contribution to the problem, by paying usury.

The solution is not to outlaw usury, only to make it unenforceable, like a gambling debt. Then the practice would wither away. No sanctions for failing to pay interest, no debtor's prison for failure to pay a loan.

We will in time see a reinforced statement against usury like we did against selling indulgences at the Council of Trent. This must occur, for the only alternative is the Church disappears. There are no other options. But since the gates of hell will not prevail against the Church, it is only a matter of time before there is a Trent-like emphatic condemnation of the practice.

Let’s just hope the bishops get around to it before there is another split in the church.

Please feel free to share this post with three of your friends.

In Banking They Keep the Profits, We Pay the Fines

noreply@blogger.com (Unknown) — Mon, 28 Oct 2013 16:54:00 +0000

Cross-posted at hbh...

As soon as I heard regulators and Chase agreed to a $13 billion fine for, well whatever, my first thought was how were we going to pay for it?

JPMorgan Chase has come to a tentative agreement with the U.S. Justice Departmentto pay a record fine of $13 billion in a settlement with state and federal regulators. The bank still faces a U.S. criminal probe into its mortgage bonds along with more than a dozen probes globally.

One thing for certain was Chase itself was not going to pay it, no one at any corporate, decision making level was going to pay it, and certainly the effects of criminality in the banking system was not going to show up in the paychecks or bonuses of those responsible for the criminality. Their sinecure was going to continue, since that is how capitalism works.

Mish Shedlock, reporting in another context, explains exactly how we will pay Chase's $13 billion dollar fine. Mish does not relate his story to the fine payment, but this is how the "watchdogs" in government on one hand pretend to punish a wrongdoer, and on the other hand make the rest of us pay. Until the $13 billion dollar fine is paid, you'll just have to do with less.

The reason usury is forbidden is because it does damage. The amazing part is we need absolutely sero usury (interest on loans) to make a modern economy work. Usury is no more necessary to business than gambling is to enjoying life. Yes, some people believe thay cannot be happy without gambling, but there is another area where participation presents only downside to the players.

Feel free to forward this by email to three of your friends.

Please feel free to share this post with three of your friends.

Usury, Japan & Germany

noreply@blogger.com (Unknown) — Tue, 22 Oct 2013 17:12:00 +0000

The tension between "church and state" (or should I say Mosque & State) is in more active tension in Islamdom than in Christiandom. Although I think anti-usury, pro-prosperity argument is on the ropes in Islamdom, not doubt it has been knocked out and dragged off the deck in Christiandom. My course received one enrollment this quarter, and upon examining the materials, the enrollment was cancelled. No-usury is a hard sell.

The problem is to believe in the unseen. In the Catholic Mass, there is a profession of faith in which the visible and invisible is cited. Bastiat talked about the unseen in economics. Prosperity has at its root the word "hope" and that is for something imagined, but by definition not yet seen. all of the good we can have necessarily comes from that which we cannot yet see, yet to be discovered. that takes freedom to discover, freedom from force and fraud. The state can only count and measure what is, and then uses force and fraud to advance its agenda.

Instead of freedom, we let usury flower, damage follow, and then attend only to the seen, the damage done. All of the news is about the politics of attending to the damage done by usury.

Mish Shedlock summarizes the problems in Japan, masters of modern banking:

Some of the reasons for lower family formation are universal, others like nuclear waste are country specific.
Inflating money increases asset prices (until the bubbles pop) but that does not help those fresh out of college with no assets. Pumping up home prices helps banks stuck with housing inventory, but it hurts those seeking to buy a first-time home.
Easy money policy is to the benefit of those with first access to money: the banks and the already wealthy. Easy money is to the detriment of everyone else.

Yes, usury leads to nuclear waste, because such monstrosities cannot be financed without cheap money to make them viable, government power to make them not liable, and further usury to make them attractive as an investment.

Mish cites an article from Germany on the German family:

Euronews spoke to Udo Drews and Sabine Radtke who had still not been allocated a place at a day care centre after more than a year. The delay meant they had to choose a private one – which was more than twice the cost of a public facility. A full-time place there costs more than 1,000 euro a month.

So let's have mom have a career so she can pay someone to raise her kids? Has anyone thought this through?

The solution is freedom, something both Jesus and Mohammed preached, and lived radically. That the religious leaders gave the secular powers a pass to advance usury is how this problem entered our economies. I am not calling for Imams and Bishops to raise armies, only to teach the truth, that usury is wrong, because it does damage. And then to stop engaging in usury themselves.

feel free to share this post with three of your friends.

Retirement and If You Don't Work, You Don't Eat

noreply@blogger.com (Unknown) — Sat, 12 Oct 2013 15:53:00 +0000

With Usury comes the false promise that one can retire to some luxury, such as a beachfront property in Mexico, living off of the interest on retirement funds. This whole notion is in direct contradiction to St. Paul's injunction "if you don't work you don't eat."

But people will argue "I saved." You saved what? Credit claims built on a system you can easily recognize as wrong, if you were not greedy for the promises of stones turned into bread if you wold just worship Mammon?

To take the Social Security/pension offer is to bet the Capitalism trumps Christianity.

I advise against the bet, the outcome is rigged.

Please feel free to share this post with three of your friends.

Obama on Credit

noreply@blogger.com (Unknown) — Wed, 09 Oct 2013 16:15:00 +0000

At some point in the game, there will be another adjustment, as in 2008, there is no getting away form it. The USA Fed "shutdown theatre" will have nothing to do with it, but we'll be treated to blaming ad nauseum.

In the midst of this was a gaffe by President Obama. A gaffe is when a politician accidently speaks the truth.

See here:

Obama told a news conference that the United States has a lot of debt obligations beyond paying its Treasury bond holders and that the government's failure to pay other bills would also hurt U.S. creditworthiness.

Now, the "credit" in creditworthiness is sheer fiat-based, meaning there are no assets backing the credit. The next aspect is how con artists work: the "con" in con artist is short for confidence artist, which almost everyone knows, but few realize the "confidence" the con artist installs is in the mark, not the con artist. When YOU believe it will work the con artist can scam you. (This is also critical for when you get ripped off, you tend to keep your mouth shut, for feeling so stupid.)

So the game is that the victims (investors and beneficiaries in USA creditworthiness) at some point will realize they've been had, and then it comes tumbling down. There will be many 2008s, in which there is a short rush for the doors, but only one Rome, 476. There were plenty of 2008s between 190AD and 476AD, so to speak.

Nobody knows when the end will come, when enough people say "i don't believe it." Right now plenty of people say "It is tradable.." meaning they think the system is rotten, but there is still money to be made trading, knowing it is perverse and rotten.

We could restore peace and prosperity by deregulating banking, and treat interest payments the way we do gambling debts in law, and that is they are unenforceable contracts. I know, I know... it is never going to happen. But if you wrap your brain around that reality, then you can live an authentic life as the regime crumbles around you.

The people who will be the most bitterly disappointed in all of this are the preppers, who organize their lives around 'the end', only to find it never comes. Prepping gets so boring so fast.

The powers that be have no idea when the end will come either. But just to be sure, in these unsure times, the powers that be keep appointing Jews to the post of Fed Chairman. After having Arthur Burns take USA off the gold standard (lite) all Fed Chairmen have been Jews, just in case (except for G. William Miller <Carter again!>, who tried to do the "right" thing and was canned). When this goes bad, and it will, the powers that be will escape blame by doing what they always do, blame the Jews.

Keep your mind on how your confidence in the system is the problem, not the powers that be who offer you an internal contradiction upon which to place your hopes: fiat currency usury.

Feel free to forward this by email to three of your friends.

Verizon: Biggest Bond Issue Ever

noreply@blogger.com (Unknown) — Tue, 01 Oct 2013 14:37:00 +0000

Bloomberg reports:

Verizon Communications Inc. (VZ) sold $49 billion of bonds in eight parts in the biggest company debt offering ever.

The reason for doing this follows on the Fed policy to keep usury rates low. Low usury rates mean people on fixed incomes get less resources. The difference goes to Verizon, in a roundabout way.

Verizon is "selling rights to income stream in return for debt exposure." Mohammed would reel! Jesus would condemn it.

First, where is the money? They can say 49 billion dollars all they want, but there is not a cent of money involved. It is all notional.

The value here is based on what Verizon is worth, and Verizon has licenses to use public utilities to transport electric communications for its customers, who are all on limited contracts going out no more than one year, among all users of electronic media. Can a company be more flimsy? To sell the rights, let alone buy them, is too risky to be acceptable. Can you say Enron? Worldcom?

Next bondholders are superior to owners in case of default. This violates the "skin in the game" necessary for a just economy. Bondholders have incentives contrary to orderly commerce. They say "die" when time would heal a company's problems. Owners get wiped out today by bondholders who prefer to be paid now than await a workout.

The selling of these bonds is a misnomer, because no money changes hands. Credit is traded for bonds. If you read the entire article, there is a whole lotta shifting of other bonds around to make room for this bond. It is all notations on balance sheets, who has credit in their own right, and whose credit is denominated on other's debts. There is no way to accurately account for this, especially since there are no hard assets to link to the debts.

Credit is all fine and good in business. It is why there is never a problem of a shortage or money, since people extend credit when there is no money. But it is one thing to extend credit on a pound of bacon, another on a notional value of the Verizon balance sheet. One is human, person to person, the other is devoid of humanity. It is a lie.

Now bonds work backwards: by borrowing money at low rates, a companies costs are lower, so its profits are higher. (That is not to say more taxes are paid, the company will launder the profits overseas or otherwise spend the money on its owners.)

When Verizon is paying 6% on 50 billion, they pay 3 billion to the pensions in interest. At 4%, they pay $2 billion, saving $1 billion. Kaching!

So who loses? Pensions buy these bonds. At 6%, mom was getting $6,000 per year from her pension. At 4%, she is getting $4000 per year. Ouch!

(Now the deals are far more complex than this, but in essence, this is what happens.)

So what we have in capitalism is usury is protected by law. Verizon can buy a whole lotta help from the state with just a fraction of the billion windfall. Mom can get no help at all, and less so, when her income goes down.

Usury is not forbidden because someone says so, it is forbidden because it does harm. When will Christians and Moslems begin to develop alternatives to a usury-based economy?

Please feel free to share this post with three of your friends.

My Hijab

noreply@blogger.com (Unknown) — Fri, 27 Sep 2013 20:09:00 +0000

Last weekend had some pretty grim stories out of the Middle East of the terror killing of many Christians, among others. Add to that the Kenya Mall assault and it was an uncomfortable weekend to be Muslim in America.

I saw this flying in and out of LA in which families whose wives/mothers wearing the hijab appeared quite uncomfortable, what with avoiding eye contact and the nervous, awkward way they negotiated the tight spaces on the plane etc. At LAX I saw three fellows in full mufti looking for something halal for lunch. Conspicuous.

I regretted this collateral damage to terror activity, and a few days later I walked to my local market, wearing a hat I threw on that said simply Catholic. Not Catholic U or Catholic High, just Catholic. I forget where I got it, but I got strained looks and curious service.

I think people believe these fights are over religion, and when they erupt, blame all religion for not keeping the peace. This is curious, and example of social conditioning. The reason for these fights is real estate, not religion. Always has been, always will be.

Please feel free to share this post with three of your friends.