Another nice piece on Islamic finance as the new kosher--hell, the new gold!
Tuesday, December 9, 2008 at 12:53AM FINANCE: "Islamic Finance May Be On to Something: Banks and mutual funds that comply with Islamic laws have largely evaded the fallout from toxic debt," by Frederik Balfour, BusinessWeek, 24 November 2008.
The clovenfooted here is collateralized debt obligations (CDOs)--simply unclean in sharia terms.
Why people like Islamic finance is the strictness against speculation and the general old-fashioned attitudes on collateral.
Will you make less money on the upswings? Yeah. But you'll lose less on the downswings, so these funds and instruments are pleasantly conservative.
That's why two-thirds of new money into such funds comes from non-Muslims. These funds are safe havens for bad times.
Not exactly how Osama wanted it to work out.
[Ed. Yes, we ran commentary on this yesterday as well.]
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