Studying Islamic Finance

السلام والازدهار العدالة المجتمعي
You are visiting a blog associated with an online noncredit course studying the topic of Islamic Finance, moderated by John Wiley Spiers. Feel free to participate in our discussion, and if you are interested in taking the course visit http://www.johnspiers.com/Islamic_Finance/Welcome.html

Monday, December 23, 2013

Why 48% of Home Sales Are All-Cash

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.

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