City of Brass

City of Brass

fiscal crisis explained by stick figures

posted by Aziz Poonawalla

This powerpoint of unknown authorship has been making the rounds of Wall Street brokers, so Barry Ritholz embedded it online in Google Docs for all to share (click it to begin slide show):

ace_mortgage.png

One thing worth noting, and emphasized in the above, is that the entire crisis arose because of the assumption that house prices would always rise. That, in a nutshell, is why the entire conservative argument that the market is all-knowing and all-wise is fundamentally nonsensical. True laissez-faire economic policy will always result in abuse and short-term greed taking priority over long-term prudence.

However tempting it is to place the blame on the system for the crisis, however, some measure of responsibility rests on the putative homeowners themselves, who sought mortgages beyond what they’d normally be able to afford. The reasoning went, instead of a regular mortgage for $X,000, I can get an adjustable rate mortgage for $2X,000. Then I can refinance the mortgage later and pay a lower rate! Of course as the housing bubble collapsed, the ARMs’ rates increased rather than decreased and these buyers were left with mortgages they could not even remotely afford as the interest payments ballooned. That’s why the value of the securities referred to in the powerpoint collapsed, because these purchasers were defaulting on their loans left and right. The point here is that the homebuyers let their fascination with large homes beyond their means tempt them into mortgages that under prudent fiscal planning would have been obviously unwise. The dream of a big house in suburbia – which also relies on the assumption of cheap gas for the long commute, but that’s another assumption and separate issue – proved unsustainable in every way.

It’s also worth pointing out that the crisis as a whole is a direct
consequence of the central role that interest plays in the economy. The
less reliant you are as a consumer on interest, the more you are
insulated from the effects of the crisis. Abiding by Islamic principles
and avoiding interest is easier said than done, but it is still
possible – for example, there are schemes whereby the lender actually
buys the home outright and then sells it back to the purchaser in a
rent-to-own kind of scenario. The truth of the matter is that it will take longer to own your own house this way, and you won’t get as big or fancy a (first) house as you’d like, either. But living frugally is a virtue in and of itself… at least until you outgrow the first home and trade up.

Autumn Equinox

posted by Aziz Poonawalla

Allah
is He Who … has subjected the
sun and the moon (to his Law)! Each one runs (its course) for a term
appointed. — (Qur’an 13:2 – Yusufali)

I am reminded of this ayat by yesterday’s Astronomy Photo of the Day, depicting the Autumnal Equinox:

seasons_tezel

The phot shows the path of the Sun in winter (bottom band), summer (upper band) and the Autumn Equinox (middle band), when the length of the day and the night are exactly the same. To a fasting muslim, the Autumn Equinox has special relevance – in a nutshell, the fasts get shorter from here on out :) In two years most of Ramadan in the northern hemisphere will occur prior to the equinox. The Sun and the Moon follow their course, however, without regard to the inconveniences of the believers…

Obsession

posted by Aziz Poonawalla

The movie Obsession is a polemic for the modern age, the digital equivalent of a Jack Chick tract, only directed at muslims rather than Catholics. The movie is somewhat ironically named, because if anything it reflects the obsession that the Islamophobes in western society have with Islam as the bogeyman threat to their romanticized concept of perpetually-threatened Western civilization – muslims as Orcs.

Naturally, tens of millions of copies have been distributed for free in newspapers to voters in critical swing states like Ohio, Pennsylvania, and Florida. And segments will be shown on Fox News, which reaches tens of millions more viewers.

Actually, one newspaper has refused to run the paid insert DVD – the Greensboro News and Record in North Carolina. The editor, John Robinson, explained the decision at his blog:

We did not distribute it. I was not involved in the decision; it was an advertising call, in keeping with advertising policies.

I asked our publisher about it. He said it was divisive and plays onpeople’s fears and served no educational purpose. The revenue it wouldhave brought in was not a motivator.

As I’ve said on other occasions about news decisions, just because you can publish doesn’t mean you should.

In a follow-up post, Robinson goes on to note the backlash that his papers’ principled decision has provoked from the Islamophobic right,

We’ve been called true Americans. We’ve been called politically correct. We’ve been called a lot of things.

One man from Miami called to ask why I was sheltering readers fromthe evils of Radical Islam. I told him I didn’t think anyone wasunaware of the events of the past seven years.

A blogger called us gutless. Jihad Watch wanted me to “explain what exactly we should do with those jihadist preachers preaching death and destruction in the video.”

Hmmm. A better question for Obama and McCain.

Indeed.

I, for one, believe in the fundamental decency of the American people.In many ways the DVD is an (expensive) excercise in preaching to thechoir. The political strategy is simple – to play off the “Obama is amuslim” smear and associate Obama with capitulation to and associationwith the terrorist threat. It’s fear-mongering 101. But the people whowill buy into it are the ones who were not going to vote for Obamaanyway. We will see who wins Florida, Pennsylvania, Colorado, Ohio…we will see. In fact, I am embedding the video right here in the interest of transparency and free speech.

The promoters of this video and I are in agreement about this much: the video speaks for itself. I have more faith in my fellow citizens than they do, though.

Incidentally, I have argued that Obama could have defused the power of the muslim smear against him, if he was not so afraid to take a stand against the fundamental logic of it, and say clearly, “I am not muslim, but even if I were, there would be nothing wrong with that.” Instead Obama stops short at the insistence that he is not muslim, and then talks about how the smear is offensive to muslims as well, but fails to connect the dots. In so doing he has left breathing room for the smear to propagate, and it’s that opportunity that Obsession seeks to exploit. I think there is still time for Obama to make that statement, but the longer he waits, the less impact it will have.

Laylatul Qadr

posted by Aziz Poonawalla

[Yusufali 97:1] We have indeed revealed this (Message) in the Night of Power:
[Yusufali 97:2] And what will explain to thee what the night of power is?
[Yusufali 97:3] The Night of Power is better than a thousand months.
[Yusufali 97:4] Therein come down the angels and the Spirit by Allah’s permission, on every errand:
[Yusufali 97:5] Peace!…This until the rise of morn!

97:1-5 (Listen to Recitation by Husain Saifuddin DM)

Last year, I wrote a bit about the intense preparation for Laylatul Qadr and described the ibadat that we perform all night, from after sunset to sunrise, on that holiest of nights. That night is nearly upon us again and all my energies are focused upon it. In many ways, Laylatul Qadr represents a spiritual climax of Ramadan. After it, there is the definite sense that Ramadan is drawing to a close. We must marshal our energies not only for the intense ibadat of Laylatul Qadr itself, but also for the remaining week of Shehrullah that comes after it, because time is truly precious and this holy month is fast slipping from our grasp.

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