Viet-Justice

For those looking for the hottest new investment deal there are now Sharia compliant ETFs on the market to meet your investing needs.  Javelin Exchange Traded Shares launched its first fund at the beginning of July catering to the Islamic market.

The Dow Jones Islamic Market International Index Fund (JVS) seeks performance that corresponds to a benchmark index that measures investment return on “Shari’ah compliant securities. JETS notes that certain businesses are incompatible with Islamic law and therefore excluded from the fund. These sectors include alcohol, conventional financial services (banking, insurance, etc.), casinos, firearms, and pork-related products.

That last part doesn’t sound very fun.  To many people investing is not fun, so let’s get down to basics.  The JVS fund opened up on July 1, 2009.  The opening price per share was $399.99.  In less than a week the fund as fallen down to $38.85 per share.  Sharia doesn’t appear to be a good investment.

The stock market works through good old supply and demand.  Let’s take a look at the JVS fund in depth and see what it looks like.

This looks very pitiful.  There were only 100 shares of the Sharia fund traded today.  It’s not that popular compared to other picks.  Let’s take a look at the Level II screen to see how many shares are for sale.  A Level II Quote lets you see all the buyers and sellers along with their prices.

The Ask price is what a seller wants to get rid of his shares.  If you’re a buyer you typically buy from a seller at the Ask price.  Here we have someone with 800 shares of the Sharia fund and they are Asking $399.99 for each share.  If you want to buy 1000 shares, you’re out of luck because there are only 800 shares for sale right now.

The Bid or Offer price is what a Buyer is offering to take the stock off someone’s hands.  There is a buyer out there and he’s wanting to buy 800 share of the Sharia fund, but he’s only willing to pay $0.15 for each share.  He obviously doesn’t think these things are worth that much.

What this means is, if you want to buy some Sharia fund shares you can put an order in to buy at the Ask price of $399.99 per share.  You could set your Bid price lower than the Ask price to see if the seller will lower his price.  If you Bid price is higher than the currently listed $0.15 your order will appear above the one pictured.  This goes on and on until both parties enter the same price for the stock if you don’t offer the Ask price up front.  But it gets even better folks.  Let’s say that you bought 800 shares of the Sharia fund for $399.99 and now you decide you don’t want them.  There’s a buyer out there offering $0.15 per share.  You can either lose $399.84 per share and take him up on his offer price, or you can name your price and it will appear in the Ask column.  Then you hope and pray to Allah that someone will buy those shares at your Ask price.

Now let’s look at a more exciting example, the Direxion 3x Daily Financial Bear (FAZ)

This fund also has a good example in it to illustrate price moves with a volume of over 185 Million shares traded today.  There are a total of 22400 shares for sale between the NASDAQ and PACX at 5.07.  What happens if someone buys all those shares from these two sellers?  The price next price listed is 5.08 with 3500 shares.  That is what happens behind the scenes when a stock price goes up.  Unfortunately the Sharia fund is unlikely to go up since it only has one seller who will probably never close a deal at $399.99.

This fund (FAZ) is not Sharia compliant.  This is a fund that performs opposite to the traditional financial sector we all know and love to hate (Citigroup, AIG, Bank of America, etc).  This is a 3x short fund so it basically means when the stock market goes down, this thing goes up at 3x the rate.  If the banking sector is down 5%, this fund goes up 15%.  And that’s how you make money when the market is going down.  Unlike the Sharia fund.  This puppy has had over 185 million shares traded today.  The Sharia fund on the other hand only traded 100 shares today.  Finance is hot, Sharia is not.

If you aren’t feeling very Sharia, then the Vice Fund (VICEX) might be worth taking a look at.  It is a traditional mutual fund and not an ETF.  The fund managers invest in tobacco, alcohol, and casino companies.  In a recession vice companies tend to do better than regular companies . I don’t own any VICEX shares, but it may be something worth researching if you don’t find the Sharia funds to be that profitable or fun.

Right now everyone is having a field day with AIG and their $165M bonus.  Well I say suck it up America.  First of all those bonuses were contractual obligations.  The first thing you learn about business is you honor contracts.   If AIG had been allowed to fail and go into bankruptcy then a judge could have wiped out all those contracts, but both the Bush and Obama administration have decided to keep feeding the parasite.  That money was destined to go to whomever it did, so no crying about it.

Now the brilliant people on FoxNews are saying that, hey “we” own 80% of them and don’t we get a say?  Well, did the Federal Government call a board meeting to say “We’re the new owners and the new policy is no bonuses or stock options until we say so”?  No, they didn’t.  Though to be slightly fair I bet they didn’t think they needed to call an emergency board meeting to get that point across.

The other dilemma that the people at FoxNews are facing is that the Board has a fiduciary duty to perform.  I doubt it would be legal for any Board of Directors of a public company to simply say, we’re not paying our contractual obligations in terms of bonuses or to foreign creditors (German and French banks) that we owe money to because it’s the American people who own this joint now.  The new stock holders (the government) should have proactively gone to all of the banks that AIG owes money to in order to get a better rate or defer payment until things stabilize.  It’s too late for that now, but Geitner should have a great To Do list.

The other rant I have is about all the Las Vegas parties that the financial industry haven’t canceled.  I’m not up to date on Nevada law, but in Georgia you are not entitled to a refund if you pay in advance.  If you pay your gym membership up front, you get a form that tells you under state law you have no recourse if the other party fails to perform because you are paying in advance and that the seller will not issue refunds for any reason even if the business closes.  You are entering into a 1-year or 2-year contract with payment in full in advance after all.  If I’m running a resort and I have some big wall street types, or small business types or a wedding party, wanting to rent the place out, you can sure bet I’m going to stick them with the non-refundable contract under state law.  They can either cancel their party and I keep their money, or they can throw the party and I can keep their money.  So, don’t be mad at Wall Street for continuing to party.  They’re just doing business with ordinary people who have a facility to rent.

The concept of a clan is something that many people have a hard time dealing with. Brother Grimm seems to think that the concept of society is exactly the same as a clan except on a larger scale. How can you shoot down the concept of subsidized health care while applying a shared agreement with a clan? All clans are in competition with each other for resources or in the case of the modern world, jobs which provide money which provide resources. Supporting all of society reduces the comparative advantage that you and your family have in competing for those resources. Since resources are limited it would be self defeating to follow such a course of action. If you were around in the 1990′s when the Internet boom hit you will remember that HTML “programmers” were making $300/hr easily because there were too few of them around to meet demand. As more people learned how to “program” in HTML and tools such as Front Page and Dreamweaver came along the value of this occupation dropped. The same is true with traditional occupations such as doctor or lawyer. The difficulty of obtaining the education and experience keeps the market rate high; however, if the survivability of others is enhanced it will drive down the value of all occupations due to dilution. Choosing to join together as a family unit is something you are not forced into, but it is to your advantage. Being forced into a societal family unit is not a choice and it does not benefit you directly. This is the difference between cooperation within small groups and a whole society. By keeping competition for resources at the forefront those who are the “have nots” will be enhanced by competing for those resources. We have seen this with countless categories of immigrants. Irish and Italians no longer wanted to work in factories so they made the decisions that lead to getting out of those jobs. Asians work in nail salons and dry cleaners until they earn enough money to go to college or send their kids to college. Latinos move from agriculture to prominent places in society in a very short amount of time. This is what white and black people have forgotten. Both races have a sense of entitlement and believe that pulling yourself up the ladder is not that important. I’ve known many white people who are angry at outsourcing jobs to India or Mexicans who lower the market price of lawn work. They ask, why can’t I make a decent living as a programmer or why can’t I charge $60/hr to cut grass and make a decent living? Well this is what happens when you have too many people on the planet. According to the UN there are over 200 million people that are unemployed across the globe. That says that the planet has 200 million people too many, just for starters.

This leads us to my second point. Society means global, not just the United States. To spread the wealth around means hugging trees and singing kumbaya with the whole human race. Does Al-Qaeda deserve the same consideration your clan does? In a black and white world the answer is no. Even in a world with infinite shades of grey the answer is still no. Both the USSR and the EU have dabbled in socialism with less than stellar results. Presently the United States through capitalism has shown the greatest level of success for its people. You can’t get off the boat in France and become a millionaire in less than 20 years through hard work. Keep in mind that millions aren’t a lot in a world where a starter condo in the city will cost you more than half a million in most markets. China and Vietnam are communist on paper, but there has always been a system of payoffs and tipping to assure proper service. Since these are the two largest and most powerful Asian economies it stands to reason that the quality of life is coming up through capitalism modeled after the United States. The key objective is to put yourself in a position to better your situation, rather than thinking you can ride through life cutting grass for a living. Asians have long understood that you need to first go after what will enable you to improve your life, then pursue what you really like later on. I would also like to point out that the concept of clan transcends national boundaries. It’s a global economy and Americans will be working everywhere, therefore those that work abroad will need all their resources rather than having them redistributed to people who don’t live in the same country where they are working. When working in Dubai should we spread the wealth around to them as well as Americans? When enlarging wealth redistribution on a global scale it makes even less sense than doing it in one country. It also lends opportunity to keep those excess 200 million people alive who will be competing with your children for resources. Some liberals may think that socialism will create a safer world for the children, but instead it will lead to a world where eventual poverty will arise because there are more people in the world than there is food. This may take many years to reach this point, but it will happen. This is why the family unit must be strengthened to weather economic and environmental forces at work. Some people will die from disease, crime, war, drunk driving, etc. but that is a fact of life. Not everyone wins the lottery, and when the grand prize is getting struck by lightning you should be hoping that you not in that 576000:1 odds of winning range. The objective everyone should be seeking is to make sure that other people are the ones to fall while your entire extended family can weather the storm. You can’t fix everything and fixing people you don’t know personally can’t be a factor when you have family and friends to worry about. Just remember when bad things happen to other people it’s to your benefit, especially when you take steps to reduce the risk of those things affecting your clan.

In a counterpoint to Brother Grimm’s bad argument for socialized healthcare I would like to point out that the reasoning behind his bad argument are flawed. First of all Government should be minimalist and all of the Libertarian flaws that he points out regarding affordable roads and police forces are foolish. In is an inevitable fact every family will become more wealthy over time. I must qualify that “family” is meant in the Asian sense of the word to mean the entire clan, not just a mother, father, and immediate children. When wealth is pooled across an entire clan it is possible to afford private police forces and private road repair. Just look at many Asian communities and you will find private policing and private funding paving roads more often than the government does.

Back to the story of paying for other people’s health care there are many reasons why the government should not get their grubby hands on our clan’s money to pay for some other clan’s problems. First is the feasibility issue. In a clan structure you are indebted to your relatives to chip in where they chipped in for you. For example, if your 3 uncles helped pay for your college, then you need to chip in to help pay for their children’s college. Since you have no control over how many children they have had you might be chipping in quite a bit. You also have to look at the cost of private nursing when your elders become too old to take care of themselves. That is quite a burden on the individual and I’m not quite sure how one can afford to take care of their own family, pay for private police and roads, contribute to charitable causes and pay higher taxes to cover people that aren’t related to you and who aren’t going to be contributing to the success of your family.

Military Generals must make life and death decisions every day. CEO’s must decide what is worth it to the business. As an individual you are a General and CEO for your immediate family and if you are among your elder council you are the Board of Directors for your entire clan. Socialized medicine has no place in a world where you can ask The Board for help with your medical expenses. In addition as CEO of your household you have the responsibility to decide on the proper course of action. In the case of Tyler, his parents chose to engage in deficit spending based on human emotion and hope that things would end up ok. They ended up losing in the end and have a huge debt burden to cover now. How is this my problem? Is it my uncle’s problem? My 5 year old 1^st cousin’s problem? No, we aren’t related to the family in question, therefore we owe them nothing unless it is out of charity. As rulers of the household the parents could have came to the conclusion that there was no ROI to be had by spending money on treatment after the first round. Perhaps they may have opted out of treatment entirely or tried holistic medicine. Sometimes the responsible thing to do is say that treatment is not worth the burden it will place on our checkbook and our relative’s checkbook. Responsible does not always equal kind or fair, but life isn’t fair. Get over it.

Grimm is totally off base when he says it is time to step up.

If we are the nation that we all say that we are, it is time to step up, pitch in, make sure your friends and neighbors aren’t left to the tender mercies of Social Darwinism and come up with a solution. Insurance companies aren’t going to do it. Doctors and hospitals aren’t going to do it. We have to do it as one nation, under God (or Allah, Buddha, Vishnu, or the Flying Spaghetti Monster. Insert the deity of your choice here), indivisible, with liberty and justice for all, not just those who can afford it.

Darwinism is a necessity that human society has attempted to eliminate. The animal kingdom has gains and losses and attempts to tamper with the balance have resulted in the need to cull the herd. Deer populations have exploded with the elimination of natural predatory forces. As a result we have licensed slaughters of deer referred to as hunting season. Don’t think that communist countries magically solve all of society’s woes. Government run homeless shelters sometimes overflow leaving some people out on the street in the cold. What happens when you have too many people to take care of? In the Eastern Bloc communist party youth sometimes took to setting homeless people on fire to reduce the consumption on the system. That may not happen in America literally, but it shows that once the system is overloaded measures must be taken to bring it back into equilibrium. This may mean reducing coverage or creating a shortage, meaning long lines for critical care. The latter means that the government would deliberately create a shortage so many people would die off before money is spent on their treatment. That would be the same as figuratively setting people on fire, so you can say we’re a bit better off than the USSR was. In modern China the people have to buy their own insurance because the government coverage is useless. There is minimal government coverage for general practitioners and if you need a specialist you have to cover that yourself. That’s modern socialism for you. With economic theory the opportunity cost is what you give up to get something else. What socialized medicine does is it takes free will out of the individual’s opportunity cost analysis. There is no reason to give up some of your family’s wealth and comparative advantage to assist someone else. This is especially true when the world is facing a population crisis. We need more Darwinism and other population controls, not less. By maintaining the status quo we are maintaining an environmentally friendly platform. Most liberals are perfectly fine with abortion, but want to expend tons of resources once the child is born. Conservatives on the other hand are likely to take the opposite approach and expend tons of resources protecting an unborn human, but spend little on its development after it is born. We need to mesh both of these philosophies to reduce the population before it goes up and to get rid of some of the population that is here.

There comes a time it is not possible to justify the costs associated with a particular situation, no matter what that situation is. A company will not expend millions of dollars on a losing venture and will stop funding the effort once it is apparent that no amount of money thrown at the problem can turn the situation around. Insurance is referred to as a vehicle of Risk Transference. What is left over is residual risk; however, many people choose not to quantify those risks and choose to spend themselves into oblivion without stopping at a hard number. Socialized health care will result in shifting that decision out to a government bureaucrat who will be making those same life and death choices for you based on how much money is left in the pot. The situation is exactly the same after introducing socialized medicine. Since the situation will be exactly the same in the end, except that personal liberty will be reduced, and that we will be fighting against Darwinism when the human race is overpopulating the planet, there seems to be no reason to switch philosophies regarding the care of your fellow man. Therefore I believe it is ok to say, “Tough Shit” unlike Brother Grimm. That’s not to say I wouldn’t be swayed in the future. Check back in with me when we reduce the planet’s population by a minimum of 200 million.

Reuters is reporting something very surprising.  Home prices are up and they are becoming unaffordable.  One issue is that there are more people than houses available in some areas.  This is a basic supply and demand issue, not a rich vs. poor issue.  You have the option to live in less crowded areas for a lower price, though this can contribute to suburban sprawl.  The other option is to pursue longer mortgage terms.  Sure you pay more in interest, but if you want to own rather than rent it’s your next best choice.  San Francisco now has 50 year mortgage products since most homes in desirable neighborhoods are in the millions of dollars and we’re not talking mansions, but less than 2000 sq ft.  I don’t see this as something to be alarmed about.  Japan introduced 100 year mortgage products 15 years ago and everyone there appears to be doing just fine.  Generational mortgages are the future for America and everyone should get used to the idea.  Most Americans can’t imagine having 3 generations under one roof.  In a logical way it does make sense because your children will inherit your estate and your legacy.  Shouldn’t they contribute to both as well?