Friday, June 5, 2009
Accounting Rules Hide Bank Loan Losses
Let's really pi$$ off the Rethuglicans and the status-quo free marketers by introducing Islamic Banking, or a variation there of:
No usury just equity sharing - sounds like the right thing to do instead of shellacing your customers with double-digit interest rates, absurd fees and zero equity (customer is not a stakeholder) in the game (borrow and lend cycle).
Surprisingly, none of the large Islamic banks took a hit in this market, so long as they stuck to their charter. We've tried exactly what the Bible says not to do (no usury), how about trying an alternative based on something other than the Compound Interest (".... the compound-interest equation, the implications of which from the Renaissance to the present are "obvious, staggering and unwelcome"" - http://physicsworld.com/cws/article/print/20407).
About Timothy Geithner
Read the Article at HuffingtonPost