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External article: What RBS and the banks can learn from early Islam

April 15, 2013 1 comment

I recently came across a short article about the economic benefits of an Islamic economic system. This was in Money Week and authored by Dr. Peter Frankopan titled “What RBS and the banks can learn from early Islam“.

It unfortunately takes a non-muslim Historian to point out the benefits of Islamic economics void of overburdening income taxes and interest/debt overhang that drag economies into the abyss.

The disastrous results released by RBS earlier this year were bad from a financial perspective – a loss of £5.2bn in 12 months. But they were even worse morally.

Contained in the 318-page report, and listed in the unfortunately named section “Highlights”, are a catalogue of sins, including fines for fixing Libor, for mis-selling “structured collar products by the cartload and the systemised scandal of PPI [payment protection insurance]”.

If the sentence that follows is not meant as a joke, it is certainly a brave one: “RBS is committed to serving its customers well and helping them realise their ambitions.” Who knew that those ambitions included being ripped off?

Nevertheless, the report does try to seek penance for past deeds. This been a chastening year, it says. A time “to put right past mistakes.” RBS is lucky it was not in the banking business around the time of the birth of Islam – or it would have found things much more uncomfortable than a light grilling by the Financial Services Authority and the series of humiliating fines and provisions. The bankers would not have been losing their bonuses; they’d have been losing their hands.

One of the great secrets of early Islam was the store that was set by justice and on fairness in commerce. It was significant that the spiritual revelations delivered to Muhammad promised a new way of doing things, a way that protected private individuals as well as businesses from being exploited by those with access to credit. Of particular concern was the issue of the principles of lending money – a topic that appears repeatedly in the Koran.

The customers of RBS and the other banks implicated in the current scandals would recognise the sins that Islam’s holy book warns about. Those who set out to exploit their customers by excessive borrowing charges are no different to “those controlled by the devil”, records the Koran.

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When are Social Security numbers required?

May 4, 2012 1 comment

This is from a Herb Weisbaum article on MSNBC (article link).

Since I had the very same questions… I found this very useful and so am sharing for the benefit of others.

I previously wrote about why a medical office would require a Social Security number , but readers reacted with a slew of more questions regarding that coveted piece of identification. Nan in Oregon wants to know who else can ask for it, Jerry in New York wonders if he could be discriminated against if he doesn’t reveal his Social Security number, and one reader may have just been duped into giving it out.

You wrote about giving out Social Security numbers at doctors’ offices. Who else can ask for this information?

Any business can request your Social Security number, but that doesn’t mean you are legally required to give it to them. Here’s the problem: Social Security numbers were never meant to be a personal identifier, but they’ve become just that. Ed Mierzwinski, Consumer Programs Director at U.S. PIRG, points out that “there is no law that prevents a business from discriminating against you or not doing business with you, if you do not provide the requested information.”

There are certain times when Social Security numbers must be used. This is not a complete list, but here are some of the major situations when they are required:
– Most financial transactions
– Employment records
– Tax returns (federal and state)
– Medicare benefits
– Contact with the Social Security Administration
– Applications for a hunting, fishing or other recreational license.

Some states have their own requirements for providing Social Security numbers. For instance, in Washington you must list your Social Security number the first time you apply for a driver’s license. Federal law (The Intelligence Reform and Terrorism Prevention Act of 2004) prohibits states from displaying your Social Security number on your license or vehicle registration forms, but they can still collect this information.

Because the Social Security number has become a personal identifier, you will need to use it for many other transactions — basically anything that involves a credit check or background check. A potential landlord or prospective employer will probably request it. And anyone lending you money or extending credit will need it.

“We really are in a terrible situation today with the abuse and overuse of Social Security numbers,” says Beth Givens, director of the Privacy Rights Clearinghouse. “Just try getting a credit card or insurance without providing your Social Security number,” Givens says. “You’ll also need it to get a professional license and to apply for college.”

You may even be asked to provide your Social Security number when starting utility or cable service. Before you give it out, ask if you can provide some other form of identification, such as your driver’s license number. They may be willing to accept it if you prepay the first month’s bill, which is the law in California. For people who live in other states, you may need to talk to a supervisor to make this happen. A driver’s license number is much less useful to an identity thief than a Social Security Number.

I’d like to know why credit card companies want my SSN. You must give it to them or you cannot open an account. I only give my number to companies that will pay me interest; not vice versa.

The bank or store issuing a card wants to check your credit history to see what sort of credit risk you are. They’ll also want your credit score to set the initial interest rate. If you have a good credit score you’ll get a lower interest rate than if you have a bad score. This may not seem fair, but it’s how the system works. You may be able to find a bank that will give you a card without requiring your Social Security number — if you provide other identification –- but I don’t know of one.

Can you refuse to provide a Social Security number on an employment application? Could this be a form of discrimination?

You aren’t required to provide your Social Security number, but there’s a very good chance you’ll eliminate yourself from consideration if you do not. The potential employer probably wants to do a background check on you and that’s easier to do with your Social Security number. Asking for this information is not a form of discrimination.

During a routine traffic stop, the officer looked at my driver’s license and then requested my Social Security number? Why would he need that and do I have to give it to him?

I contacted a couple of police departments and was told there are several reasons why an officer might ask for a Social Security number, and they all involve making a positive identification. This can happen if you have a common name, if the officer believes you are giving false information, or if the police computer indicates there’s a warrant out for your arrest. The officer will want to use a second form of identification (your Social Security number) before making an arrest. In these situations, if you decided not to provide the requested information, you could find yourself in the back of a patrol car headed to the police station.

Recently Verizon Wireless wanted my Social Security number before I could get cell phone service. I refused. Can they do this to me? Should I sue them?

Yes, they can do this. No, you shouldn’t sue them. Verizon wanted your Social Security number in order to do a credit check before giving you service. This is a common practice in the cell phone industry because they are extending you credit, allowing you to make calls each month and run up charges before your bill arrives. Verizon Wireless spokesperson Georgia Taylor says there is another option. “You can go with a pre-paid phone that lets you buy a specific number of minutes in advance,” she says. With these pay-as-you go plans, the phone company does not need to check your credit, so you don’t have to provide your Social Security number.

I called the toll-free “opt-out” number to stop the avalanche of unsolicited credit card offers I get in the mail. I was asked to leave my Social Security number on an answering machine. I am very leery about giving my Social Security number to anyone and now machines are asking for this information. What a joke. I will contact the credit bureaus via U.S. mail.

I understand your concern and I know this seems rather strange, but this is actually how the opt-out program works. The major credit bureaus run this program that lets you make one phone call to stop most pre-approved credit offers. The number is 1-888-5-OPTOUT (1-888-567-8688). Because the credit bureaus identify you via your Social Security number, you need to give them that number if you want to opt-out.

Even if you write, you’ll have to give them your Social Security number. I think as long as you initiate the call to this opt-out line, it is not any riskier than sending that information in writing. By the way, I called the opt-out line many years ago and saw the credit card solicitations drop dramatically after just a few months.

One downside to this program: it won’t stop the hotels and airlines you do business with from sending pre-approved credit card applications. I find that highly annoying. I get mail I don’t want and it increases my chances of being the victim of identity theft. I wish these travel companies would join the opt-out service and respect my wishes to not get these unsolicited offers.

I recently purchased something over the Internet and used my credit card. They asked me for the last four digits of my Social Security number. Is this common or am I being set up?

This sounds very strange. You do not need to provide your Social Security number or any part of it when using a credit card and I cannot see any reason why a merchant would need this information in order for you to make a purchase. Jay Foley at the Identity Theft Resource Center says they’ve heard about this and advise people that “no legitimate companies are doing this.” Chances are you’re being set up for some sort of scam or identity theft.

Call your credit card issuer right away and have the account closed. You should also contact the big three credit bureaus and put a fraud alert on your credit file. If you live in a state that lets you put a security freeze on your credit file, I would do that. You might want contact the Identity Theft Resource Center at 858-693-7935 where a real human can give you some help with this.

What Millennials Want

March 14, 2012 4 comments

Adapted and summarized from a Forbes article by Susannah Breslin

1. They want to be happy.

Over and over, I heard from millennials that they want careers that make them happy. Sound obvious? Not really. It used to be that doing one’s job meant sacrificing one’s happiness in life. That’s what made you happy: doing your job. Not anymore. The new doing it all is having a career that brings you joy.

They want balance.
“I want a healthy work/life balance that allows me to work hard, but still have time for a social life, working out, travel, etc.”

What makes them happy? Doing what they love.
“I want to get paid for doing what I love, so that my personal AND career life will be enjoyable.”

They privilege joy over a paycheck.
“…quality of life and enough money to support a family. I’d rather be happy than rich.”

2. They want to have a purpose.

At the same time, they want authenticity. They want work that makes them feel like they matter, like their contribution does more for the world than move a mound of virtual paperwork from one virtual desk to another. It’s not enough to crunch numbers, do their 40 hours, or have a 401k. Millennials want to work to make the world a better place.

They want to matter.
“I want recognition, a sense of accomplishment and purpose. I want to make a difference and never stop learning.”

Purpose is their currency.
“To be paid to do something I enjoy so much that I’d keep doing it even if I had a billion in the bank.”

It doesn’t mean anything if it doesn’t make a difference.
“Ideally, I want to get paid while utilizing my personal skill set and contributing to the betterment of others.”

They find passion in changing the world.
“I want to be able to give back to my community and incite change, all the while doing work that I’m passionate about.”

Same old 9-to-5? Forget about it.
“Any job or career path that effects change is worth getting into. There is no point clocking 9-5′s without influence.”

They want to fly high.
“I want to contribute to society and my company, and be justly compensated for it.”

3. They want freedom.

Just as important is the feeling of freedom. Hire a millennial and chain them to a desk? They will bolt. They don’t want a conventional career. They want work that changes them and impacts the world. They want flexible schedules, creative freedom, and the right to decide what their future holds, not let their path be decided for them.

They’re not fans of authority.
“The freedom to trust my own creativity and not have ideas quashed by sr. authority…I guess that’s why I’m a freelance writer.”

They want to career hop.
“I’m not even sure I want a career. The thought of staying in one field or industry sounds incredibly dull. But can I swing it?”

They want to play.
“Freedom to create, learn + explore. Flexibility.To be able to think + play like a child, w/ trust that I won’t behave like one.”

They want to be awesome.
“I want to do awesome things with awesome people in awesome places and on my own terms.”

They want to work from home, at least some of the time.
“I want to sit in my undies on the couch, drinking a smoothie, tapping out brilliant words on my Mac AND getting paid for it.”

FT: Life after Wall Street

February 18, 2012 4 comments

A very interesting article adapted from the Financial Times
By William D. Cohan

Some 40,000 high-level bankers lost their jobs in the financial crisis. But questions on what the former Masters of the Universe did next are met with impenetrable silence

When it comes to publicity, investment bankers are a notoriously fickle bunch. When it suits them – for instance, to boast about a game-changing M&A deal or to pump up a hot IPO – bankers are more than happy to be quoted by name, rank and serial number. But when it comes to addressing more difficult topics – the role bankers and traders played in the current financial crisis, why the world needed synthetic collateralised debt obligations in the first place or why they get paid so much – they scurry away faster than a cockroach when the light goes on in a darkened room.

Part of this behaviour is genetic. One of the supposed Wall Street truisms is that the great firms stay out of the limelight and shun press inquiries. They would prefer that their clients get the publicity, not them. This is, of course, a fabulous myth. The mass that has been written about Wall Street over the past decades confirms that the opposite is clearly the case. Still, Wall Street banks do all they can to drum into their employees the importance of not talking to the press – at least if they want to keep their jobs. The dictum of omertà is so powerfully reinforced that even after bankers and traders are no longer employed on Wall Street, many still stick to the party line (often sealed by contractual obligations not to discuss publicly their former employer).

Read more…

Inside McKinsey – knowing about the firm in the backdrop of a sad incident

November 29, 2011 3 comments

This is taken from a FT article by Andrew Hill titled “Inside McKinsey“.

The world’s most prestigious consultancy prides itself on its intellectual prowess and ethical standards. But this year, an insider trading scandal surrounding former McKinsey luminaries has left staff and alumni reeling.

When 1,200 partners of McKinsey&Company – the elite of global consulting – arrived at the Gaylord National Hotel & Convention Center, outside Washington DC, early on the morning of March 15 this year, they found themselves where they least wanted to be: at the centre of a media firestorm.

Up the east coast, in a Manhattan courtroom, an insider trading case was focusing attention on the links between key former employees of the world’s best-known, most prestigious, most self-consciously high-minded consulting firm and a corrupt hedge fund boss. For outsiders, intrigued by and suspicious of the McKinsey mystique, it was an irresistible combination. For partners, most of whom had flown into Washington from their offices around the globe for the scheduled annual meeting, it was a public embarrassment, a private outrage – and even a potential threat to the future of “the Firm”, as McKinseyites call their employer. “You can’t underestimate the shock, the disbelief and anger there,” recalls one McKinsey veteran. As Dominic Barton, the Firm’s personable global managing director, brought the opening plenary session to order, the older partners were “completely ashen-faced”, the same person recalls.
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David Rose (@davidsrose) on venture pitch presentations…

November 27, 2011 2 comments

This is from my live twitter feed from this presentation available on @moidtweets.

Presentations have to be KR(i)SP:
K – Knowledge
R – Respect
S – Skill
P – Preparation

What do investors look for?
Investors look for
1. Large and growing market
2. Scalable business model – start small but be replicable over time and profitable
3. Competitive advantage – what is built in to sustain the economics of the business model (e.g., IP, entry barriers)
4. External validation – someone else also needs to vouch for your business model and say it is a good idea
5. Reasonable valuation – risks in start-ups are so high that angels look for returns between 10x to 30x to get 25% IRR
6. Great people – neither the techie, UI designer, salesperson, or the biz/fin guy, but solely the entrepreneur – YOU.

Why are YOU standing there?
It’s important for investor to bet on the jockey and not the horse.

Characteristics of a desirable entrepreneur:
– Integrity
– Passion
– Experience (starting a business) Read more…

The last sermon of Prophet Muhammad (PBUH)

November 27, 2011 3 comments

This is the English translation of the last sermon of Prophet Muhammad (May Peace Be Upon Him)… taken from Huda website.

This sermon was delivered on the Ninth day of Dhul-Hijjah, 10 A.H. (623AD) in the Uranah valley of Mount Arafat in Mecca. It was the occasion of annual rites of Hajj. It is also known as the Farewell Pilgrimage. After praising and thanking Allah the Prophet Muhammad (May the Peace be upon him) began with the words:

O People! Lend me an attentive ear, for I know not whether after this year I shall ever be amongst you again. Therefore, listen carefully to what I am saying and take these words to those who could not be present here today.

O People! Just as you regard this month, this day, this city as sacred, so regard the life and property of every Muslim a sacred trust. Return the goods entrusted to you to their rightful owners. Hurt no one so that no one may hurt you. Remember that you will indeed meet your Lord, and that he will indeed reckon your deeds.

Allah has forbidden you to take usury; therefore all interest obligations shall henceforth be waived. Your capital is yours to keep .You will neither inflict nor suffer any inequality. Allah has judged that there shall be no interest and that all interest due to Abbas Ibn ‘Aal-Muttalib be waived.

Every right arising out of homicide in pre-Islamic days is henceforth waived and the first such right that I waive is that arising from the murder of Rabiah ibn al-Harithiah.

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