Islamic Finance

Read this interesting article: Al-Suwailem, S. (2000) Towards an objective measure of Gharar in Exchange. Islamic Economic Studies. Vol 7, No. 1&2, pp. 61-102.


His paper is very interesting as he defined Gharar, not as uncertainty and risk as in the traditional sense, but a zero-sum game (that is, in order for one to win, the other must lose). He argued quite well using Islamic and non-Islamic sources that one important Islamic principle, the eating of others' money for nothing, is reflected strongly by the zero-sum exchange.

He then suggests a measure of Gharar based on the Shariah: Y(d) = sum_w(p_iy_i) - sum_w'(p_iy_i) where Y(d) represents the net cooperation value for a given player from exchange d. The probability of state i = p_i , y_i = payoff of state i. w = set of states for win-win while w' = set of states for win-lose or lose-lose. So a negative value indicates a zero-sum exchange which is undesirable.

What I find interesting is really his arguments which gives me some insights into Islamic finance. With the argument of zero-sum exchange, I see why gambling is illegal, not so much as the uncertainty and game of chance, but that it is an extreme form of a zero-sum exchange where there is definitely no possibility of a win-win situation. In order for one to win, others have to lose.

That is in contrast with the lucky draws that we always organize in Singapore. I've always wondered why lucky draws are deemed to be legal Islamically. Now I understand. In gambling, the players have to set their bets - which means there will be negative payoffs (a set of winners and losers)...in the lucky draw, the players do not contribute anything, so there is no losers, only winners (payoffs are always positive). Using the Gharar measure, w' will be an empty set and the net cooperation value should not be negative.

That helps set the tone for the financial organizations for more cooperative contracts rather than competing ones. Will write more on this later.

Considering to upgrade to SLR

Hmm...choices, choices. Of course, I'm on a tight budget since I'll be a student once more. Well, what are my options:

Canon 400D, 450D, 1000D
Nikon D40, D40X, D60
Sony Alpha 200, 300, 350.

Which one will offer the best value for my money. Consider that I'll be in Scotland and likely to take outdoor photos (lanscapes, buildings, people), evening photos (low lighting) as I'll be busy during the day. Also, somethings I am considering based on my previous camera:

1. Image Stabilizers
2. AF speed

Hmm...

Persistant Bug

Maybe that my body is signalling something to me that I'm exhausted...this cold is lingering for over a week now and getting worse.

And somehow the medicine is making me feel muzzy and sleepy. Yet, too much things still to do...May God grant me better health soon.

The wedding photos

Tired but happy!

Even after a day, I still feel very tired from my brother's wedding...tired but happy. Everything went well...by no means perfect, but it definitely exceeds expectations. The nikah was on time at 5.30 pm with my friend, Ustaz Abdul Manaf, solemnizing. Then, at 6.30, cocktail started. Unfortunately, guests were late and we had to start the dinner at 8.30 pm instead of the scheduled 8 pm. But that afforded the chance to catch up with those guests arriving early. This is especially precious as most of the guests are family and close relatives. After that, everything went quite smoothly and the occassion finished about 11 pm with some of the closest relatives lingering to chat.

Food was great and music, as provided by my friend Elson and his band, was superb. The Hilton staff is definitely the friendliest and most efficient that I've ever encountered. Don't know about the guests but I definitely had a blast.

Still, there were the drama...my parents were to go home with my uncle and aunt who came down from Malacca. Unfortunately, the house key was with me and I was staying at the hotel for the night. So, they had to turn back to fetch the key....ah well, that couldn't rival my sister's wedding drama of the house being flooded. :D

Well, will write more soon...in the mean time, have to apologise to my friends who weren't invited. I really wished I could invite but there weren't enough tables.

Peace

My brother's wedding

Tomorrow is my brother's wedding. Can't believe he is that grown up. I remember telling him bedtime stories...ah, time passes so quickly. I think my mother would be very happy had she been alive today.

“And among His Signs is this that He created for you spouses of your own kind, that you may dwell in tranquility with them, and He has put love and compassion for one another: verily in that are Signs for those who reflect.” (Quran 30:21)

So here's my prayer for him and War War:

Oh God, strengthen their love for you and so rediscover their love for each other through you.
Oh God, bless their marriage as they undertake one of your charges to us.
Oh God, grant them your grace and that they have compassion and care for each other.
Oh God, grant them tranquility in their home that they may use it to be closer to you.
Oh God, grant them good children, that their children be a delight to their eyes.

Sid