Loan shark issue

[FireNexus]

Why do you consider it unethical to charge that kind of interest? Don't just use some appeal to emotion, state your ethical principle or its axioms clearly.

Interest at those levels is correlated with loans that cause demonstrable harm. Typically, they are enforced by means that are nearly or actually criminal in their scope. Even when not, they are near-universally not mutually beneficial. When they are paid back, the lender is the only one who benefits. The borrower almost always would be better off not having the money in the first place. In your circumstance, the borrower is essentially a gambler trying to cover his losses (which he failed to do anyway, so he realized no benefit from your loan demonstrably) so that he can either continue to gamble or hide the extent of his problem.

Those who are willing to borrow under such terms are either uneducated, thus unable to provided informed consent to such a contract; desperate, thus unable to make a rational decision regarding the contract (your circumstance); or borrowing in bad faith, so actually unwilling to borrow at the specified terms (possibly your circumstance).

Participating in those loans is unethical because when it's made in good faith, it either A. Preys upon the defenseless, or B. Preys upon the desperate/addicted/cornered. Just because the person agreed to it (and in fact proposed it) does not make your behavior less predatory. When the mouse with toxoplasmosis runs toward the cat to be eaten, it is still prey. Either this guy never had the intention to pay you back as agreed (in which case you both acted like assholes), thought wrongly that he was going to make enough money to do it (in which case he's stupid, Doctor or not), or was so scared of his investment failing that he wasn't able to use good judgement and you became an enabler of his self-destructive decision.

Legal or no, if you had even basic concern for his well-being you wouldn't have participated in such anloan with him. The only other possibility is that you were too ignorant to realize how potentially damaging the consequences of such a loan could be to him. And in that case, you're kind of a moron for lending such a large sum of money without the due diligence to understand the approximate risk level.

[FireNexus]

Let me ask: Would you lend to your brother at 2500% interest? Your best friend? A close friend? An old drinking buddy? At what point in the social relationship hierarchy would you be unwilling to take so much from a borrower?
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I'd contend that such interest is not unethical for a small loan of little consequence (give me $50 to get this thing and I'lol give you $100 next week) but gets into that territory some point between $100 for a random person and multiple months rent for someone with a family and such an extensive gambling problem that it has rearranged their life in spite of their desperate stop-gap.

[Simon_Jester]

Firenexus has done an excellent job expressing the ethical problems with usury*. I am writing the sentences below to show my agreement, and also to make sure they're summarized in a way that discourages pointless nitpicking.

1) An ethical loan, or any other contract, must be entered freely, as an informed decision by rational parties who intend to fulfill the contract.
2) Rational, informed people will not freely, intentionally enter into a one-sided contract that will predictably harm them.

3) Therefore, if such a harmful contract is entered, either...

3a) One of the signers was uninformed.
3b) One of the signers was not capable of making a rational decision.
3c) One of the signers was being coerced.
3d) One of the signers had no intention of fulfilling the contract.

In cases (3a) through (3c), participating in the contract is unethical. In case (3d), participating in the contract is ethically permissible, but extremely stupid.
______________________

*"Usury" is here defined in the modern sense of the word, as loaning at excessive interest.

[Ralin]

Wow, what a bunch of presumptuous cocks.

Doctor guy offered the loan terms of his own initiative. He had the means to pay it back even in the worst case scenario, and he did pay the bulk of it back shortly afterward. There is zero evidence that he was coerced, that he didn't intend to pay the money back or had reason to think that he couldn't pay the money back. He clearly thought the potential reward was worth the cost and risk. Everyone tooting their horn about how it's unethical because his decision was 'irrational' needs to just shove it.

Yeah.

I mean, what exactly are you asking for?

Frankly, I think he wants us all to be impressed by how smart and reasonable he is. Haven't you ever heard of humble-bragging?

[Simon_Jester]

We've got someone who knows more about high finance than almost any active poster on this forum pointing out that what the borrower was doing here is little different from gambling. That's the problematic thing here- the reason the guy borrowed the money on his own initiative is because he's been essentially gambling with large sums, and couldn't pay. Remember that he didn't just borrow the money from the original poster, he borrowed or tried to borrow many tens of thousands from numerous friends and acquaintances.

That is the mark of a man in serious financial trouble due to short-term recklessness. Loaning money to him is like loaning money to any other gambling addict. Maybe he'll be able to pay and maybe he won't, but either way you're taking on serious risk. And you're potentially enabling him to get into even worse financial trouble, with bigger consequences and shadier lenders, by encouraging him to think that if he recklessly gambles away his money he can always borrow a huge pile of cash and then pay it off "whenever."

THAT is why this is an ethical problem. It's like loaning a drunk money at high interest because they drank away their rent money and now they need to pay rent. Maybe they agreed to it sober... but if so, that's only because they were in a state of desperation created by their own deeper problem. A problem which you are now in the position of profiteering off of.

[Darth Holbytlan]

Now I know some people object on ethical grounds to being paid the interest irregardless of whether the other lenders have been paid, so that's most probably a moot point to these people. However I am going to ask why, since it piqued my interest. So far I got that the rate is most probably illegal which was ridiculously easy to disprove with 5 minutes of google.

Many jurisdictions have usury laws that ban high interest rates, so it wasn't unreasonable to point out the potential problem. In any case, you may have spoken too soon regarding your disproof. Also found with <5 minutes of Google (you are in Australia, right?):

Credit provider obligations

Anyone who wants to engage in credit activities (including lenders, lessors and brokers) must be licensed with ASIC or be a representative of someone who is licensed (that is, they must either have their own licence or come under the umbrella of another licensee as an authorised credit representative or employee).

The law also states that credit providers must not enter into a contract with you that is unsuitable, such as a loan you can't repay without suffering hardship or a contract that doesn't meet your requirements and objectives.

By law the credit provider must:

Make reasonable inquiries about your financial situation, requirements and objectives
Take reasonable steps to verify your financial situation
Decide whether the credit contract you are asking for is 'not unsuitable' for you

Credit assistance providers must make a preliminary assessment and credit providers must make a final assessment that the credit contract you are applying for is 'not unsuitable' for you before they offer you credit.

Medium amount loans and all other loans

From 1 July 2013, the fees and charges allowed on loans of more than $2,000 are capped (that is, limited to a maximum amount).
Fee limits on medium amount loans ($2001-$5000)

From 1 July 2013, for 'medium amount' loans which are for amounts between $2,001 and $5,000 to be repaid between 16 days and 2 years, fees are limited to:

A one-off fee of $400
A maximum annual interest rate of 48%, including all other fees and charges

Now, I'm not a lawyer—I'm certainly not your lawyer—and this isn't the actual law, just an official advise page, but a straightforward reading of this would suggest that: 1. you should have been licensed, but weren't; 2. you should have properly evaluated his circumstances, including his ability to pay without suffering hardship, but did not; and 3. you should have charged a maximum of $400 + $2000*48%*2 mo/12 mo = $720 (simple interest).

Now, maybe there are exceptions for personal, one-on-one loans that weren't mentioned—I saw no sign of this, though—or maybe you didn't make the loan in Australia after all and this page is not applicable. But I had made this kind of loan and read this, I would consult a lawyer before even considering asking after the interest.

[mr friendly guy]

Interest at those levels is correlated with loans that cause demonstrable harm. Typically, they are enforced by means that are nearly or actually criminal in their scope. Even when not, they are near-universally not mutually beneficial. When they are paid back, the lender is the only one who benefits. The borrower almost always would be better off not having the money in the first place. In your circumstance, the borrower is essentially a gambler trying to cover his losses (which he failed to do anyway, so he realized no benefit from your loan demonstrably) so that he can either continue to gamble or hide the extent of his problem.

Harm in this case is viewed by the loan not netting them any financial benefit vs the cost of the loan. This introduces the concept of risk. A low interest rate loan into an investment which failed would also cause harm. Lets say both loans net the borrower the same loss in dollars, is one more harmful than the other? No. I would then argue the harm is due to the risk not paying off, and that to deny someone the option of taking out a loan with risk and all, runs counters the ethical right of autonomy.

Point 2, I find it amusing a lot of people disagree with Starglider on a lot of things, but here they now agree that forex is gambling. Lets put it this way. Would the bank lend you money (assuming a decent income) for an investment loan if you told them you were going to play the roulette table? Now would they lend it to you if you tell them you're going to invest in forex? The answer is clearly they would for the second. You might think its gambling, but every financial institution sees it as an investment (and I stated in the OP a risky one, hence justifying the high return), but you would hold a minority view if you think its the same as gambling.

Those who are willing to borrow under such terms are either uneducated, thus unable to provided informed consent to such a contract; desperate, thus unable to make a rational decision regarding the contract (your circumstance); or borrowing in bad faith, so actually unwilling to borrow at the specified terms (possibly your circumstance).

You forget, those willing to take high risk. But lets go on and think about the logical consequences of your statement in regards to "make a rational decision." In medicine someone can refuse treatment as long as their judgment is not impaired by say a psychiatric illness or some organic condition (eg delirium due to an infection). Requiring the decision to be rational in the standard definition of the word, ie logical is not required, or else we would essentially be violating someone's right to autonomy.

Essentially you're saying someone cannot make their own decision if you don't consider it rational. You might not think that when you wrote your spiel, but that is the logical consequences of your statement. If you say this is ok, then every decision which isn't purely rational is no longer allowed to be taken. A collector can not spend gazillions on a collector's item, because rationally the material cost used to make and the labour is not worth that much to give an example.

Participating in those loans is unethical because when it's made in good faith, it either A. Preys upon the defenseless, or B. Preys upon the desperate/addicted/cornered. Just because the person agreed to it (and in fact proposed it) does not make your behavior less predatory. When the mouse with toxoplasmosis runs toward the cat to be eaten, it is still prey. Either this guy never had the intention to pay you back as agreed (in which case you both acted like assholes), thought wrongly that he was going to make enough money to do it (in which case he's stupid, Doctor or not), or was so scared of his investment failing that he wasn't able to use good judgement and you became an enabler of his self-destructive decision.

A person making 6 figures of income is "defenseless," in regards to paying off money? A person takes a loss when investment doesn't go right, but that doesn't mean over time they cannot pay the loan back. I told him right off the bat, if your investment goes south I know you can afford to pay back based on your income, even if not within the agreed upon period.

Point 2. You do realise financial institutions make margin calls all the time right? Should margin loans be banned then because if the value of investment drops, the borrower will become "desperate and cornered" when the bank asks them to make a margin call. The reality is, when the bank makes a margin call, people have to find some other form of collateral.

Legal or no, if you had even basic concern for his well-being you wouldn't have participated in such anloan with him.

You guys would make great doctors .... in the 1960s with your view on paternalism. Or in the modern day, you guys would make great EU diplomats to Africa.

Let me ask: Would you lend to your brother at 2500% interest? Your best friend? A close friend? An old drinking buddy? At what point in the social relationship hierarchy would you be unwilling to take so much from a borrower?

That also applies to your position does it not? At what point is the interest rate too high? 10%. 20%. Is it dependent on inflation?
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I'd contend that such interest is not unethical for a small loan of little consequence (give me $50 to get this thing and I'lol give you $100 next week) but gets into that territory some point between $100 for a random person and multiple months rent for someone with a family and such an extensive gambling problem that it has rearranged their life in spite of their desperate stop-gap.

Here we get to the crux of the matter. If the interest of 100% on a $50 loan is not unethical, surely that is because you realise most people can pay that off. Going on if Bill Gates lost his wallet and needed $1000 to eat a Gordon Ramsay restaurant, and offered to pay the person lending him the money $5000 back next month, is that a problem? No because Gates can afford it. Now lets get to my case, why do you think someone who has paid $125 K in 4.5 months cannot afford to pay $2000 off sometime in the future?

1) An ethical loan, or any other contract, must be entered freely, as an informed decision by rational parties who intend to fulfill the contract.
2) Rational, informed people will not freely, intentionally enter into a one-sided contract that will predictably harm them.

I am going to stop you right here buddy. No one is fully Vulcan like rational, and expecting them to behave like that is an exercise in futility. If its unethical to enter into an agreement where one side isn't rational, then taking that to the logical alternative, why can't we force people to undergo life saving medical procedures? Should we force an adult Jehova's witness to undergo a blood transfusion if it will save their life? How about someone to take antibiotics who believe "Western medicine suxxs." I mean I had a patient who discharged himself with liver failure after we had saved his life, telling us he had a job interview, but he really went home and drank himself to death. Should we have held him against his will? After all, they aren't rational since they are making a decision which will harm them.

Should we also stop people voting for shitty politicians who act against their interests? The fact is, being rational in the sense of logical has never been a criteria from doing what they want to do.

What has been barriers to entering agreements are
a. Coercion (not in this case)
b. Deception (not in this case, I lent exactly the amount I said I would, and it does appear he is trying to pay off what he owes)
c. Impaired cognition via a medical condition (not in this case)
d. If what he did harm someone else

The fact is, if we step in to prevent people doing something which is irrational, and which we judge to be harmful (ie refusing medical treatment), then we will be violating the ethical principle of autonomy on a vast scale. Society judges this as not worth the cost and I would argue runs against the purpose of morality - to maximise human happiness.

3) Therefore, if such a harmful contract is entered, either...

3a) One of the signers was uninformed.
3b) One of the signers was not capable of making a rational decision.
3c) One of the signers was being coerced.
3d) One of the signers had no intention of fulfilling the contract.

Or reality isn't nice, and we can't predict or control events 100% to our liking. I think it was Steinbeck who coined the phrase "the best laid plans of mice and men often go astray." This is where risk comes in. Any fucking investment book will say that you should invest based on your risk profile. Some people are willing to take more risk than others. The contract went against him because his investment did not work out, and not because he can't pay back a loan.

We've got someone who knows more about high finance than almost any active poster on this forum pointing out that what the borrower was doing here is little different from gambling. That's the problematic thing here- the reason the guy borrowed the money on his own initiative is because he's been essentially gambling with large sums, and couldn't pay. Remember that he didn't just borrow the money from the original poster, he borrowed or tried to borrow many tens of thousands from numerous friends and acquaintances.

Sigh. Lets try this again. Ask a bank to borrow money for investment purposes. Tell them you are doing to play at the casino and see how far you get. Now tell them you're investing in forex. Guess which one they will lend to. Just because Starglider sees it that way, doesn't mean that most financial institutions will see it the same way. The fact that they will and did in this case to someone investing in forex should tell you something right there.

That is the mark of a man in serious financial trouble due to short-term recklessness. Loaning money to him is like loaning money to any other gambling addict. Maybe he'll be able to pay and maybe he won't, but either way you're taking on serious risk.

No shit it was a risk. That's why the rewards must be commiserate with the risk. This is like basic investing.

And you're potentially enabling him to get into even worse financial trouble, with bigger consequences and shadier lenders, by encouraging him to think that if he recklessly gambles away his money he can always borrow a huge pile of cash and then pay it off "whenever."

So we should ban margin loans then? This is a reasonable implication of your statement. After all, margin calls are made all the time on investment, and the person has to find collateral or sell the investment at a loss. Rather than just force them to sell, the bank allows them the option of wait for it.. "enabling them to get into even worse financial trouble with bigger consequences," especially if the investment continues to fall.

You guys do know what a margin loan is right?

THAT is why this is an ethical problem. It's like loaning a drunk money at high interest because they drank away their rent money and now they need to pay rent.

Except its not for rent. Its to make a margin call, something which happens in investment all the time. Its the risk with taking margin loans. If you are going to argue he "didn't know what he was getting into" then every financial institution is committing an ethics violation every time they lend to people.

Just for the record, I have also used margin loans in the past.

Frankly, I think he wants us all to be impressed by how smart and reasonable he is. Haven't you ever heard of humble-bragging?

Did I tell you the time I saved planet Earth from invading aliens from the fifth dimension. It was dark foreboding night...
Although I do note you agree that its ok to enter into such an agreement. Whether its smart, time will tell. If it pays of, if it doesn't I just broke even.

Now, I'm not a lawyer—I'm certainly not your lawyer—and this isn't the actual law, just an official advise page, but a straightforward reading of this would suggest that: 1. you should have been licensed, but weren't; 2. you should have properly evaluated his circumstances, including his ability to pay without suffering hardship, but did not; and 3. you should have charged a maximum of $400 + $2000*48%*2 mo/12 mo = $720 (simple interest).

Er, you do realise he has managed to pay off $125 K in 4.5 months while looking after 2 dependents? I don't know how you manage your finances, but I going to say that someone who is earning 6 figures easily can afford to make that payment sometime in the future so I am going to say its not that much hardship at the present time.

[FireNexus]

Point 2, I find it amusing a lot of people disagree with Starglider on a lot of things, but here they now agree that forex is gambling.

I find it amusing that you're trying to invalidate the point by invoking people's disagreements with him on other subjects, a pattern I have never established. Especially when the subject in question falls square in the center of his professional expertise. I'd agree with your opinion on whether this mole on my elbow should be referred to a specialist, so I'll agree with him on whether forex trading constitutes gambling. Especially when the described behavior of the "trader" in question checks every single compulsive gambler box.

But, frankly, you're only casting shade on the idea because it being correct makes you incontrovertibly in the wrong.

Frankly, the rest of your response is simply a further attempt to justify your shitty behavior, and I feel no need to engage with it anymore. Since it started with attempting to discredit expert opinion regarding a key piece of the ethical puzzle here, and then proceeded to assume that the expert opinion was incorrect in order to invalidate the remainder of the points made, I don't think I'm out of line in refusing to bother.

[mr friendly guy]

Point 2, I find it amusing a lot of people disagree with Starglider on a lot of things, but here they now agree that forex is gambling.

I find it amusing that you're trying to invalidate the point by invoking people's disagreements with him on other subjects, a pattern I have never established. Especially when the subject in question falls square in the center of his professional expertise. I'd agree with your opinion on whether this mole on my elbow should be referred to a specialist, so I'll agree with him on whether forex trading constitutes gambling. Especially when the described behavior of the "trader" in question checks every single compulsive gambler box.

Interesting that you kind of harp upon a minor point and ignore the rest of my post, which is really telling isn't it? Sure I will accept SJ's claim that Starglider is an expert (I know he is great on computers but I have no idea about his knowledge on investing) but you ignore the counter point that financial institutions, like almost everyone of them do not share the view that forex is the same as gambling. Just try taking out an investment loan for gambling at the casino vs investing in forex? Some people would get approval for the latter, zero people for the former.

What's really funny is that the behaviour you're describing of finding collateral happens all the time with margin loans. Do you even know what a margin loan is? No seriously. I don't think you have a fucking clue which is why you latched onto Starglider expert line.

Frankly, the rest of your response is simply a further attempt to justify your shitty behavior, and I feel no need to engage with it anymore. Since it started with attempting to discredit expert opinion regarding a key piece of the ethical puzzle here, and then proceeded to assume that the expert opinion was incorrect in order to invalidate the remainder of the points made, I don't think I'm out of line in refusing to bother.

Translation, you're aren't even going to try and argue the other parts which don't rely on Starglider being an expert. Like the point where I asked why do you think someone who can pay $125 K in a bit over 4 months would struggle to pay $2 k. Do you need Starglider's expert opinion to buttress that argument too?

[FireNexus]

Sure I will accept SJ's claim that Starglider is an expert (I know he is great on computers but I have no idea about his knowledge on investing) but you ignore the counter point that financial institutions, like almost everyone of them do not share the view that forex is the same as gambling

My understanding (I've looked at his LinkedIn to see if he was still in AI research) is that he is currently and for several years employees as a software engineer developing automated trading software. There literally is nobody on the board more qualified to decide if a specific type of tradin constitutes a manageable level of risk, or essentially gambling.

The key reason I ignored the rest of your post is that every point made is only meaningful if your assertion, directly contradicted by someone who has the training and experience you lack to make that call, is not a form of high-dollar gambling. Perhaps the man himself can back up or disabuse me of that assertion.

***Tag Quote***

If Forex trading is gambling without significant training, you are unambiguously an asshole. There's is no justification for lending to someone at a usurious rate to help them cover their gambling losses. That's the whole argument. It would be like having an argument with Starglider about whether it's cool to skip your kid's vaccines, and he refuses to acknowledge your ability to positively establish their safety profile and the relative risks. Every argument he would make after "vaccines are unsafe" would be pointless to engage. The expert would have said that this premise is false, and therefore the arguments which require it to be true to carry moral weight would be a wall of ignorance. A tactic you seem somewhat fond of using in your efforts to justify being a shitty person.

Again, every part "not requiring" Starglider to be an expert is invalidated because no matter his ability to pay your specific loan, the loan itself has a usurious rate of interest and was donated to shore up gambling debts from an addictive behavior pattern. Any loan for that purpose is ethically questionable. A usurious loan during a period where the gambler has gotten into so much trouble they may have to radically alter their life is unquestionably shitty.

Perhaps the size of the loan is small enough to not count under meaningful usury, in his basic financial circumstances. But the stated purpose of the loan, and the circumstances known about it, make you either fucking stupid, evil, or both for getting involved. I'm not sure whether your professed stupid view is due to just being stupid or due to attempting to shirk feeling remorse for enabling a high stakes gambler with children in order to enrich yourself, but it almost doesn't matter. What you did was wrong if forex is gambling, and forex is gambling as much as daytrading or horse racing is. You can give any justification you like for usury, but even the semi-valid ones are invalid if the borrower is a junkie.

[FireNexus]

Also, asshole, I know precisely what a margin loan is. It's a tool for leveraged trading. Meaning not only was he gambling, he was already getting in debt up to his eyeballs to do it. You know why you can get a margin account for any kind of trading and not for slots? Because there is collateral to seize which may cover some or all of the loss in the case of trading lines of credit. It has nothing to do with the inherent wisdom of some random asshole getting involved. It has to do with the likelihood of losing the entire loan amount if shit goes bad. That's why margin calls happen when your position worsens. It's a tactic to stem the bleeding and prevent even further losses.

That lending to a day trader isn't as risky as lending to a blackjack player in no implies the behavior itself is any less risky. Claiming its approval absolves the trading activity of a gambling classification shows that you know in theory what such an instrument is, but don't really get why it might be approved despite the very high likelihood that the trader will get fucked sideways. Please don't try to insult my intelligence by saying stupid shit. I latched into Starglider as an expert because he's a professional involved in the design of trading algorithms, meaning he is much better positioned to make the call than I am. Not because I'm a slobbering know-nothing making an ethical claim out of thin air, fuckface.

I know that measles is contagious and refusing to vaccinate is a public health danger, too. Leaning on you as an expert (though given this conversation I'd be reluctant to accept treatment from you, or even at your hospital) doesn't imply that I don't know my ass from a virus.

[FireNexus]

Same basic reason it's easier to get a mortgage than a business loan for a drop-shipping business. Because one gives the bank some kind of valuable asset to offset their losses, and the other leaves the bank with their dick out. Do you even know what collateral is? Ya prick.

[Starglider]

Would the bank lend you money (assuming a decent income) for an investment loan if you told them you were going to play the roulette table? Now would they lend it to you if you tell them you're going to invest in forex? The answer is clearly they would for the second.

There is a critical difference you are missing, which is the difference between secured and unsecured lending. No bank would make an unsecured loan to an individual money for the explicit purpose of FX trading, or any similarly risky investment. They will make small unsecured loans with no explicit purpose, solely based on your credit rating, but that is not what we are talking about here. Trading on the margin is secured lending; you borrow the principal, but the brokerage keeps ownership of the instruments. When the position is liquidated, the broker gets the principal back first, before you get any profits. The brokerage avoids the possibility of loss by requiring the borrower to post collateral when they take the loan; a margin call means that the potential loss is about to exceed your posted collateral, e.g. the broker will be at risk of losing money, not just the trader. If you fail to make the call, the brokerage will immediately liquidate the position and hit the trader with commission fees to cover their trouble, usually making a (small) profit. Even for giant investment banks with AA credit ratings, the amount of direct capital they can raise with unsecured borrowing is a small fraction of the amount they can raise with secured lending trades (and that's before netting and rehypothecation crank up the leverage).

You might think its gambling, but every financial institution sees it as an investment (and I stated in the OP a risky one, hence justifying the high return), but you would hold a minority view if you think its the same as gambling.

That is the exact line (among many) used by all sorts of FX day trader parasites, from the ones that just provide the gambling platform to the ones that actively sucker people with supposedly infallible bots and strategies. Banks and hedge funds operate in a completely different league to individual traders. The commissions are much smaller, the access to market is much faster, the trading options much wider (especitally with dark pools, although that is less relevant for FX), the risk management is vastly more sophisticated, and critically banks have a lot more information (from trade flow). Even with all of that, banks do not take outright delta positions on FX; they make money via flow trading and maybe a modest vol position (strictly they aren't even supposed to do that, but everyone has their own skew models). Even hedge funds only tend to take long term cash FX positions as part of complicated mutli-asset-class portfolios; these days most institutional FX buy side is HFT (high frequency trading, which you absolutely cannot make money out of in the cash asset class as an amateur). When I was working on FX options HFT myself, everyone in the banks considered day traders to be suckers to be taken for all their capital; not that it was even worth doing it directly, but the brokerages hyping up the day trading lifestyle are major customers.

In short, if you as an individual amateur are going to go up against organisations with hundreds of brilliant traders supported by thousands of analysts and billions of capital, with grids of thousands of servers optimising their strategies, and dedicated fibre-optic pipes plus explicit peaks into the liquidity stack courtesty of exchanges... the results will be pretty much what a sane person would expect: roulette. It's only intense competition that keeps the number of zeros on the wheel down to a single slot.

That's not to say that personal day trading can't work. Just that FX cash is pretty much the worst asset class to do it in, because there's so little scope to know things that the rest of the market doesn't, or develop strategies that the larger players haven't already thought of and exploited (to the extreme, probably with HFT bots). Even stocks and commodities at least have more psychological effects and biases to try and exploit than FX.

Point 2. You do realise financial institutions make margin calls all the time right? Should margin loans be banned then because if the value of investment drops, the borrower will become "desperate and cornered" when the bank asks them to make a margin call. The reality is, when the bank makes a margin call, people have to find some other form of collateral.

Margin calls often seem to be over-dramatised. For traders with a direct license on a major exchange it's a big deal, because if they miss the margin call they'll usually lose their license and thus job. For the average day trader going through a brokerage, missing a margin call just means your position gets closed, and worst case your credit card gets hit with some excess fees. You may not even lose your brokerage account, and if you do you can just sign up with someone else. So usually when an amateur trader is complaining about a margin call, they just mean that one of their bets has gone bad and they're going to lose all the collateral they posted. Generally this means they should take the loss and reflect on whatever poor investment strategy they were attempting. Borrowing money externally to meet the margin call is essentially just martingale betting, hoping to win more than the initial loss plus the additional borrowing. Sometimes people get lucky of course but usually this is delusional (liquidity issues in complex positions excluded; I am talking about a pure solvency issue).

[bilateralrope]

mr friendly guy, after reading the responses in this thread, I'm changing my advise to you:

First you need contact a lawyer to see how legal your loan is. If you're only allowed to charge x% interest, then you need to reduce the amount the person owes you until it is at that amount. Tell him you are reducing how much he owes you. If the entire loan is illegal, you'll need the lawyer to figure out what your current options are. Listen to the lawyer.

Second, good advise to people who are paying off multiple loans is to first make the minimum payments for everything, then focus on the loans charging the highest rate of interest first. While you are charging a high interest rate, you aren't charging any compound interest, so I'd be treating your loan as a 0% interest loan because the amount owed isn't increasing over time. Thus you should expect to be one of the last people he pays back. So don't even ask him about when he's planning to pay you until the rest of his debt is cleared or he starts piling on more debt.

[Ralin]

We've got someone who knows more about high finance than almost any active poster on this forum pointing out that what the borrower was doing here is little different from gambling.

Yeah, and knowledgeable high finance guy flat out said he's surprised that the guy actually paid back most of what he owes already, within a month no less. Which shows you right there that knowledgeable high finance guy's read on the situation is flawed.

That's the problematic thing here- the reason the guy borrowed the money on his own initiative is because he's been essentially gambling with large sums, and couldn't pay. Remember that he didn't just borrow the money from the original poster, he borrowed or tried to borrow many tens of thousands from numerous friends and acquaintances.

That is the mark of a man in serious financial trouble due to short-term recklessness. Loaning money to him is like loaning money to any other gambling addict.

It's not reckless when you have the ability to pay that money back if everything goes to hell and you know it. Which doctor guy did. Clearly he had the income to handle the loss and still meet his obligations, as again, he has.

Maybe he'll be able to pay and maybe he won't, but either way you're taking on serious risk. And you're potentially enabling him to get into even worse financial trouble, with bigger consequences and shadier lenders, by encouraging him to think that if he recklessly gambles away his money he can always borrow a huge pile of cash and then pay it off "whenever."

THAT is why this is an ethical problem. It's like loaning a drunk money at high interest because they drank away their rent money and now they need to pay rent. Maybe they agreed to it sober... but if so, that's only because they were in a state of desperation created by their own deeper problem. A problem which you are now in the position of profiteering off of.

Except none of those things happened and by all appearances doctor guy had reason to believe he could handle the consequences of betting wrong. It's not reckless when you have the means to recover from the loss. You keep acting like the guy was risking financial ruin if his investment fuckery didn't pay off when in practice he was risking what amounts to having to pull a lot of extra hours at work.

[Starglider]

Yeah, and knowledgeable high finance guy flat out said he's surprised that the guy actually paid back most of what he owes already, within a month no less. Which shows you right there that knowledgeable high finance guy's read on the situation is flawed.

Obviously I have no idea who this person is and whether they're doing it casually or compulsively. I can only generalise across the class of amateurs who try to make money trading cash FX.

I personally traded commodities for a while when I was newer to finance, mostly to get an idea of what it's like for the professionals I was working with. I made a slight profit but in retrospect that was just luck, I certainly didn't have any knowledge that the rest of the market didn't. I always closed out positions myself well before the possibility of a margin call, because I'm not an idiot.

[mr friendly guy]

The key reason I ignored the rest of your post is that every point made is only meaningful if your assertion, directly contradicted by someone who has the training and experience you lack to make that call, is not a form of high-dollar gambling. Perhaps the man himself can back up or disabuse me of that assertion.

Every point? Ha ha ha. How about the point that the loan isn't much of a hardship because of his income? You remember that part don't you? Come on shit for brains, drag up those brain cells of yours.

Looking on it seems that you only addressed in this reply and not the previous one. Better late than never arsehole.

If Forex trading is gambling without significant training, you are unambiguously an asshole. There's is no justification for lending to someone at a usurious rate to help them cover their gambling losses. That's the whole argument. It would be like having an argument with Starglider about whether it's cool to skip your kid's vaccines, and he refuses to acknowledge your ability to positively establish their safety profile and the relative risks. Every argument he would make after "vaccines are unsafe" would be pointless to engage. The expert would have said that this premise is false, and therefore the arguments which require it to be true to carry moral weight would be a wall of ignorance. A tactic you seem somewhat fond of using in your efforts to justify being a shitty person.

Jesus fucking Christ on a pogo stick. You again ignored it when its pointed out most financial institutions don't see it his way. Using that logic, I can ignore all your gambling claims because I found my own experts.

Again, every part "not requiring" Starglider to be an expert is invalidated because no matter his ability to pay your specific loan, the loan itself has a usurious rate of interest and was donated to shore up gambling debts from an addictive behavior pattern. Any loan for that purpose is ethically questionable. A usurious loan during a period where the gambler has gotten into so much trouble they may have to radically alter their life is unquestionably shitty.

Again can you explain how a person who can pay $125 K in under 5 months will struggle to pay $2000. This shouldn't be too hard for you genius. Oh wait, who am I kidding here.

Perhaps the size of the loan is small enough to not count under meaningful usury, in his basic financial circumstances.

Wow, really. You catch on real quick sonny. It took you long enough to figure out someone making 6 figures can pay off $2000. Can you walk me through the reasoning?I wondered how many missteps and jerking off to the gambling junkie you needed to go through to reach that conclusion.

But the stated purpose of the loan, and the circumstances known about it, make you either fucking stupid, evil, or both for getting involved.

Got me there. Two adults of entering into an agreement. Oh the humanity. If only paternalism ruled. What a paradise that would be.

What you did was wrong if forex is gambling, and forex is gambling as much as daytrading or horse racing is. You can give any justification you like for usury, but even the semi-valid ones are invalid if the borrower is a junkie.

Your premise of gambling junkie is based on an off the cuff statement Starglider made. Since you like quoting him so much, here is one for you.

Yeah, and knowledgeable high finance guy flat out said he's surprised that the guy actually paid back most of what he owes already, within a month no less. Which shows you right there that knowledgeable high finance guy's read on the situation is flawed.

Obviously I have no idea who this person is and whether they're doing it casually or compulsively. I can only generalise across the class of amateurs who try to make money trading cash FX.

In other words he has no idea whether this guy is gambling compulsively, you know, what a junkie does, and he is just generalising. It might make him right a lot of the time, but not this time.

Thanks for playing loser. Ha ha ha. Wait, you're going to ignore that statement because it doesn't suit your position, right arsehole. Go on, ignore it like the chickenshit you are. It just makes it soooooo much more funnier.

Also, asshole, I know precisely what a margin loan is.

Wow me with your superior knowledge genius. This should be amusing.

It's a tool for leveraged trading. Meaning not only was he gambling, he was already getting in debt up to his eyeballs to do it. You know why you can get a margin account for any kind of trading and not for slots? Because there is collateral to seize which may cover some or all of the loss in the case of trading lines of credit. It has nothing to do with the inherent wisdom of some random asshole getting involved. It has to do with the likelihood of losing the entire loan amount if shit goes bad. That's why margin calls happen when your position worsens. It's a tactic to stem the bleeding and prevent even further losses.

Then you know under your own logic, that when a margin call occurs, the bank allows the person to make the situation worse, but putting more money in a bid to avoid the effect of the call right? Meaning under YOUR FUCKING LOGIC, by allowing you to avoid the option of liquidating your assets during a margin call, it makes the situation worse for this "gambler."

So I ask again, it a margin loan ethically wrong? I guess it must be hard for an upright man like yourself to live in such a unethical world isn't it? Oh the humanity, how do you cope.

That lending to a day trader isn't as risky as lending to a blackjack player in no implies the behavior itself is any less risky. Claiming its approval absolves the trading activity of a gambling classification shows that you know in theory what such an instrument is, but don't really get why it might be approved despite the very high likelihood that the trader will get fucked sideways.

How do you ever cope living in a world where banks can do immoral shit like margin lending.

Please don't try to insult my intelligence by saying stupid shit.

My irony meter just broke.

I latched into Starglider as an expert because he's a professional involved in the design of trading algorithms, meaning he is much better positioned to make the call than I am. Not because I'm a slobbering know-nothing making an ethical claim out of thin air, fuckface.

You do realise he admitted he was generalising about gambling right? Right?

I know that measles is contagious and refusing to vaccinate is a public health danger, too. Leaning on you as an expert (though given this conversation I'd be reluctant to accept treatment from you, or even at your hospital) doesn't imply that I don't know my ass from a virus.

Oh noes, dumbshit boy attacks my professional skills. How ever will I recover from such an insult? I guess I can take solace from the fact we saved a man last year with 30 minutes of CPR, and knowing he would at least appreciate my efforts.

Hang on a minute, I know. I will point out its your right to refuse treatment from me or anyone else you don't like. Because I am not a paternalistic arsehole like you. I would never dream of violating your right of autonomy unless you're actively causing harm. If you don't want treatment, go knock yourself out, and I am sure the world would be better for it. Its just a shame you won't extend the same fucking right to people you paternalistic douchebag.

Same basic reason it's easier to get a mortgage than a business loan for a drop-shipping business. Because one gives the bank some kind of valuable asset to offset their losses, and the other leaves the bank with their dick out. Do you even know what collateral is? Ya prick.

Don't tell me, I will get this. Collateral...um...um... oh I know, its that thing FireNexus doesn't have, and never likely will. How did I do?

[mr friendly guy]

Except none of those things happened and by all appearances doctor guy had reason to believe he could handle the consequences of betting wrong. It's not reckless when you have the means to recover from the loss. You keep acting like the guy was risking financial ruin if his investment fuckery didn't pay off when in practice he was risking what amounts to having to pull a lot of extra hours at work.

The funny thing is, the average house price in Perth (our city) is $550,000 AUD.
https://www.echoice.com.au/news/home-lo ... BNIseh96Uk

That's easily bigger than his debt. It sucks that one's investment turns sour. It will set even someone on a 6 figure income back a few years of saving. But hardly ruinous.

Obviously I didn't expect him to pay everything back immediately, but it clearly isn't beyond him given time.

It's totally appropriate to have a discussion with him and about how and when he's going to pay back. Agree something. Get it written down and hold him to it.

It sounds like he's not hurting enough that he can't pay back. Perhaps let him pay in instalments rather than a big lump sum?

I actually decided to take your advice. I contacted him, asked him would he prefer to pay in instalments, and he said he would prefer to pay it all back at the end of December.

Amazing as it sounds, some people actually are willing to pay their debt.

[Thanas]

This is dodgy as hell.

If this were in Germany it would be illegal and you would have no recourse to get the interest. This is the definition of acting in bad faith and committing usury in german law, which makes the underlying contract null and void. You are lucky you got anything back. German courts have repeatedly held that interest higher than double the market rate are unethical and illegal. As I doubt the market rate is 25% in Australia, this makes this "contract" unethical and exploitative in these German eyes.

Of course the legal situation might be different in Australia but the moral judgement remains the same.

[Simon_Jester]

FriendlyGuy, Lots of people are willing to pay debts.

Very few of them are (a) reckless enough to get into situations where they need a hundred thousand dollars in fast cash, AND (b) actually capable of repaying the loans once they obtain the fast cash. That is rare.

The ethical principles around lending are based on not just one or two people at a time, but the broad category of all borrowers integrated over time.

You lent to someone who gambles recklessly with their money, who does not have the expertise and the resources to have security in their investment. Someone who takes on uncontrolled risk, and allows this risk to build up out of control until a margin call blows them out of the water.

If they have not decided to stop this behavior, they are likely to continue their reckless trading. If so, it is only a matter of time until they manage to lose enough money that it becomes an actual problem even for them. And in the long run, their resources will be drained in terms of retirement and what they can pass on to their children.

Enabling this person's reckless trading, from which they cannot realistically expect to profit through their own efforts, is not doing him a favor. It is merely an attempt on your part to opportunistically profit from his bad decision.

[FireNexus]

Again, Mr fuckface, you cherrypick specific statements from Starglider that cast doubt on the idea that this man's behavior in this specific instance is gambling, while ignoring that his posts have made clear that individual forex trading with private accounts is unlikely to be anything else. The doubt cast is minimal though, because the guy is acting like a gambler in over his head. No amount of doubt is going to override the very gambling-addict behavior of trying to get $100,000 in loans from a dozen people (at least one of which he has only a cursory relationship) and completely rearranging his life to make up for his huge fuckup. He managed to pay you back, sure. But he had to change jobs and pick up a second one to do it. He might have learned his lesson about being an idiot gambler, but it doesn't make him not an idiot gambler.

To return to the vaccine analogy, Starglider was basically saying "I dunno, this kid could have an egg allergy or immune system disorder that makes the vaccine somewhat less safe for him" and you've seized on it as evidence that vaccines are actually harmful in general. And you haven't even established that the particular harm in question applies in this situation. So, you're still ignoring expert opinion on the subject, but you're doing so by seizing on the hedging language that any expert would use to describe a situation which follows a standard pattern which the unknown complexities of the human condition makes uncertain in any specific instance. Of course you'll arrogantly pretend, again, that this is not what you're doing. I'd expect nothing less from someone who is so proud of himself.

And you're still pretending, despite the expert disagreement, that the willingness of a bank to loan disputes the characterization of the behavior as gambling. The reason why that is not the case has been explained, and you've flippantly dismissed it.

Don't tell me, I will get this. Collateral...um...um... oh I know, its that thing FireNexus doesn't have, and never likely will. How did I do?

You've disregarded, repeatedly, my own and the expert's claim that your counterargument regarding lending practices is invalid due to the nature of those practices. Then you attempted to insult me by calling me poor (an accurate, but meaningless, assessment of my financial state). Concession accepted.

As far as casting aspersionss on your professional skills, I apologize. I was attempting to cast aspersions on your intelligence, but I've been informed elsewhere that one doesn't actually need to be all that intelligent to be good at what you do. So you're probably pretty good at it. I was out of line to suggest otherwise.

[FireNexus]

Seriously, the title of this thread is a metaphor using an indisputably unethical practice to describe your situation. And you're calling me "paternalistic" for defending a position that your behavior is unethical by using the actual public interest reasoning for restricting the practice generally, and the expert opinion of someone in a position to know (something you keep trying to imply makes me... stupid? Wrong? Unsportsmanlike? I dunno. It really seems to be pissing you off for no reason that I'm leaning on expert opinion rather than disputing it because it's inconvenient like you do.) that the actions leading to the loan are akin to gambling.

You know it's wrong, or you wouldn't have called it what you did, and you're just mad that you're being called out for it.

[mr friendly guy]

Again, Mr fuckface, you cherrypick specific statements from Starglider that cast doubt on the idea that this man's behavior in this specific instance is gambling, while ignoring that his posts have made clear that individual forex trading with private accounts is unlikely to be anything else. The doubt cast is minimal though, because the guy is acting like a gambler in over his head.

Being able to pay it off = getting over his head. From the guy who was too stupid to figure out that a person who can pay $125 k off in a few months can eventually off $2000 given time. I eagerly await the next line of bullshit you will say.

No amount of doubt is going to override the very gambling-addict behavior of trying to get $100,000 in loans from a dozen people (at least one of which he has only a cursory relationship) and completely rearranging his life to make up for his huge fuckup. He managed to pay you back, sure. But he had to change jobs and pick up a second one to do it. He might have learned his lesson about being an idiot gambler, but it doesn't make him not an idiot gambler.

Aside from the fact that gamblers aren't the only one who have to come up with cash on short notice, so do investors. Moreover addicts keep on building up debt, yet he has been paying it back. But don't let reality stop you dipshit.

To return to the vaccine analogy, Starglider was basically saying "I dunno, this kid could have an egg allergy or immune system disorder that makes the vaccine somewhat less safe for him" and you've seized on it as evidence that vaccines are actually harmful in general.

Ha ha ha ha ha. No shit for brains, I am saying IN THIS CASE, not a generalised case, not every case you fuckwit.

And you haven't even established that the particular harm in question applies in this situation.

Because I am not the one using the vaccine analogy moron.

So, you're still ignoring expert opinion on the subject, but you're doing so by seizing on the hedging language that any expert would use to describe a situation which follows a standard pattern which the unknown complexities of the human condition makes uncertain in any specific instance. Of course you'll arrogantly pretend, again, that this is not what you're doing. I'd expect nothing less from someone who is so proud of himself.

You mean how you like ignore the fact that banks will consider forex under investment and not gambling. I know you're stupid and all that, so I am going to explain it slooowly just for you. You see, words have meaning. Got that? Good. When you use words in a way not usually understood, you can achieve an effect of emotive language but with an underlying idea still being flawed. So an atheist has just as much faith in physics as a theist in god, when we play around with the word faith, even though the former is based on empirical observations, and the latter is based on unproven premise.

Lets go on. When people use the term gambling, its commonly understood to refer to activities which include things like betting on horse racing, casino games to name a few. Sure you can redefine it to include playing video games and then vilify gamers as gambling addicts, but that's kind of obvious. The fact is, financial institutions will lend to forex under investment loans, and will not for playing casino games, although you might be able to get a personal loan to do so. By characterising an investment as gambling, you're doing the same emotive language trick, tricks I might add which were obvious to high schoolers, at least in my country because we were kind of taught these rhetorical tricks in writing.

You have continued to ignore this point that in favour of jerking off to the word gambling. Not mention that in your wacky world, someone paying off debt = gambling addicted junkie, to name another example of how you twist the meaning of words.

And you're still pretending, despite the expert disagreement, that the willingness of a bank to loan disputes the characterization of the behavior as gambling. The reason why that is not the case has been explained, and you've flippantly dismissed it.

No dipshit, I dispute Forex trading as gambling moron based on the fact banks allow investment loans in forex and not to play casino games. I dispute his behaviour as that of a gambling addict junkie because he is paying his debt back. The strawmen just keep on coming don't they? Now you're just conflating the two positions.

You've disregarded, repeatedly, my own and the expert's claim that your counterargument regarding lending practices is invalid due to the nature of those practices. Then you attempted to insult me by calling me poor (an accurate, but meaningless, assessment of my financial state). Concession accepted.

I will add more to that Mr Snowflake. Because it seems you're allowed to insult my profession skills which has nothing to do with the topic at hand, but if I insult you back about something not relevant to the topic at hand, I lost the argument. Would you like a safe space too Snowflake?

BTW - When I made that collateral insult in response to your insult, I had no idea your financial situation isn't great. Sorry to hear that. Though that might explain why you find it so mind boggling that someone is willing to pay back their debts. Its almost like you're projecting your own inability unwillingness to pay back.

As far as casting aspersionss on your professional skills, I apologize.

Well its not like your opinion on medicine is better than your opinion on finance or on anything involving logical thinking for that matter. No harm done.

I was attempting to cast aspersions on your intelligence, but I've been informed elsewhere that one doesn't actually need to be all that intelligent to be good at what you do. So you're probably pretty good at it. I was out of line to suggest otherwise.

One doesn't have to be Sheldon Cooper level of intelligence to do what I do. That's true. But I think you need a tad bit more intelligence than someone who fails to realise that a person paying $125 K off in a few months can pay off $2000. Just saying.

Seriously, the title of this thread is a metaphor using an indisputably unethical practice to describe your situation. And you're calling me "paternalistic" for defending a position that your behavior is unethical by using the actual public interest reasoning for restricting the practice generally, and the expert opinion of someone in a position to know (something you keep trying to imply makes me... stupid? Wrong? Unsportsmanlike? I dunno. It really seems to be pissing you off for no reason that I'm leaning on expert opinion rather than disputing it because it's inconvenient like you do.) that the actions leading to the loan are akin to gambling.

No moron. I am calling you and Simon paternalistic because you won't allow people to enter into agreements when neither party is coerced on the grounds that its considered by you two to be "irrational." Thank goodness you don't have the power to do anything about it aside from making a fool of yourself, because I shudder what you would consider irrational, given that apparently you think trying to cover a margin call in ONE investment = pattern of gambling addiction.

You know it's wrong, or you wouldn't have called it what you did, and you're just mad that you're being called out for it.

Hmm. From the OP "And I have somehow found myself being the loan shark. Sort of." Reading comprehension isn't your strong point is it? Not to mention your inability to pick up the tongue in cheek way it was phrased.

FriendlyGuy, Lots of people are willing to pay debts.

Very few of them are (a) reckless enough to get into situations where they need a hundred thousand dollars in fast cash, AND (b) actually capable of repaying the loans once they obtain the fast cash. That is rare.

The ethical principles around lending are based on not just one or two people at a time, but the broad category of all borrowers integrated over time.

You lent to someone who gambles recklessly with their money, who does not have the expertise and the resources to have security in their investment. Someone who takes on uncontrolled risk, and allows this risk to build up out of control until a margin call blows them out of the water.

If they have not decided to stop this behavior, they are likely to continue their reckless trading. If so, it is only a matter of time until they manage to lose enough money that it becomes an actual problem even for them. And in the long run, their resources will be drained in terms of retirement and what they can pass on to their children.

Enabling this person's reckless trading, from which they cannot realistically expect to profit through their own efforts, is not doing him a favor. It is merely an attempt on your part to opportunistically profit from his bad decision.

So like banks then, only they lend more and have a lower interest rate, with him paying more interest to the bank than me. However as noted, the same problem arises. They keep on lending to allow them to feed this "gambling activity." When a margin call occurs, the bank allows borrowers to put more money into the loan to avoid the affects of the margin call. If borrowers had kept some of their own money elsewhere (as advised) and then use it of avoid the margin call, is it still unethical for the bank to keep doing lending and benefiting from the monthly interest. And if you say, well the amount isn't the same as in my OP, then what happens if margin calls occur every few months where the borrower has had time to build up another batch of cash, and does the same thing. Rinse and repeat until it matches the same amount.

I asked before, but I would like you to confirm it so that there is no ambiguity, because I know Firenexus won't have the honesty to, do you consider lending money to investment immoral on the ground that it feeds their "gambling activity?" And if you say that depends on what they're putting their money into, what happens if even less risky investments tank? Does it count as "gambling activity?" Because it seems to me, you count the activities in the OP as reckless based on the fact he lost and he was leveraged heavily (feel free to correct me if I misinterpreted you). The fact remains, even less risky investments can be leveraged heavily and if they tank, is the bank ethically responsible for continuing to lend money?

[Simon_Jester]

I consider investments that are not hedged against reasonable risk to be a form of gambling.

The greatest thing that distinguishes an investor from a gambler is risk management. NOT expert knowledge, risk management.

People who bet on sports teams and horses often have a lot of expert knowledge about the things they bet on. What they rarely if ever do is act to manage risk. The crudest of all risk management strategies is to simply never bet anything you don't mind losing, which is relatively common. But more advanced strategies (like diversifying, like taking out countervailing positions so that you don't lose everything when the commodity you invest in doesn't move the way you expect it to) are the province of people with specific training in investment, and take work.

Since most people gamble as a hobby, and are at best semi-literate in mathematics, they don't even try to use such strategies.

Lending money to an investor who does not secure their positions is little or no different from lending money to a gambler. And banks don't bother. If they want to directly or indirectly make money off of investors, they have access to professional investors (brokers, etc.) who know how to invest money safely without losing their shirt (and by extension, the bank's shirt).

Now, as Starglider says, they might loan you money, based purely on your credit rating, without asking why. But they won't loan you the money if they know you're going to (literally) gamble it away on the stock market.

Among other reasons, because yes, the bank is ethically responsible if they help someone financially ruin themselves by engaging in overly leveraged investments without adequate measures to secure their position against risk.

[FireNexus]

Two things, then I'm done with your wall of ignorance.

No dipshit, I dispute Forex trading as gambling moron based on the fact banks allow investment loans in forex and not to play casino games. I dispute his behaviour as that of a gambling addict junkie because he is paying his debt back. The strawmen just keep on coming don't they? Now you're just conflating the two positions

As has been explained, repeatedly, and ignored by you, repeatedly, the lending behavior you describe on the part of banks has less to do with the high risk of such trading for the borrower (what we are calling gambling) and more to do with the risk to the lender (collateral).

It's not that the bank is saying the borrower isn't gambling, it's that if their gambling turns out to fuck them, the bank has relatively low losses. That's why the bank owns the traded instrument, that's why the leverage requires you to put in money. The bank isn't saying that the trade is a good idea. The bank DOESN'T GIVE A FUCK. The only concern of the bank is whether or not they stand to lose money, and if so, how much.

Your seemingly willful refusal to acknowledge this very basic component of how banks judge loans, and continued assertion that the willingness of the bank to lend for an activity is a tacit admission that the activity is not a really stupid fucking idea is frankly bewildering.

Go ask for a home equity loan and tell the loan officer that you plan to use the money on slots. See how long it takes them to hand you the pen. It won't be very, because they're not on the hook when your bet goes bad. Then go ahead and ask them for an unsecured line of credit to go invest in forex. See again how quickly they tell you to go fuck yourself. That will be very.

I asked before, but I would like you to confirm it so that there is no ambiguity, because I know Firenexus won't have the honesty to, do you consider lending money to investment immoral on the ground that it feeds their "gambling activity?"

I'm happy to answer your dumbshit, besides the fucking point question. Margin lending to unlicensed, untrained amateurs is absolutely unethical. But we're taking about usury, not margin lending as a whole. And the bank does not give one ounce of shit whether or not the activity is ethical. They want to make a profit, and the extremely favorable terms with which they can margin lend make it not so risky and potentially very lucrative.

Is it legal? Do I stand to make a profit? How much risk is in play for the bank in particular if (when) dumbshit amateur fucks up? Those are the decision points for the bank. When they own the traded instruments and have some percentage of leveraged amount to hedge against potential losses, they stand to make a decent amount of money if the wheel lands on black and to lose very little if it doesn't. Because banks don't give a shit, and because dumbasses will do stupid shit that lets them take advantage, society has laws to protect them.

Your friend had to take on a second job and change main jobs to get out from under his gambling losses. He had to go to everyone he knows and borrow massive amounts of money at an insane interest rate, and has yet to be able to make good on those debts in full. You keep saying "He paid it back!" as if it completely invalidates the MASSIVE upheaval in his life that resulted in him doing so. You keep accusing me of selectively ignoring points I don't want to deal with, but the fact of his whole life getting turned upside down is established in the OP, and you have continually pretended that references to this were nothing but paternalism and assumptions that things must have gone bad. Things went bad. Maybe related directly, maybe not, though the timing implies there is a pretty strong correlation. You can't rightly claim that our characterization is inaccurate based on the known information, yet I'm sure you'll try.
-------
Otherwise, I really am done with you. You're a fucking moron who doesn't like being told he's in the wrong. Call me whatever names you like, because this just is not an argument worth being involved in anymore.

PS Re the insult: I said I'm poor, not that I don't pay my debts. I have a personal desire to avoid property ownership or long-term entanglements (including debt) which would usually be needed to have valuable collateral. I like to be able to pick up and go, but I'm not drowning. I've seen others drown, and people like you threw them overboard.