Haredi Rabbis Ban Foreign Currency Trading

Foreign currency trading like "violating Shabbat."

Rabbis: Forex Is Like Violating Sabbath
Sarit Menahem • Ha'aretz

Leaders of the extremist ultra-Orthodox Eda Haredit strongly denounced the practice of home foreign currency trading, saying they take the matter as seriously as violations of the Sabbath.

"Many people are tempted to start off by playing 'demo' games, and when success shines on them, they start actually trading. From here, the path to losses can be short, and the investor can lose everything," said the dayanim ("judges") on the Eda Haredit rabbinic court in Jerusalem last week.

They called for "decisive action" against the phenomenon, such as the protests against parking lots and factories that are open on the Sabbath. Jerusalem has seen weekly protests over the latter two issues, some of which have turned violent.

The declaration came during a run-of-the-mill case involving a delinquent loan, the weekly Bakehila reported. The complainant had loaned NIS 100,000 to the defendant, the owner of a charity. However, the second man invested all the money through a forex company, and lost it all.

Rabbis Moishe Sternbuch and Yaakov Mendel Yurovitch said foreign currency trading should not be discussed for any reason other than making a living - meaning, gambling is off-limits.

The Haredi community in particular has been hard-hit by the growth of forex companies, since many young people see them as an opportunity to improve their modest lifestyles.

"These are young people who already have two or three children, and several more on the way," said a source from the community. "They know that in another 20 years they'll need to marry the children off. The average Haredi wedding costs about $60,000. It's very hard to save this money from manual labor, and safe investments offer low interest rates, so they look to make quick, easy money. The foreign exchange companies offer them insane quantities of leverage - you can put up $2,000 but trade $2 million. Many ultra-Orthodox are tempted, because in theory, you can double your money in two minutes."

Not surprisingly, many people lost big trying.

[Hat Tip: CS.]

Comments

[Dr. Dave]

Many lost big thanks to major currency manipulators such as George Soros, a decidedly non - hareidi Jew.

[Bill]

My, oh my.

Being Hareidi ain't what it used to be.

First "no sex with little boys." Now no more gambling.

What's next? No more wife-beating?

Might as well be a Gentile if you're gonna have all these restrictions....

[Yisroel Pensack]

Poor 'em spiel.

[Avrumy]

Wow! First honest work is out, now get rich quick schemes that don't work are out too. These guys are trying to enforce the rules that the only acceptable form ob obtaining money is through shnorring.

[Norm]

How can you be the "owner" of a charity-do -you solicit donations-pay yourself a salary and then give a few bucks to some unlucky schmucks?

[harold]

many people lost big trying

I find it commendable to try to "stop the bleading" quickly. If you don't know what you are doing then Foreign Currency Trading is just like gambling.

[HaNavon]

are they saying that if i sell an item, i annot take indian rupees instead of dollars?
they did not go to the root of the problem, the problem is that you have these uneducated guy from boro park who don't know the first thing about economics and they lose 150,000 dollars in a day gambling. there are many people who can make money at this, but they have to have many, many years of study in economic theory before even opening up an account.

[Critical minyan]

I summarize this story as follows: Two guys came to a rebbe fighting over a forex transaction. Because the rebbe lacks a secular education his first instinct is, "assur".

[peter]

HaNavon!!!!!

most forex business is based on tricking beginners. they call them "mom and pop" accounts, and measure them by the size of the opening deposits. In general any account between $500 and $2000 is handled by a special team with the full expectation that the person will lose everything in the account.
This is nothing to do with education! Frum Jews will fare no worse or better than the millions of other people that are having their faces ripped off by these forex scumbags worldwide.
The rabbinate are just trying to stop people falling for the tricks. why would any of you do anything than fully support such an intelligent call. I wish the secular governments would ban this stuff. but they wont. i guess they are too enlightened (read fat on tax dollars)

[Dr. Bruce]

Why don't they ban having sex with boys instead of this?

[chabadnik attorney]

If yoiu can stiill type .... :)

[Daniel]

Scotty,

Who cares????? Macht l'chaim!!!!!

[Daniel]

And Chabad Attorney: From CH:
Yetshi adonayni, moraini v'rubainiiiiiii......

[Bilaam's Donkey]

Finally the Rabbis do some good. Forex trading is an easy way to poverty.

[chaim]

finally a ban that makes sense
statistics show that 98% of currency gamblers get wiped out witin 4 weeks

[rabbidw]

For that matter they could ban opening a restaurant. 80% of new restaurants fail within 2 years. It is one thing to point out that forex trading is not a short cut to riches and isv extremelt risky. It is another to say it is like chilul shabos.
And don't they say that finances are determined by God? So why should it matter that forex is risky? If God wants them to succeed they will. Obviously, they must be saying that God has HIS limits, and even HE cannot counter stupidity.

[shneerhere]

So, its a risky business. Why ban it? Rabbidw is right, restaurants fail all the time. Ban restaraunts? Since when does banning anything work? Wanna ban handguns? Chicago has had a total ban since 1982..... highest and second highest murder rate in the USA last decade. Wanna ban booze? Prohibition anyone?
How about this... let's ban rabbinic bans. We could start something novel... 'critical thinking'. You might be WRONG part of the time, but that called...... growing up.

[Chayim]

Charedim are doing very well financially. I live here in Brooklyn and I see Jewelery stores,silver stores and many of the high end linen and gift shops pact with chareidim. The economy here is doing well. Only reform jews,conservative Jews and modern orthodox are suffering. I got shelach monas gifts this year that costed hundreds of dollars each. They had crystal glasses and plates enclosed. People have tons of cash here. If you would see the incredible lavish tables of goodies here in Boro park and flatbush,you would know what I mean CHAREDI POWER NUMBER ONE.

[Anon]

Everything this "Chayim" writes is out of a Purim playbook!

"Charedim are doing very well financially."

So Chayim, then why do they come from Israel to shnor for every wedding they need to make?

"I live here in Brooklyn... The economy here is doing well."

Chayim, Planet Brooklyn's economy is doing just as poorly as the rest of the USA is doing right now. There are more people out of jobs now than any other time since the Great Depression.

"Only reform jews,conservative Jews and modern orthodox are suffering."

It's actually the opposite. Chareidi Jews have kids in kollel to support and those who lost their jobs are drowning! Those in kollel who live on tzedakah money are also drowning because there is not as much tzedakah money coming in because of the RECESSION which the USA is still in.

Also, ask anyone who raises money for Chareidi tzedakahs where the best place to collect money is and they will tell you - it's from the Modern Orthodox neighborhoods because they are the wealthiest among Jews who are willing to give to Chareidi tzedakahs. Reform and Conservative Jews are even wealthier (but they are generally not interested in supporting kollels). You don't get off Planet Brooklyn much, do you Chayim?

"I got shelach monas gifts this year that costed hundreds of dollars each. They had crystal glasses and plates enclosed. People have tons of cash here. If you would see the incredible lavish tables of goodies here in Boro park and flatbush,you would know what I mean"

The ridiculous debt people go into just to compete and impress their neighbors is sickening. The conspicuous consumption for no purpose, when there are people who can't put food on their tables is not only shallow, it's disgusting.

Chayim, people do not have "tons of cash" but rather have "tons of credit" and put all these lavish purchases on credit cards. Then they can't figure out how to pay for them. Wake up.

[rabbidw]

Chayim, I am glad to see that the chareidim are doing so well. From now on, when I see a chareidi schnorer, I will have no problem in passing him by. Let the chareidim take care of their own. Don't send them to me. I am poor but honest and proud of it.

[harold]

Charedim are doing very well financially

The correct statement is that there are SOME Haredim that are doing well. Believe me there are MANY that are struggling. I hate it when people make these blanket statements.

[R]

All the charedi schools that are not government funded in the UK are doing very badly and are desperate for money. They are probably going to go bankrupt.

[Alex]

In all fairness these people should not be trading Forex. Banning FX outright is alittle extreme but the rabbis should do all they can to discoutrage it.

At the very least fx trading requires some basic understanding of math and economics. What can they possible trade if they have no clue what a peep is, how to calculate profit from one peep movement or for that matter any knowledge of fundamental or technical trading theory.

At that point they are better off buying lottery tickets than trading fx.

[harold]

In all fairness these people should not be trading Forex. Banning FX outright is alittle extreme but the rabbis should do all they can to discoutrage it.

I am sure that if someone has or has aquired the skills necessary to trade responsibly they would be able to get the necessary heter. This ruling I am sure was created to quickly stop the problem in its tracks.

[Dr. Dave]

Chayim -

I got shelach monas gifts this year that costed hundreds of dollars each. They had crystal glasses and plates enclosed.

This must be a purim shpiel.

And purim is not about riches. The megillah states that the Jews did not take spoils when they defeated their oppressors.

The opposite is the story of purim.

Tons of silver did haman no good and did not achieve his goals!!!

Learn some halacha. Inedibles are not shlach manot.

And you are to spend more money on matanot L'evyonim (gifts to the poor) than on all the other mitzvot of purim combined (the seudah, shlac manot etc.)

I had the privilege of attending 2 seudot this purim, one at a yeshivish rav's house which included siyums for 2 different masechtas of gemara. The food was not outlandish but was good.

I then hosted a seudah at my modern orthodox home where we learned torah, made numerous l'chaims and had good not outlandish food.

At both seudot there was wonderful ruach, and as halacha everyone who asked for tzedakah received it without investigation.

[David]

As someone who trades Forex and is Orthodox(although no Charedi) I agree that Forex is an incredibly risky investment area.

However, it should not be banned as some people do know what they are doing and are very successful at it. It is extremist statement to say "Foreign currency trading like "violating Shabbat."

[shneerhere]

Chaim, thank you for the good news. As a result of you information, I can now toss all the tzedaka requests from Haredim into the circular file....trash.

Thanks. You've saved me money. Chag Sameach.

[Alex]

Replying to Chaim:

"...finally a ban that makes sense
statistics show that 98% of currency gamblers get wiped out witin 4 weeks."

What is the source of your statistics? I have never seen a study like that before.

I wonder who performed the study and how did they profile and assemble the sample group.

[Office of the Chief Rabbi]

I never heard of Forex, but isn't Fourex a lambskin (not latex) condom? Talk about glatt!!

[Mr. Apikorus]

For every currency speculator, there's a currency hedger.

Hedgers generally make money (not a lot). Speculators generally lose (but when they win, they can win big). However, the two go hand-in-hand. You can't have one without the other.

[harold]

Speculators generally lose (but when they win, they can win big).

juxtapose this with ->

Gamblers generally lose (but when they win, they can win big).

[Isa]

""""As a result of you information, I can now toss all the tzedaka requests from Haredim into the circular file....trash.""""

I once got on the 'sucker' list where my name was sold and I knew what outfit did it. When they asked for money again I told'em where to stuff it.

But thinking over it, I realized one could heat their home for FREE just by investing one doller to this outfit, one dollar to that outfit and use all the mail that gets sent to me as FUEL for a paper furnace.

[Adam Neira]

At the time of the First and Second Temples it was accepted practise for the Jewish community to donate money for the upkeep of the Temple Mount, the Kohanim and the Sanhedrin. There was a command structure in place and monarchy that was heeded. Over time as the prophecies stated would happen, things decayed and corruption, abuse of power and denial of the Mitzvot became commonplace, thus the later exile.

The prophesied Messianic Government structure will be one of transparency, honesty and voluntary contribution by the people. The divinely mandated management paradigm will be of benefit to the Jewish people, the residents of the Middle East and all of humankind. Peace and prosperity will flow outwards from Jerusalem in a ripple effect. The sovereignty in place will confirm that the universe is stable, ordered, benevolent and expansive. More and more people will become aware of the divine plan and nature of creation over time. The Redemption or "counter-balancing" of the evil energies will proceed over time. The maxim "Scarcity is a mindset !" will become more well known.

What is interesting is that the person chosen by G-d for the job will have exhibited absolutely no interest in money, power or control for control's sake. His interest will have been shown to be service, study, discovery and faith. He will choose his assistants and co-workers.
Right before the ultimate arrival the audience is arguing vociferously about the seating arrangements. Everyone should trust in the benevolence, expansiveness, stability and order of the universe. Seek the heavens and start to enjoy the show.

Looks like everyone is scrambling over funding issues...As the flag of peace is unfurled from the Holy City, prosperity will unfold. When there is no violence in an area, the manic concerns of pure survivalism lose their appeal. FACT - The focus/attention dynamic of a group of people changes when a peaceful situation presents itself. That is why most people seek safety at all costs throughout their lives. People seek sanctuary in good leadership.

That sanctuary will be established soon in the Holy City. G-d will not be denied...

[Mr. Apikorus]

My point is, Harold, that currency hedgers play a vital role in keeping markets stable and costs down. But for every hedger, there must be a speculator. It's the other side of the coin.

[Mikal W. Grass]

Chayim is the same guy who claims that non-Haredi Yids are being used as guinea pigs at Mt. Sinai Hospital in Miami Beach, FL. Consider the source.

[harold]

My point is, Harold, that currency hedgers play a vital role in keeping markets stable and costs down. But for every hedger, there must be a speculator. It's the other side of the coin

You are absolutely right, just like in the stock market for every buyer there is a seller. The stock price being the battle ground where the bull and bear meet. A FOREX speculator that understands the risks and speculates based on sound principles and has some form of entry and exit strategy is what is needed. Not the poor sheep that are being slaughtered.

[Chayim]

Mikal Grass,
Yes I stick to my claim as I have helped a modern orthodox fellow from Lawrence sneak out his mother who they diagnozed as having cancer when in fact her New york doctor found nothing was wrong with her when she was snuck back to New york. They were ready to give her chemo in miami. I only mention this because many secular Jews have their parents in miami so they should be aware. It would be a good idea for an investigative reporter to go in undercover with secret cameras. It would be scandolous to say the least.I asked this fellow whos mother was almost dupped into chemo why he dont sue and he told me he does not want to bother.He was happy to see her alive out of this death trap. Unfortunatly this is going on many places because there is no family member standing to back up these elderly victims. Doctors can administer any medication they wish to test and no one will say boo and if the elderly patient dies they can say its normal. Become Chareidi today. This way even if you are without family backing you .the rabbi in the chareidi congregation will show up and doctors will know not to mess with you.They have plenty of other victims to do their experiments on.

[Hector]

My friend is a currency trader, and he wrote the following:

I just got back from a trip with my son to the Northeast to visit yeshivot ... Interesting declaration from the rabbis. I would not argue with them at all about the dangers of Forex trading for the average person on the streeet. Many people are turning to these risky forms of investment becasue their current and future needs are beyond their current earning capacities - that is all true.

But, remember that one can lose just as much gambling in a casino, in a card game, or even in traditional investments such as stocks (ask anyone whose 401K is now 1/2 or less of what it was, even though they were investing in "safe" blue chip stocks), options on stocks, futures, or options on futures. No one should come down on one particular form of investment unless they are also prepared to come down on all forms of investment. Would the rabbis also make a warning against real estate investment? That is as leveraged as Forex and when the bubble burst wiped out as many, if not more, accounts.

People just need to be fully educated on the risks when making any kind of investment, and this is where the problems are. The entire system, PARTICULARLY Forex which is largely unregulated, is set up to entice people with promises of quick riches with no effort. However, trading is always a zero-sum game: for every winner there is a loser somewhere. The smart money is not going to lose to newbies; they are going to wipe them out. This includes brokers who often run "dealing desks" that take positions contrary to their clients' positions. They know your profit targets and can push pricing to take you out at a loss for you and a win for them. It's awful and immoral, but still legal. Then, you have the banks like Goldman Sachs which have supercomputers which are so fast, that they can take out thousands of small-fry orders before the orders even make it to the brokers or an exchange.

So with these tremendous obstacles, how does a private person even hope to not get killed and make any money? It is not easy and it has taken me 14 years to understand it well enough to really understand how to manage risk and come up with something that can work. Most people get wiped out before they ever get to that understanding. This is why I believe so strongly that "quant" modelling and automated trading is the only way to go. It removes the human indecision from emotion and is based on sound math principles rather than guessing and gambling.

Another thing to consider is what the article mentions - that people often have success with the demo program and when they put up real money, they quickly lose it all. The demo programs are giving you ideal pricing "fills" for orders (intentionally) which does not happen at all in real trading. So, a person must do extensive back-testing and account for "slippage" (taking into account that one will have to pay more than the spread often on each trade) before ever investing real money. As I said, everyone and their brother is trying to lure unsuspecting people who don't know much about Forex trading into investing their hard-earned money, only to lose it. I could even open a brokerage any time I want, if I was inclined to, for hardly any start-up cost. To make sure you are not dealing with an unscruplulous person in their garage, one must seek out only reputable brokers who do not mess with orders and are not based in some sketchy country offering no recourse if they try to rip you off.

As far as the rabbis' decree, I would agree with them that if someone does not know what they are doing, it is a tremendous danger for them to try. The problem is that there are no people who believe that they do not know what they are doing. The market will eventually show them with a large loss, but even then, they are often not able to admit shortcomings. The rabbis have great wisdom and know this about human nature, hence the decree.

However, if a system is truly tested, well managed, and properly funded, I believe currency trading can be a tremendous power for good for k'lal Yisrael in helping to provide funds to so many needy people and for helping communities become self-sufficient. Good Shabbos!