Tuesday, April 21, 2009

Layman's View to modern day Economics

OH MY GOD- FINANCIAL SERVICES SECTOR THRIVES ON FEELINGS.


This is the best business to be in. The geniuses at Wall Street: derivatives traders, brokers, bankers etc really had it figured out.

Not only did they think up of how to sell NOTHING (debt- a loan of someone-else's money) four times over (eventually it runs out, but they continue to repackage and sell nothing from a bunch of other people earning close to nothing).

And then.. they finally realised that- "Hey, waitaminute, human beings walk around with a lot of emotions and feelings.. let's just screw around with their perceptions (rather than the reality of the situation)"

Suddenly, we have a market where stock markets are rallying or in decline based on how people feel.

Nevermind that, realistically: Manufacturing output, Total amount of precious metals/good/services, demand and supply stay relatively static day to day. However, we live in an age where the stock markets rise and fall on the same day within the week. Simply cos, OMG FEAR! OMG! Sky is falling! OMG! Intel made 1 million processor chips yesterday but just cos I FEEL SCARED, Intel is suddenly a crap company functioning on the level of a banana republic!

What the frak?

In the end, it's all simple physics. Money exists in one state/form or another. It doesn't disappear. What's really the problem is all that "fake" money running around from all the "stimulating". It's money only cos the govt says it is. But real productivity, real output, REAL MONEY/VALUE creation has yet to happen.

Living beyond your means consumerist lifestyle of credit HAS TO STOP. The madness should end somewhere and hopefully, we won't ever see a situation where Financial Services employees account for 9% of the workforce but yet command 34% of salaries for the workforce.

Guessed where yet? Only in New York baby.

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