No More Greed and Fear, pls!

Angry finance-related ranting and raving ahead. Feel free to skip.

It has to be said. I never thought I’d actually say this but enough is enough. Too much praise have been heaped on the supposed “intelligent” investor, the creme de la creme. The investment banks who were the masters of the universe, the men (and the few women…most of them look butch anyway to survive in such a macho and mysogynistic industry) who made millions in a day. Graduate trainees who earned more than their parents’ in one year compared to their parents’ entire lifetime.

The stupid ideology coveted by the investment banks, the financial world must be stopped. There must be an end to this “Greed and Fear”.

CLSA’s paper is called “Greed and Fear”, as though these two qualities are something that should be prided in the financial world. Well, when shit hit the fan and investors, the same ones who entered the market with all that greed are running out in fear.

And they’re the same ones whining to the governments that they’re not doing enough with the bail out. The SAME ONES who were whining to the government a few years ago that there was too much regulation. Shame on the government who had forgotten that regulation is intended to protect the little man and not the fat cats who want a free hand in the stock market.

And enough is enough to high City bonuses. It was a sore point for regulators then (we earned shit and the traders earned triple my annual salary…and my job was to help them make more), and it’s still sore point for me now. And why on earth should we protect these people when the bail out came with a condition, cut down bonuses, the whine became “BUT MUMBAI AND SHANGHAI WILL GET THE REST OF THE MONEY ANYWAY!! WE CAN’T STOP EATING AT EXPENSIVE RESTAURANTS!

If you can think of intelligent ways of leveraging an entire nation to death, I’m pretty sure you can find a way to stop the bleed to Shanghai and Mumbai. Idiots.

I hope this will be a lesson to all that, only selfish idiots enter the financial industry. If they were so bloody talented and intelligent, this wouldn’t have happened. Was it not obvious that fundamentals count (Finance 101)? Was it not obvious that when an economy is not based on the real economy, it was BOUND TO FAIL (Econs 101)? And they call themselves the Masters of the Universe.

Personally, I feel the best way out of this financial crisis is to throw every single investor and trader around the world in jail and put people like teachers, farmers, or people with some semblance of logic (which would be everyone else) back there to just calm the markets down. Right now, there’s just too much panic and everyone is running out, there’s nothing that can be done.

Let’s face it, investment bankers (sorry my lovely i-banker friends, you are being lumped and stereotyped) are nothing more than glorified power-point makers and honestly, each and everyone responsible for this crisis, hedge funds etc, deserved to be shamed on the streets. Should make a scarlet letter like situation, , we’ll sew the letters IB in red on all traders to remind the public the sin they’ve committed.

No more coveting greed and fear. This must be curtailed. It’s not like there’s any benefit to this. It’s better to have smaller and more stable returns of 5 to 7% a year rather than 30%. Enough is just enough.

P/S: Let’s just get rid of short-selling, eh? It’s supposed to be used to manage risk, not create more risk. Like the Blackberry was supposed to help productivity, not to encourage workers to use it as an alternative to messenger. Lots of things work fine in theory, but become stupid in practice.

P/P/S: Err…Malaysia? The world is in crisis? Stop behaving like you’ll sail this one just fine.

P/P/S: Err…regulators? It’s YOUR fault too for succumbing to the I-bankers. Regulation must be thought through carefully, not let people who are making money dictate to you the rules of the game.

tl;dr. Cry moar people who suffered in finance. Finance boat is FAILBOAT!

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2 comments on “No More Greed and Fear, pls!

  1. David says:

    It is clear that some of the financial players are to blame, after all is it is really stupid to provide mortgages to people who cannot pay them (thereby giving them the illusion that they could own a home, when actually they cannot and now they are in a worse situation then previously) and to create financial products that are so complicated that you can never truly evaluate the liability you are exposed to.

    Having said that, some products out there are not toxic and some so have strong fundamentals. I do not agree that all i-bankers are idiots (I am one, I may be an idiot but I have i-banking friends who are not idiots). Some of us do provide sound financial products to the market. The only downside is that since the economy is all based on expectations (Economics 102) and that idiots do play in the field of speculation, then it screws the system.

    I also think that you might want to consider blaming mortgage sellers: after all who went knocking on insolvent people’s door to sell them products which they were later on going to sell on to i-banks? They should be blamed as well!

    Then whilst we are at it, we can also partly blame people who took high risk mortgages. If you cannot pay for a purchase, do not buy it. Not that I want to be insensitive, but if you happen to live on the minimum wage, does it make sense to take a high interest mortgage on your house. Did they consider that one day they may not be able to pay for that. Granted they may have been pushed to sign the documents, but are we not always told to read the fine print and think before we sign? They are adults and should think about the consequences of their actions.

    I-bankers are to be blamed for the financial turmoil we currently face, but they are not the only ones. Your pension fund, government, savings account provider (they are all institutional investors), and all of us are to be partially blamed for what is happening as well.

  2. Adlina says:

    I’m really, really reluctant to blame the sub-prime borrowers. When I was at the bank yesterday, I was overloaded with information that mostly untrue (well, misleading) and the worst thing was that the bank actually used the words “free money” on me. I can imagine, someone being uneducated in finance would find it tempting without understanding really just what they’re getting themselves into.

    True, not all are idiots. But the head of Lehman (who happens to be a massive leech) sure ain’t helping everyone’s perspective of i-banking very well. And you’re not an idiot, and no, I’m not sucking up 😉

    A chunk of my anger is definitely towards the regulators. I remember back at the SC we used to say things like, “Geez, this is complex. Should we let them do this?” And then say, “It’s okay, they know what they’re doing.” Regulators should have been harder, been on the ball with the rest of finance and not have pandered to politics. But as they say, hindsight is always 20-20

    But I agree with you thoroughly on the institutional investors, who wanted to park their money, somewhere, anywhere as long as it made money.

    So, in conclusion, collectively, we were all stupid. We all wanted a piece of the action that promised us returns of 30% and over when we know historically, we can’t do that. Greed trumped us and now, we’re back at fear.

  3. Tim says:

    Nice article… thanks for sharing.. keep it up ^^

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