121–130 of 214 posts
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In short, the finance sector lures away high-skilled workers from other industries LOL. When other industries aren't run by chinless public schoolboys where engineers are second class citizens, call me.
What is meant by "public schoolboys" exactly? I'm struggling to grok the intended message.
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>For example, let's look at your checking account. A banker's not a middleman here Yes, he is. He takes your money and lends it out to others, whom he charges for the privilege. That's how fractional reserve banking works. Of course, these days since interest rates are zero, that's not really a profitable line of business. It's mostly used to upsell the more profitable products like mortgages or credit cards.
The banker actually creates brand new money to give to whoever is approved for a loan - he/she doesn't use your money for that purpose.
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The finance sector does more than lend/invest capital themselves. Large investment banks provide a wide range of services for companies (e.g. bond issues, IPOs, secondary offerings, working out M&A deals, brokerage services, ...). The biggest problem with the finance sector is that it is extremely opaque and almost no one outside the industry understands what financial institutions actually do. Yet, everyone seems to…
>Which is better: a bright graduate working on making a large web company's advertising algorithms slightly more efficient or the same person working for an investment bank on a bond deal that helps a biotech company raise more money for future R&D? That's the very definition of a false choice. We should be pouring more resources into developing new technology itself, not just trying to advertise or fund it more effi…
Define 'nontrivial'. I'd call Tesla and SpaceX nontrivial. Or what kind of hardware are you talking about? Maybe take a look here: https://angel.co/hardware
> All of the shifting money between hands on Wall Street is sucking the air out of our industries.
That's the very definition of a false cause and it's also so woolly that is barely means anything. Which money is "shifting hands on Wall Street" and what is is that even supposed to mean? Of course money is being transferred, that's the very idea of a financial system. And how does this "suck the air out" of anything? Banks are not the ones who would rather fund your photo sharing app than the next Intel. If you want to go down that route, blame the Angels/VCs who are the driving force behind what is getting funded. Or blame the people who are more interested in reading about/working on the latest flavour-of-the-month Javascript framework instead of actually tackling the hard(ware) problems. Wall St. are not the ones behind the wheel when it comes to determining which new ideas get attention.
The lack of regulation is more of a concern than the human resource allocation or event the debt to GDP ratio. The derivatives market is valued over $700 trillion dollars (forbes, 2013 est.), while the GDP of the world is S$74.31 trillion (2013). There's also options and swaps markets. While their benefit is dubious, deregulation has allowed these markets to ballon to ridiculous levels. These markets keep investment…
The derivatives market IS NOT valued at over $700T. That represents the gross notional of all derivatives, but most of those trades have equivalent offsetting positions. Gross notionals are virtually meaningless.
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>Which is better: a bright graduate working on making a large web company's advertising algorithms slightly more efficient or the same person working for an investment bank on a bond deal that helps a biotech company raise more money for future R&D? That's the very definition of a false choice. We should be pouring more resources into developing new technology itself, not just trying to advertise or fund it more effi…
> When is the last time that you saw a successful hardware startup that did something nontrivial (a la Intel)? Define 'nontrivial'. I'd call Tesla and SpaceX nontrivial. Or what kind of hardware are you talking about? Maybe take a look here: https://angel.co/hardware > All of the shifting money between hands on Wall Street is sucking the air out of our industries. That's the very definition of a false cause and it's…
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I don't read "has been set up this way" in the parent as necessarily implying agency, but rather as an idiomatic way of referring to the status quo.
It's hard to say. We're talking about humans and the systems we live within. Humans, by definition, have agency. When does an effect resulting from the actions of humans cease to be the product of agency?
The US finance industry uses self-generated work which generates commissions. One of the drivers behind this is the tax preference for debt over dividends. There's been a trillion dollars worth of stock buybacks since 2008, an action taken mostly to reduce taxes. That generates work for Wall Street, and wealth for those "near the money", working on various deals. Then there are "hedge funds". Hedge funds, as a class,…
The US finance industry uses self-generated work which generates commissions. One of the drivers behind this is the tax preference for debt over dividends. There's been a trillion dollars worth of stock buybacks since 2008, an action taken mostly to reduce taxes. That generates work for Wall Street, and wealth for those "near the money", working on various deals. Then there are "hedge funds". Hedge funds, as a class,…
Minor remark: one major selling point of (some) hedge funds is low correlation with other investments, not huge returns.
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The problem with the finance sector was actually largely the opposite: financiers were so confident the collateral would hold its value that they were happy holding loans made to people with little or no skin-in-the-game or ability to make regular payments. They assumption was that even if significant numbers of loans in a portfolio failed, the repossessed houses could be sold on, perhaps even at a profit, Unfortunat…
The banks and mortgage brokers making all those "liars loans" knew that the loans weren't going to be repaid, but they didn't give an effing eff. They knew that they would be able to sell the mortgages in RMBSs and pay their loan officers and executives handsome bonuses for all those massive phony profits. They would blacklist appraiser who wouldn't give them appraisals to fit the loan they wanted to make.
Plus there are many many other problems with banking other than sub-prime which boil down to the above.
That's why we need to start putting individuals in jail.
The US finance industry uses self-generated work which generates commissions. One of the drivers behind this is the tax preference for debt over dividends. There's been a trillion dollars worth of stock buybacks since 2008, an action taken mostly to reduce taxes. That generates work for Wall Street, and wealth for those "near the money", working on various deals. Then there are "hedge funds". Hedge funds, as a class,…
So where do they generate commissions as a company, compared to a person buying & selling their ETFs with a 3rd party exchange?