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4/05/2012

The con game in the world of high finance

The international finance industry is rotting to the core. The revelation by the Goldman Sach executive provided a small glimpse to the crimes being committed in the industry. The fund managers are no longer making money from the market for their clients. They could not. The whole financial industry, including the stock markets, has been redesigned to sell worthless papers and financial products at the expense of genuine stocks. Companies listing their shares in the markets too are getting wiser and no longer value the net worth of their shares. Everyone is trading for quick profit with no regards to fundamentals.

When fund managers find it impossible to make money from trading stocks, they ended up violating one of the major regulations of trading, churning client’s money and making money from the clients instead. Everyone, fund managers and stock exchanges, are trying to keep one step ahead of the competition by running faster while the bridge behind is falling off. And they think they are safe while those who move slower fall off and were swallowed by the bottomless pit below.

The only hope by the funds or exchange administrators is to be the last man standing. But then they forgot that the bridge is still collapsing and the last man will still have to fall in too. The fundamentals of stock tradings when there is real value in stocks and shares of companies have been forgotten. Today the trading is done on fictitious paper creations instead and destroying the values of stocks. Billions and trillions of dollars are piled up on worthless papers instead of real stocks just like the days of Lehman Brothers and toxic notes. Values are being created by shifting and printing of these papers. This paper game will have to come to an end sooner or later.

All the top talents are so deep in the pool of shit that they no longer see further than the tips of their noses. And they keep trying to be clever by trying to be creative and innovative, to stay ahead of a falling bridge.

The collapse of the American and European economies and finances was not due to their inability to produce but through their cleverness in over producing, by printing money for themselves, with no real value added. Asset enhancement, asset swaps, paper swaps, borrowing and endless credits, and buying worthless pieces of papers, etc etc, become an unproductive computer game.

The real producers of values are in manufacturing and farming and their true values have been ignored and even sneered at for the pittance they got for their labour. The smart asses need not produce anything but rewarding themselves with millions and billions by financial engineering. And they think the game will go on and on.

The real stuff, the real producers of goods and services, will survive and outlive the fictitious producers of paper wealth that will come to nothing. It sounds so clever for an asset to be traded hundreds of times it original value. It sounded so clever to buy some papers and sell them at hundreds of times their original values. Where is the real value added? If there is none there is none and the gain is pure fiction.

Try to think what Tharman said, ‘We cannot just be a society of insurance agents, real estate agents and bankers and office workers.’ The best of the American talents are in Wall Street writing paper moneys to make millions and billions without being productive. And we want to go down the same road with everyone paying themselves in millions without producing even a grain of rice.

6 comments:

RAJEEV SINGH said...

Great blog nice n useful information , it is very helpful for me , I realy appreciate thanks for sharing. I would like to read more information thanks.
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Anonymous said...

We cannot just be a society of politicians,
grassroots leaders,
brigadier-generals,
rear admirals, and
scholars.

Matilah_Singapura said...

Market-based (individual actors taking individual action) capitalism = Good

Crony Government Linked Capitalism = Extremely bad.

Singapore - generally good but way too much Government Linked Capitalism.

Capitalism's "safety valve" is the FAILURE and LOSS of enterprises who do not meet market needs and expectations, or fail through bad management or simply because they are not fit to survive. In the long term what is achieved are healthy private enterprises.

Under crony capitalism, those enterprises which are supposed to FAIL, do not fail. They are artificially (tax payers pay) propped up and defended by govt funding and/ or regulating out the competition.

Failures in all areas of enterprise are to be expected. Including finance -- failure is GOOD. It weeds out the rubbish.

What is bad is if these schemes and scams are artificially kept "alive".

Victor and Vanquished said...

Dark be the con of man, to create something out of nothing, for that is something pretty much only God can do, without incorporating any algorithims of self-destruction at some point or another.

That said, Singapore should stop all our devil's advocation tactics and start producing our own food and power so that we don't suffer in the long run or what's about to come.

We have so much resources to divert our research to abundant food production from vertical farming and sustainable energy sources like solar energy/tidal energy/wind energy.

We're not supposed to wait for the rest of the world... we're supposed to spearhead this change! And then we can patent it and share it with our neighbours and needy countries... so much propensity for good... should not squander it on selfish zero value add jobs/careers like finance and its ilk.

Anonymous said...

Another big rubbish dump for the talent pool, spending time and resources developing useless and unproductive computer games and applications.

Chua Chin Leng aka redbean said...

I like the way Temasek sell its Danamon shares to DBS. Brilliant financial engineering.