The real problem with financial markets

[Mich the Tester]

…is not that they go up and down. That’s what prices do in a market. ‘t was ever thus, since Ugg and Ogg from neighbouring caves started keeping chickens and swapping them for fish.

The real problem, to my mind, is that the financial industry drains the economy of talent. We have mathematicians, physicists and other scientists being paid tuliploads of money in ‘the city’ to make predictions on future movements of prices in a system that they should know is chaotic and unpredictable. All the ‘quants’, ‘technical analysts’ and so on are really playing a sort of astrology game with some numbers thrown in to make it look all ‘sciencey’.

Perhaps if there were less attention paid to the financial markets by ‘the meedja’ and in fact all of us, more attention was paid to scientific research, innovation and invention, and more value were to be placed on pure science AND applied science, then talented science graduates would be more tempted to work in the fields that will give us something valuable for the future instead of pissing away their lives chasing a big bonus and then finding themselves fired by SMS after a few years, wondering how to pay off their gazillion pound mortgage and fuel up the Ferrari.

Thoughts?

[alreadypacked]

I think 'the city' are doing us a favour soaking up people who want tulip loads of money for doing very little. Otherwise they might be out robbing banks etc.

[sasguru]

... instead of pissing away their lives chasing a big bonus and then finding themselves fired by SMS after a few years, wondering how to pay off their gazillion pound mortgage and fuel up the Ferrari.

Thoughts?

working for shed loads of money, paying off their mortgages, and retiring at 30.

HTH

[suityou01]

working for shed loads of money, paying off their mortgages, and retiring at 30.

HTH

Like you did. You're only working to keep your hand in, right?

[Moscow Mule]

I think that the real problems started when the City started selling risk instead of money.

That appears to be what has ****ed us into a cocked hat.

I can't see a way out of it, but that's George's job - not mine. .

[AtW]

I think 'the city' are doing us a favour soaking up people who want tulip loads of money for doing very little. Otherwise they might be out robbing banks etc.

People who rob banks go to jail pretty quickly and the damage they cause is nothing compared with what banks/hedge funds do and instead of going to jail those guys get massive bonuses.

What needs to happen is a strong (backed by penalty of very long jail sentences) discouragement to short term attitudes: very high CGT on short term gains (<1 year), per transaction tax to discourage automated bulltulip that tries to make money on multiple trades, high tax for "investment" into stuff you don't actually use: ie - buying futures on oil with sole intention to resell them at higher price.

Naturally all that will totally screw up existing Anglo-Saxon banking system and they'd actually have to earn a modest living like majority of people who live there, but I think I can live with that, can't you?

[Bright Spark]

What needs to happen is a strong (backed by penalty of very long jail sentences) discouragement to short term attitudes: very high CGT on short term gains (<1 year), per transaction tax to discourage automated bulltulip that tries to make money on multiple trades, high tax for "investment" into stuff you don't actually use: ie - buying futures on oil with sole intention to resell them at higher price.

The alternative system your describing sounds very Islamic if you ask me......you might as well chop off their hands.

[Mich the Tester]

I think 'the city' are doing us a favour soaking up people who want tulip loads of money for doing very little. Otherwise they might be out robbing banks etc.

But hang on, it’s not about people having to work hard or do more work. Hard work made nobody rich, and certainly didn’t build the fabulous public and private wealth you can see if you travel around Europe with your eyes open. What made all this wealth is clever work. Da Vinci took 3 years to paint the last supper. The great engineering works of Europe, like the channel tunnel and Brunel’s railways and ships were all completed over budget and with planning delays. But this stuff has consequence; it was made with all the ingenuity that talented people could muster. Of course, there were hard working labourers and apprentices, but they could have done nothing new without the intellect of the artists, scientists and engineers.

We don’t need clever people to work hard; we need them to work cleverly and on meaningfull things.

Hard work is a falsehood, a piece of modern mythology that needs to be attacked at every opportunity. What will count in keeping us rich in the future is small doses of intellect, and not large doses of sweat.

[AtW]

The alternative system your describing sounds very Islamic if you ask me

No, it's not Islamic at all.

[Moscow Mule]

But hang on, it’s not about people having to work hard or do more work. Hard work made nobody rich, and certainly didn’t build the fabulous public and private wealth you can see if you travel around Europe with your eyes open. What made all this wealth is clever work. Da Vinci took 3 years to paint the last supper. The great engineering works of Europe, like the channel tunnel and Brunel’s railways and ships were all completed over budget and with planning delays. But this stuff has consequence; it was made with all the ingenuity that talented people could muster. Of course, there were hard working labourers and apprentices, but they could have done nothing new without the intellect of the artists, scientists and engineers.

We don’t need clever people to work hard; we need them to work cleverly and on meaningfull things.

Hard work is a falsehood, a piece of modern mythology that needs to be attacked at every opportunity. What will count in keeping us rich in the future is small doses of intellect, and not large doses of sweat.

What is left to invent that will produce the continent wide benefits that the railways (& other engineering advances of that time) brought to Europe & the world?

To my mind, the only thing left (that will bring about a sea change) is new methods of clean energy production.