Financial whiz kidsBy: Dinesh | 06-Jun-2009Reply | ForwardDear Sir, Innovativeness in the Financial industry is hot air and we had 2 types of scam. (A) The big shots have simply helped themselves with the money which the people had lent to them for safe keeping.(B) Junk bonds were created and offloaded to the gullible public.All that the media has to say regarding the banking community is:If you wish to draw a high salary - create wealth or add value in some way. Nobody likes middlemen who take their cut (sometimes outrageously high) without adding value to the society. Don't use fraud to cheat the gullible public of their hard earned saving. The law must be tightened and if the public was not given full information - when the 'junk' bonds were sold to them - the customer who was misled into buying junk bonds has a right to get his money back or alternatively sue you to jail you.
Bank FraudBy: Pavan | 05-Mar-2009Reply | ForwardYou are right that financial innovation has led to overall gain. But contrary to computers and pharma where the innovation actually has to work (value for money) to be bought in the market, these whiz kids created vaporware out of nothing. I am talking about CDO and CDS. The short term gains of trading and making billions out of something I am sure they knew did not actually have the inherent value they fooled the entire investment community and laughed all the way to the bank. Till date what I can't get is that a mortgage which has a fixed return of 3 to 4% interest can be sold bundled with other things such as auto loans etc and ultimately the investor has no idea on what his return would be, and this was sold and changed hands multiple times by very smart people ( fraudsters). They did this only to show large commissions and hence pocket the huge bonuses.
Well saidBy: Avinash Mulye | 28-Feb-2009Reply | ForwardAwesome. Thank you so much for putting the entire matter in the right context. And yes ! Even Stiglitz misquoted Fridman. Milton Friedman wanted the Fed's actions to be "person (chairman) indepenent". I agree that in the last 2 decades finance and Computers have been equally innovative.
deserving do not getBy: am | 28-Feb-2009Reply | ForwardOne thing to be added that real persons who had the interest and were able to pay the loans were not selected due to documentations problems. Even today a person can get all facility on a pay slip, but a self employed shall not get loans without so may documentation
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