Australian (ASX) Stock Market Forum

Does finance really need the middle men?

Joined
15 July 2006
Posts
3,746
Reactions
11
The financial system is out of control . In the current form it will destroy the capitalist system. It has many faults

1. It promotes greed.
2. It is too expensive.
3. It puts the control of our society in the hands of a few.
4. Much of the control is in the hands of the faceless few.
5. It allows the benefits of productivity to be unfairly distributed.
6. There are too many middlemen (leaches in my view) sucking the lifeblood from productivity.
7. It allows those that get hold of the controls of a business to reward themselves with benefits out of proportion to their actual worth.



Farmers have learnt the hard way that the middlemen were keeping them in the poor house. Take the chicken industry. There used to be ;
1. A farmer growing grain
2. A grain merchant
3. A carrier
4. A feed miller
5 Another carrier
6 A chicken hatchery
7 A carrier
8 A chicken grower
9 A poultry auction house or buyer.
10 An abattoir
11 A poultry wholesaler.

Between each one there was a bank and each step there was a bank transaction.

Then came integration. Chicken changed from being a special occasion luxury food to being a cheap and readily available one.

I rest my case ... for now.
 
Joined
15 July 2006
Posts
3,746
Reactions
11
What do you propose?

The means of production be given to the workers?
Chops, Your response was too quick for you to have given the suggestion reasonable thought. Think more before you act may be good advice for you at this stage.
And no that is definitely NOT my suggestion. Didn't you understand my post including the three Ms. Men. Money. Machinery. First thing you learn in business management. They must be balanced for success in business.
 

chops_a_must

Printing My Own Money
Joined
1 November 2006
Posts
4,636
Reactions
2
Chops, Your response was too quick for you to have given the suggestion reasonable thought. Think more before you act may be good advice for you at this stage.
And no that is definitely NOT my suggestion. Didn't you understand my post including the three Ms. Men. Money. Machinery. First thing you learn in business management. They must be balanced for success in business.

Tell me how these points:

3. It puts the control of our society in the hands of a few.
4. Much of the control is in the hands of the faceless few.
5. It allows the benefits of productivity to be unfairly distributed.
6. There are too many middlemen (leaches in my view) sucking the lifeblood from productivity.
7. It allows those that get hold of the controls of a business to reward themselves with benefits out of proportion to their actual worth.

especially points 5, 6 and 7, are not socialist at heart.

By the way, I agree with points 6 and 7, but I have been known to be a communist at various stages...
 
Joined
15 July 2006
Posts
3,746
Reactions
11
Tell me how these points:



especially points 5, 6 and 7, are not socialist at heart.

By the way, I agree with points 6 and 7, but I have been known to be a communist at various stages...

5. Capitalist management principles are clear that each section and stage of a business deserve a share of the rewards. Communist principles share the reward of a business over all society equally.
6. You can't be serious here. Communist principles ??? Never having been one I don't know how they treat leaches.
7. Any system that allows execs to take huge performance bonuses when the business is going backwards is wrong. Capitalist or communist.

One of these days you may come to realise that all capitalists aren't out to rape and pillage the system. Some of us only want our fair share.

I still find the title communist offensive, but you know that and that is why it keep coming up. I'll leave that for others to judge.
 

chops_a_must

Printing My Own Money
Joined
1 November 2006
Posts
4,636
Reactions
2
5. Capitalist management principles are clear that each section and stage of a business deserve a share of the rewards. Communist principles share the reward of a business over all society equally.
6. You can't be serious here. Communist principles ??? Never having been one I don't know how they treat leaches.
7. Any system that allows execs to take huge performance bonuses when the business is going backwards is wrong. Capitalist or communist.

One of these days you may come to realise that all capitalists aren't out to rape and pillage the system. Some of us only want our fair share.

I still find the title communist offensive, but you know that and that is why it keep coming up. I'll leave that for others to judge.

5. Communist and socialist theory doesn't share wealth over society equally, but shares it based on wealth created and value to society (in principle). Something that is congruent with your views.

6. Communism attempts to eliminate 'leaches' that profit from other people's wealth creation, and hinder benefits to society.

7. Capitalism has always paid disproportionate amounts to people far in excess of their actual worth. Take brickies or tradies compared to scientists for example. And that's regardless of progression to a cause.

Before you shoot your mouth off again, it might be worth checking out workers collectives/ collaboratives in places like Spain, which have a system in place, exactly like you are proposing. But that is socialist/ communist in nature as well, but functions perfectly well.

And others have already made the observation about you sharing beliefs with communists.
 

xoa

Joined
22 January 2008
Posts
279
Reactions
0
No, finance doesn't need the middlemen. It's a problem in many industries, not just finance.

For example, look at health system. Once upon a time there were doctors, nurses, orderlies, cooks, and the occasional receptionist or typist. Now they're outnumbered by HR consultants, public relations experts, social workers, OH&S directors, osteopaths, aromatherapists, policy analysts, administrative and liaison officers, and chiefs to supervise them all.

With every year, there's fewer people who create value, and more people to administer and redistribute it.

If the middlemen were sacked, we'd have a terrible unemployment rate.
 
Joined
23 April 2008
Posts
1,742
Reactions
389
The financial system is out of control . In the current form it will destroy the capitalist system. It has many faults

1. It promotes greed.
2. It is too expensive.
3. It puts the control of our society in the hands of a few.
4. Much of the control is in the hands of the faceless few.
5. It allows the benefits of productivity to be unfairly distributed.
6. There are too many middlemen (leaches in my view) sucking the lifeblood from productivity.
7. It allows those that get hold of the controls of a business to reward themselves with benefits out of proportion to their actual worth.

I agree with all 7 points.

Bankers have a privileged position in our society. They own the rights to "extend credit" / "create credit" / "money multiply" / "create money out of thin air" (All these terms refer to the same thing).

The public is awakening from its credit induced sleep and starting to see through the facade of the financial sector.

I believe the current financial crisis is a consequence of "fractional reserve banking" morphing into "zero reserve-unlimited credit" banking.
 

CanOz

Home runs feel good, but base hits pay bills!
Joined
11 July 2006
Posts
11,534
Reactions
500
Chops, Your response was too quick for you to have given the suggestion reasonable thought. Think more before you act may be good advice for you at this stage.
And no that is definitely NOT my suggestion. Didn't you understand my post including the three Ms. Men. Money. Machinery. First thing you learn in business management. They must be balanced for success in business.

Last i checked there were still 5 "M"'s. :rolleyes:

Materials
Manpower
Machinery
Methods or Management
and
Money

CanOz
 
Joined
13 November 2006
Posts
701
Reactions
0
the biggest problem is that the finance industry is not actually productive in fact its the opposite it rapes value from companies. Rel productivity and value comes from investing in things that in turn create more productivity.
Look at islamic financial rules they actually are based on fair rues and create value. The current system is just a rigged gambling ring where companies with heaps of cash can actually manipulate the odds. First and foremost housing should never have been treated as a commodity the whole basis of market principals only works if they is an alternative product. Housing is a need and there is no alternative.

Take shorting for example how does it in any way produce value in a company or the economic environment, borrowing shares selling them then hoping to buy at a lower price. Its rediculous its basically legalised criminality, the biggest problem is the gambling is rigged by the house they place shorts then sell the crap out of a company.

Speculation is banned in islamic law, dont get me wrong im not islamic but i think the ideals make a lot of sense. You can only sell products that you plan to deliver, what benefit can be made out of buying produts on paper that you never intend to take hold of, it inherintly breeds bubbles and pointless specualtion and makes us pay more for products that are in plentiful supply.

Its essentially pirac of the worlds resources by large economies, that is over now.

Other problem is corporations are essentially a way of making huge private wealth with no private responcibility.The multi nationals operate acrosss boarders with no real laws of any country. They have no countries interest at heart and the only goal is creating wealthfrom nothing. Tax evasion , dodgy accounting all a product of greed and deregulation.

Does anyone find i funny that 10 years after th Glass seigal act (which was created as a byproduct of the great depression) was revoked that we find ourselves in another great depression.

US politics is ruled by proxy and guided by lobby groups, these groups should be outlawed. How can business putting money into politics everbe independant and fair ! The us citizens only have themselves to blaim.
The country has always been dog eat dog but when criminals start running the country you are destined for trouble.

I mean the president from any party in the lst 20 years has been a puppet.
They ae a country of people that let go of rights and values and embraced self rightousness and individuality.
 
Joined
15 July 2006
Posts
3,746
Reactions
11
Last i checked there were still 5 "M"'s. :rolleyes:

Materials
Manpower
Machinery
Methods or Management
and
Money

CanOz

3 Ms for beginners, 5 when you get down to business further down the track. Then there is the "E"s, Enterprise, Enthuasium & Effort. Then the "R"s Risk etc.

Let us balance the first three first. Regardless of how you look at it, the money position has become corrupted and needs reorganisation.

Note my change of avatar. I can't be WRONG all the time so I've decided chops needs it more than I do. Hence the new one.
 
Joined
23 April 2008
Posts
1,742
Reactions
389
7. It allows those that get hold of the controls of a business to reward themselves with benefits out of proportion to their actual worth.

Alan Moss, former CEO of Macquarie Bank/Group would have to be a prime example of the financial sectors excesses, before the credit crisis.

Remuneration
$33.5 million in 2007
$24.8 million in 2008
Plus
$50.0 million golden parachute.

The bludger has never raised a sweat in his life.
 
Joined
14 February 2005
Posts
13,108
Reactions
11,157
7. Capitalism has always paid disproportionate amounts to people far in excess of their actual worth.
Capitalism pays people whatever ammount is needed to match supply and demand in the labour market. Hence it pays prostitutes more than most political leaders and there's a simple reason for that. Lots of people would be willing to give being prime minister a go but few are willing to do the other occupation. Supply and demand.
 
Joined
3 January 2007
Posts
940
Reactions
2
We can complain all we want, but the fact remains that this system has been with us for many decades and it would be practically impossible to change it for the "greater good". Call me a conspiracy theorist or something, but I'd rather take advantage of the system than be taken advantage of it. I'd worried about things that I could take control in rather than complaining about things I have no control in. Immoral? Not really, I call it being a realist. :)

So yes, I agree with Nokia on how corrupt and broken our current system is. But what can we do? Might as well jump along the train and ignore everyone else. hehe
 
Joined
15 July 2006
Posts
3,746
Reactions
11
So yes, I agree with Nokia on how corrupt and broken our current system is. But what can we do? Might as well jump along the train and ignore everyone else. hehe

I think we should stop the train, get off and get another form of transport. This one is derailed and heading for a a pile of rocks, If it gets past those it is heading for a river where there used to be a bridge. If it gets past that you will have the answer to another thread (Is there a god?)
 

wayneL

Goober, perhaps Turnip
Joined
9 July 2004
Posts
21,477
Reactions
6,475
Take shorting for example how does it in any way produce value in a company or the economic environment, borrowing shares selling them then hoping to buy at a lower price. Its rediculous its basically legalised criminality, the biggest problem is the gambling is rigged by the house they place shorts then sell the crap out of a company.

Fair points for debate in the rest of your post, but on this one point, (not withstanding the manipulation which is a fair point) you're not thinking straight.

You say shorting does not said shorting does not add value. Well, can you please explain to me how going long via the stock exchange adds any value to the company... IT DOESN'T.

You are punting on the actual business adding value to itself and hoping to sell at a higher price. You are also hoping to remove value from the company in many cases via a dividend.

How is that adding value??????

On your point of manipulation, institutions and the business themselves manipulate prices to the long side similarly by rumours and fraudulent accounting.

Ergo, if shorting is legalized criminality, then so is longing, unless in a capital raising.

Please people, think things through before casting aspersions on a legitimate commercial activity, because by your logic, ipso facto, you are a criminal too.

Disclaimer ad naseum: Manipulation and naked short should of course be addressed.
 

gav

Joined
20 May 2008
Posts
1,158
Reactions
6
Fair points for debate in the rest of your post, but on this one point, (not withstanding the manipulation which is a fair point) you're not thinking straight.

You say shorting does not said shorting does not add value. Well, can you please explain to me how going long via the stock exchange adds any value to the company... IT DOESN'T.

You are punting on the actual business adding value to itself and hoping to sell at a higher price. You are also hoping to remove value from the company in many cases via a dividend.

How is that adding value??????

On your point of manipulation, institutions and the business themselves manipulate prices to the long side similarly by rumours and fraudulent accounting.

Ergo, if shorting is legalized criminality, then so is longing, unless in a capital raising.

Please people, think things through before casting aspersions on a legitimate commercial activity, because by your logic, ipso facto, you are a criminal too.

Disclaimer ad naseum: Manipulation and naked short should of course be addressed.

Exactly. And selling shares you own should also be illegal, because you are selling in the anticipation that the share price would go down. If you thought the share price was going to continue to rise, then you wouldnt sell!
 
Joined
4 September 2008
Posts
117
Reactions
1
We can complain all we want, but the fact remains that this system has been with us for many decades and it would be practically impossible to change it for the "greater good".

So yes, I agree with Nokia on how corrupt and broken our current system is. But what can we do? Might as well jump along the train and ignore everyone else. hehe

This is the very attitude that keeps the current system in place. If it is that bad then we as the ultimate consumers need to let the market know. I for one am all for a piece of the socialist pie. A bit of state ownership and regulation wouldn’t go astray... note: I said a bit.

prime example of the financial sectors excesses

Remuneration
$33.5 million in 2007
$24.8 million in 2008
Plus
$50.0 million golden parachute.


What could someone possibly do to earn $33mil a year?

Did they cure cancer? No...
Did they alleviate poverty? No...
Did the achieve world peace? No...
Did they stop global warming? No...
I could go on...

So I will side with Nioka and ask the same question; does finance really need the middle men? But in asking that, and using the poultry example above as reference, you could almost say that about most industries.

:bier:

blue
 

Trembling Hand

Can be found on the bid
Joined
10 June 2007
Posts
8,852
Reactions
203
I for one am all for a piece of the socialist pie. A bit of state ownership and regulation wouldn’t go astray... note: I said a bit.
Like being a bit pregnant?
What could someone possibly do to earn $33mil a year?

Did they cure cancer? No...
Did they alleviate poverty? No...
Did the achieve world peace? No...
Did they stop global warming? No...
I could go on...
I know.......Play soccer??
 
Top