The real problem with financial markets

[Moscow Mule]

No, it's not Islamic at all.

There's nothing particularly special about Islamic banking - just rename "interest" to "profit" and you're about 75% there.

[Mich the Tester]

No, it's not Islamic at all.

But if it was Islamic, that wouldn’t be such a bad thing. I can find many faults with Islam, but it seems that the Islamic banking system has come through the various crises in a healthier state than our system, perhaps because any borrowing is done with real, tangible collateral and a shared risk between lender and borrower that makes both parties conscious of the need for keeping a longer term view.

[d000hg]

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.

I think you have to work pretty damn hard to get high up - high-stress, long hours, etc.

[Mich the Tester]

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.

New sources of power, the ability to manipulate material at an atomic or even subatomic level, the ability to manipulate gravity or any of the other forces working on us. Sounds outlandish I know, but if you’d said tried to explain semiconductors only 100 years ago, even the most educated people would have given you a vague look and perhaps told you to take another pill.

[AtW]

But if it was Islamic, that wouldn’t be such a bad thing. I can find many faults with Islam, but it seems that the Islamic banking system has come through the various crises in a healthier state than our system, perhaps because any borrowing is done with real, tangible collateral and a shared risk between lender and borrower that makes both parties conscious of the need for keeping a longer term view.

Islamic system has got a flaw in which earning interest isn't allowed - this effectively kills lending, well, they do lend and they do earn money but they just have to work it around so that it technically fits imposed limits.

Earning reasonable money on long term investments is a fine thing - what's not fine is when people can earn far more on short term speculations of stuff they never get to touch or use, you know those electronic trades - all that prevents banks from investing long term because why the heck would they invest into company for a few years with risks when they can make 2-3% in a space of a few days if they guess direction of the market well.

[Churchill]

New sources of power, the ability to manipulate material at an atomic or even subatomic level, the ability to manipulate gravity or any of the other forces working on us. Sounds outlandish I know, but if you’d said tried to explain semiconductors only 100 years ago, even the most educated people would have given you a vague look and perhaps told you to take another pill.

Try explaining how magnetism works...

[Scary]

Where did I read the story of a guy who finished a PhD in theoretical physics at a top university to try and find out what makes the world go round, then realised it was money and took a job at an investment bank?

[sasguru]

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

Nah I made my money by investing contracting earnings in BTL.
Yes I could retire now, mortgage paid off, few investments here and there, but I'm too young and private schools and the like are not cheap.

[Mich the Tester]

Try explaining how magnetism works...

Good example. Understanding how it works, and not just knowing that it works could provide the key to making even greater use of it.

[AtW]

Try explaining how magnetism works...

Same way as dog gets attracted by a lamp post...