Dynamite Economy 4.4.1 Non-Factor of Productions (Financial Instruments)

Oct 28, 2008
Solvere Lim
Cognose.blogspot.com
CtS Cognoscere tenus Solvere @ www.cts-ideas.com
Cognize before Happening
Solving beyond Root Cause

The invents of Black, Scholes and the like are creating instruments whose values are not subjected to real market supply and demand, but by formulas, but by human decision makings.

Human decision-makings, when not subjected to the immense law of nature is as good as fiction, - subjected to human greed and inadequacy, promise riches beyond dreams, yet deliver horrors beyond hell.

This has failed the very basic of measurable, all three of them – accountabilities, transparency, while losses are as good as pouring good money into a bottomless pit.

“Sorry sir, your investment is now worth nothing!” as one banker told an old man who put his life long savings in Lehman’s instruments.

Derivatives, Collaterals, Options are fabrications of human, expose no facet to be measured, stand on no ground to be realizable, while the values and prices detached from each other.

Did they channel the wealth, even a fraction of the whole sum, into any real wealth creations?
NO!
Therefore these are not critical to market functioning – they can be eliminated.

With Market slumps, investors withdrawing, this is the best time States joining hands together to dissolve all these activities.

With slow down in economy, helping economy to grow is the highest priority.
Therefore transaction credibility, improving efficiency, economy of scales, while cutting agencies’ costs are what can be done, must be done.
Before this window opened, it was already recommended to start with banking, finance, basic insurance, health care.[1]
With this window opened, we can now cover cashless, electronics transactions.
These will create a lot of constructive jobs for programmers(who other wise may become hackers), accountants, engineers(who otherwise may become traders).

Which one created real wealth?
Which is a more sustainable path?
Which one mitigate crimes, before happening?
Which one provide self-esteemed and gains others’ respect?

[1] Dynamite Economy 3.11 Approach - Finance Industry, Sep 22, 2008, Cognose.blogspot.com