Finance can only be a tool

Garret 2022-11-11 23:15:49

This is probably the most relevant movie. The whole movie is constantly running through too big to fail. During the financial crisis of 2008, Wall Street has become a cancer of the United States in the uncontrolled capital expansion, but Because it is big enough and the position it occupies is deadly enough, not only can it not be cut off, but it needs to invest more flesh and blood to keep it from breaking.

Real estate has become a cancer of investment banks and other financial institutions that lack physical business, investment banks have become a cancer of the financial industry, Wall Street has become a cancer of the economy, and the economy has become a cancer of the United States. Everyone can't avoid the cancer, but this cancer is poured by everyone with blood and flesh - all participants know that there should be some supervision, and know that the idling collapse in this spiral is only a matter of time. , but become gamblers one by one in the face of huge benefits, because they know that someone else will pay for them. This once again reminds us that a country's national fortune cannot be tied to finance, and financial institutions cannot be expected to use the entire country to pay for it when a crisis is caused after a regulatory vacuum, let alone make financial institutions realize that they can be big enough to avoid Does not fall. In this way, they will only turn a blind eye to all the crises and opportunities until they lose the last weight in their hands.

But a country cannot become a gambler. The country is a public institution that should provide stability for the people, not a shameless intermediary that is controlled by finance and turns the entire country and its citizens into financial blood supply bags. The decline caused by this is only a matter of time, because Any changes on this basis, any remedies, are useless to quench thirst.

In many of these ways too big to fail. Real estate is too big and too important to the people and the economy to fail. Insurance companies are too big, and they can't fail because they can clamp down on many important joints in the United States and even Europe. Even the government tries to avoid the rules of explicit control, and the ideology of the people and the country strongly demands freedom and democracy, and opposes any form of government control until the crisis is imminent, and cannot fail. One piece fails to make the huge America crumbling - but isn't America too big to fail for the world? As a result, the behemoths were connected in series in the face of danger, and there was no chance to even think about the possibility of setting fire to the company one day, and all the acne could only be digested in the long future.

But this is not the most terrifying, because the wildly expanding financial speculation is hollowing out the real economy of this country. This is evident in General Electric's phone, which slammed the final hammer as the phone rained down. Financial speculation is too lucrative. Compared with this, industries such as electrical appliances, equipment, and machinery that require huge investments and have such low added-value risks are really worse than garbage, even if it is the lifeblood of this country. But who cares? All this country, everyone in this country needs is money, money, money!

It seems that all this is because finance is too free, currency liquidity, bubbles are too big, and everything needs to be managed rigidly. But even if it can be completely controlled, is it really feasible? The answer is also no. In today's world, seemingly peaceful, all countries are actually full of crises. Only by continuously accumulating capital with a sound economic system can we maintain national development and stand between countries. And no matter what industry wants to develop, it needs the economy to maintain a certain amount of liquidity, which is destined to open the market can not be closed again, can only be more and more open. Today, this financial industry supporting the industrial economy is inherently a field that strives to walk a tightrope between stability and liquidity.

Finance can only be a tool, not the foundation of a country.

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Extended Reading

Too Big to Fail quotes

  • Richard Fuld: [on the housing crisis] You know, people act like we're crack dealers. Nobody put a gun to anybody's head and said, "Hey, nimrod, buy a house you can't afford, and you know what? While you're at it, put a line of credit on that baby and buy yourself a boat."

    Joe Gregory: [chuckles] You heard anything from Buffett?

    Erin Callan: He's asking for preferred shares at 40, with a dividend of nine percent.

    Richard Fuld: [annoyed] We were just at 66. What the fuck?

    Joe Gregory: Maybe it's just an opening gambit, Dick.

    Richard Fuld: Sounds more like a goddamn insult!

    Erin Callan: Dick, we're at 36 right now. We haven't been anywhere near 66 in months. The markets like Buffett. His name will push the price up overnight.

    Richard Fuld: You know, I don't care who he is. I am not spending $360 million a year for the pleasure of doing business with him. Real estate will come back.

    Joe Gregory: Koreans have been sniffing around.

    Richard Fuld: There you go. And they won't steal us blind. I've seen this before: CEOs panic and they sell out cheap. Right now, the Street's running around with its hair on fire, but the storm always passes. We stand strong, and on the other side, we'll eat Goldman's lunch.

    Erin Callan: So what do we do about Buffett?

    Richard Fuld: Screw Warren Buffett.

  • Ben Bernanke: [Having breakfast with Henry Paulson] Lehman's down another 10%.

    Henry Paulson: You are not gonna let me get down a single bite, are you?

    Ben Bernanke: This is why I have oatmeal.