Blowing Up the Financial Business

I hate the financial business!

There I said it.

I love stocks and figuring out what makes them tick, but the business and regulations surrounding this love affair of mine stinks.

See my blog “Why do stocks go up and down?

Can the internet change this?  Can the internet bring together those of us who love equities and be on the same team? (Do-it yourself investors and the professionals) Helping each other exchange knowledge to our mutual benefit.  People helping people by guiding them on making a few dollars or avoiding catastrophic losses. This is my dream.

The financial business teaches domination.  Ego driven financial domination lead the world to the financial collapse in 2008.  We have so far avoided the Great Depression II with massive deficit spending on part of national governments.  Have we learned anything?  I think so.  National governments let the financial sectors grow to a disproportionate level of their economies, and when their financial sectors collapsed the public found out the dirty little secret that everybody in the financial sector knew – the public taxpayers make everybody whole.  The public is now painfully aware of this dirty little secret and is reining in these once dominant financial institutions.

I don’t know if anybody is noticing but domination of anything is in a bear market.  Ask Gaddafi of Libya or Mubarak of Egypt.  Financial Institutions through Basal III are being reined in.

Looking beyond finance once dominant industries are crumbling or dying a slow death.

My two favorite bloggers are Bob Lefsetz and Jeff Jarvis.  Why?  They were actors in once dominant industries that are slowly dying.  Both are now on the outside blogging what they see wrong in their respective industries.  (Is this my future?)  Bob writes about the music industry, the death of the record labels and how the old business model of the LP (CD) is dead.  Jeff writes about newspapers and how this business model is on life support with no answers in sight.

Usually the change agent usually comes from outside the business.  The internet with news aggregators, instant communication with Twitter and zero cost of digital format can run circles around something physical that lands on your doorstep that has a carbon footprint that should make one blush.  Oh, you like newspapers, that’s fine, do your kids, grandkids?  I think not.

Napster – the file sharing service – killed the music industry.  Do the people in the music industry know it yet?  Bob constantly writes that they, the industry people, do not.  The music industry is still suing their customers for Pete’s sake.

Where is the change agent for the financial industry?  The geeks will have a hard time cracking this industry. A lot have tried and many have failed.  Can somebody inside the financial industry change the financial business?  Hopefully.  I’m going to give it a try.

The internet is about social.  It’s about participation.  Kids and young adults are coming together and sharing experiences.  Sharing knowledge.  Collaborating.  The platforms are interchangeable.  Yesterday, it was MySpace today it’s Facebook, tomorrow it’s _____.  How is the financial industry going to respond to this?  So far the response is to block all registered financial professionals from using Facebook.

How is it that I’m on Facebook, you ask?  Simple and sweet, I’m writing and talking about math, with no security recommendations.   My compliance officer reads everything I post to ensure no industry guidelines lines are crossed.  Unbelievable you say, welcome to the finance business.

Am I witnessing and participating in a dying industry as it is set up?  I hope so.  The finance business needs to be opened up – transparent, for all participants.  Conflicts of interest must be eliminated.  Dissatisfied or wronged customers using financial services now have a load speaker to tell their friends how they have been wronged.  (See Progressive Insurance)

The dominant finance business lives in fear of the internet and social media.  Maybe I’m too early with my vision of “modelpriceguy”, however your kids and grandkids will reform this business and I hope I’m around to see it!

4 responses to “Blowing Up the Financial Business

  1. LAURIE STAMP September 7, 2012 at 8:19 pm

    another great article Brian ,
    keep up the great work
    I’m a true believer in MODELPRICE

  2. Kevin September 12, 2012 at 1:30 am

    This was a really interesting article, much different flavor.

    The Facebook rule was a surprise, it’s amusing but can’t you post on Facebook from a personal opinion to buy ABC and XYZ?

    -an interested student

    • ModelPrice Guy September 12, 2012 at 9:58 am

      As an Industry Registrant – both professionally and personally – you are held to a higher standard and must follow the rules of professional conduct. Even though Social Media is new what you personally can say in advertisements and communications is quite restricted, I believe for good reason. Blanket buy/sell recommendations without considering Know Your Client (KYC) rule is not considered good conduct by industry standards. Hope this helps.

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