Ged Carroll

Category: finance | 은행업

Finance is a really odd section for me to have. I don’t come from a finance background, I have no interest in fin-tech. Yet it makes its appearance here on this blog.

When thinking about this category, I decided to reflect on why its here. It’s usually where curated content sits, rather than my own ideas.

The reality of life in the west is that everything has become financialised. As I write this as people think about web 3.0, they are thinking about payment systems first and working about utility later. This implies that the open web we know won’t be part of the metaverse in terms of ideas or ethos.

Instead of economic growth consumer spending depends on different ways of creating credit. Its no accident that delayed payments finance company Klarna is the biggest thing in European e-commerce at the time of writing this page.

Back when I started writing we were heading into the financial crisis of 2008, the knock on effects of that could still be felt a dozen years later and was a contributing factor to Brexit and Trump victories. The ‘occupy’ movement was catalysed by the financial crisis and then turned into something else. For instance it became a pro-democracy movement in Hong Kong.

We had the implosion of financial brands like Lehman Brothers and the Royal Bank of Scotland. This created a lack of trust in business, the media and the government.  We are still seeing that play out today, from cryptocurrency to conspiracy theories and a lack of trust by the public in experts.

  • Cash divide

    The 1990s had a cash divide. A number of years ago in college, I wrote an essay about the role of technology exclusion in society. This internet as a thing was only really starting to get going and we had just changed over the web browsers at the college from Mosiac to Netscape.

    I used to surf the web in 16 shades of grey available on my battered PowerBook 165, when I jacked into the JANET network. Why am I rambling about a geriatric computer and the ‘net before Google?

    Well, I used the web to research my essay and came across an article on the Washington Post about the cash divide discussing a ‘cash ghetto’, increasingly if you had to deal in cash you were on the margins of society. Part of this was down to the laundering of money from organised crime, including the drug cartels. It made sense to move as many people as possible out of the cash economy, but it created a cash divide. The cash divide separated illegal migrants from citizens; criminals from law abiding citizens.

    An article in the Arizona Daily Star, which my RSS feed aggregator picked up talked about the pervasive nature of Visa and MasterCard where cash was once king reminded me of the college essay.

    Visa and Mastercard have moved in alongside cheque cashing services and remittance businesses to bridge the cash divide profitably. Poor people tend to pay more charges than richer members of society.

    You don’t even need to have a credit record or a banking account. There are ways to provide pre-loaded credit cards in the US to bridge the cash divide. From intern payments to staff bonuses can be provided on cards form Visa, Mastercard and even American Express.  Interesting reading check it out. More finance related posts here.

  • The number

    Whilst catching up on my backlog of mails I came across this from CBS Marketwatch on Yahoo! making the number. The number is the consensus that market analysts think that a company will make in a given quarter:

    NOT MUCH SHOUTING GREETS YAHOO EARNINGSYahoo shares (YHOO) got the boot after the company kicked off a fresh earnings season for the online-media group by only just measuring up to expectations, demonstrating what American Technology Research analyst Mark Mahaney called a mantra: “in-line quarters don’t cut it for Internet stocks.”

    Ok, basically what this guy Mahaney is saying that because Yahoo! managed to get their profit for the quarter in line with what a number of market anlaysts expected them to be (based on a guestimate set maybe 90 to 180 days back) then they deserve a kicking.

    Unbelievable, accountancy despite the use of numbers is not an exact science, why?

    • Bills and sales are constantly coming in and out of a company
    • What does a sale really mean? If you sign a 3 year deal for online advertising, should Yahoo! claim that as a sale all at once or claim as the money comes in
    • When is the money in? When you invoice for it, or when it sits in your bank account
    • Is the capital gains made on the building you own and work out of profit?
    • If you had a bumper quarther this time but you know that the next quarter will be soft, should you avoid booking all the sales in to give you an income cushion next quarter?
    • How should you write off the depreciating value of computer equipment, chairs or a forklift truck? There can be more than one way of doing it that will affect the figures

    With this in mind, I would recommend that you read The Number by Alex Berenson, which takes you through the insanity of it all in greater depth.

  • Ugly Americans by Ben Mezrich

    My book of the moment is Ugly Americans by Ben Mezrich. Ben previously wrote Bringing Down the House; a book about a group of maths geeks who take on the Las Vegas casinos by team playing with a gambling system and making a killing at poker.

    In Ugly Americans, Ben turns his attention to hedge funds exploiting the economic collapse of Japan in the 1990s. There are many similarities with the books:

    • They both are written in the same style, paced with a future film adaptation in mind
    • They both alternate chapters of action with ‘expert testimony
    • They both claim to be true, however I have my doubts (names have been changed to protect the innocent et cetera)
    • Both are a ripping read 

    But the polished nature of the read makes me think that its fiction masquerading as truth. And thats why Ugly Americans feels a bit dirty and hard to recommend, despite my enjoying reading it.

    Mezrich feels as if he’s hit his stride with style and format rather like Lee Childs or James Patterson. The idea isn’t the important thing, the truth probably doesn’t matter. Instead Mezrich has a pattern. The key difference to Childs and Patterson is that Mezrich is thinking about the film or TV adaptation from the beginning. It feels cynical. And that’s why the book Ugly Americans feels a bit ugly and dirty for me as a reader. More related content here.