The Madoff Economy – NYTimes.com

Op-Ed Columnist – The Madoff Economy – NYTimes.com.

Was reading through this article and it crystallized what I felt back in university. While reading my texts, I felt that there was too much “financial” and “money” magic in this industry. This article did a better job at describing what I should also have questioned during that time.

Probably I would have been attracted to the industry if there was not such a distinct differences on the prestige between the front-office, middle-office and back-office.

With the severity of this recession/depression, it will be weird for finance students to study and extrapolate the equity market trends and returns over the next few years. Chances are, finance students will have to study the market all over again.

That being said, I still believe in the fundamental value that the banking system provides to the economy – In terms of identifying the lemon companies, and also to provide a basis for valuing the company.

The fundamental flaw with equity market theories, or with any public companies, is the increasing pressure to deliver year-on-year profit growth. The underlying cause of this flaw can be attributed to capitalism, which states that the welfare of an economy can be measured by tangible and material consumption of the people in the economy.

The emphasis on consumerism to sustain a market based on capitalism is not feasible, and increasingly what I witness is a market trend towards a “buy more, buy more! Consume more, consume more!” mentality that is pretty retarded. People move away from their inner sense of peace and tried to seek comfort in the pursuit of material consumption.

The movie “Fight Club” summarized it well when it quoted that people have evolved to “work in jobs that they hate, to buy things that they don’t need, to impress people that they don’t like.”