The Investment Banker Joke – Douglas E. Castle

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Stereotypes - Douglas E. Castle

Yes, ladies and gentlemen. There is, unarguably, an increasing disconnect between Wall Street and Main Street. And, for the most part, the good folks residing on Main Street (situated somewhere between Lake Wobegon and Anytown, USA) are on the losing end of the misunderstanding, and will probably continue to remain so until a major disruption brought on by Peer-To-Peer lending and financing or crowdfunding takes place.

It seems that most everyone has something negative or nasty to say about investment bankers; sadly, I’ll confess to being conflicted in that both the critics and objects of their criticism are among my friends and acquaintances.

There’s a celebrated joke that’s made its way around business and financial circles over the years. It goes something like this:

An investment banker walks into a room where his colleagues are in a meeting. “I’ve got good news and bad news,” he announces. “The bad news is we’ve just lost $100 million. The good news is, it wasn’t ours.” An associate raises his hand. “What was the bad news again?”

It’s humor, but if you were alive during 2008 to 2009, you’ll know that there is more than a grain of truth to the tale. Whether we’re talking about brokers, bankers, or even your most trusted financial advisor, you are probably finding it increasingly uncomfortable to rely on anyone else to care about your money and keep it safe.

Thank you, as always, for reading me.

Douglas E. Castle

Please join me on LinkedIn


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Perspective Is Wisdom - Large
D.E.Castle's Daily Business Advisory Wrap-Up.
Skim It. But DON'T MISS It.
This site is the Management Consultants' and Chief Reconstruction Officers' best all-industry guide to analyzing, diagnosing, devising a strategy, creating either an Action Plan or an Emergence Plan and overseeing and monitoring the successful implementation of either in order to ensure the client organization's optimal, sustainable profitability. These plans are always made scalable to accommodate the size and needs of the client, whether it is fast-growing young company with an aggressive and ambitious agenda, or whether it is an older, larger, well-established business which is experiencing problems or which is at a crucial decision making point in its evolution as an entity, and which requires sound advice (and often implementation oversight and assertive "hands-on" assistance in the form of a powerful third-party representative agent or a an expert in the art of negotiation as its appointed "point person") regarding its next steps. In the alternative, Douglas E. Castle is expert at helping fast-track, rapidly emerging companies to growth through acquisitions, mergers, licensing, branding and both domestic and international strategic joint ventures to access better, more efficient supply chain sourcing and to open up wider global markets to dramatically increase the scope of possible new revenue opportunities.


Why Prices Seem To Be Increasing Everywhere – Douglas E. Castle

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Why Prices Seem To Be Increasing Everywhere

By Douglas E. Castle

The primary forces which are driving prices ever-upward in the United States economy are entrenched flaws in the economic system, which I will endeavor to isolate, identify and describe in this brief “read it and weep” article. While the situation continues to worsen, economic policy steps and changes in consumer habits could go a long way to bringing prices for durable and non-durable goods and services back within the realm of affordability. Please read on:

Flaw 1: Too Much Consumer Credit Available:

While access to consumer credit does increase consumption and can indeed be economically stimulating, it also changes major consumer acquisition decisions regarding durable goods (cars, appliances, homes…) from being cost-sensitive to merely being debt/lease service affordable. If I can drive a $55,000.00 automobile for a reasonably affordable $350.00 per month, I will either lease or purchase the car on installments (regardless of the real “cash” price) without even stopping to think that a car of equal value would have only cost me $27,500.00 five years ago. We’ve become obsessed with monthly payments while becoming irresponsibly uninvolved with real costs, which continually rise in response to the availability of credit. Simply put: More credit availability leads to steeply increasing prices.

Flaw 2: Too Little Personal Saving

The average United States taxpayer saves less than 10% of his or her annual income due to cultural changes, the growing disparity between wages and household expenditures, and due to the irksome fact that an increasing percentage of what used to be disposable personal income is now going toward the servicing of consumer debt. This leads to increased borrowing, which brings us back to Flaw 1, above.

Flaw 3: Third-Party Reimbursement And Payment

Why should I decline a medical test (whether truly necessary or not) or any medical or healthcare protocol when my insurance company will pay for all or close to all of the cost? Medical costs (as well as healthcare insurance premiums) have risen astronomically because prices do not reflect the ability of individuals to pay, but instead, reflect the willingness of third party payers (i.e., insurance companies) to foot the bill. This third-party payment addiction (just like debt addiction) takes the focus off of the real cost and necessity per procedure, treatment or medication, and replaces it with a focus on “how much does my insurance premium cost and how good is my plan coverage?”.

Flaw 4: Too Many Monopolies Or Protected Territories

Without mentioning the names “Comcast” or “Xfinity” (two monikers for one of the least-beloved and most hated companies by users/consumers), government-permitted or inadequately-regulated trusts or constructive monopolies make competition all but impossible for new market entrants to offer better, cheaper alternatives to those offered by the Goliaths which dominate the cable/telephone/ISP service sphere, as well as the consumer spheres for most major utilities – all of which are necessary for ‘normal’ living. Impediments to fair and open markets invariably lead to lower quality and higher prices to consumers.

Flaw 5: The Notion Of “Too Big To Fail” And Resultant Bailouts And Subsidies

When governments selectively elect to print more money, allocate more of public funds or increase taxes in order to subsidize the inefficiency and provide cover for the mistakes and misdeeds of large institutions (under whatever guise that this is done), it activates cost-push inflation as these subsidies and bailouts are paid for by consumers and taxpayers. What is worse, is that these colossal corporate wastrels are all but encouraged to continue behaving poorly as there is absolutely no incentive (either negative or positive) for them to mend their wicked ways. These beached whales (with extensive ties to government policy and largesse) will always be pushed back into the ocean by the governmental administration. Consumers get poorer while the corporate elite continue to receive paychecks and bonuses in ever-increasing, stratospheric amounts. Unconscionable? Yes, indeed!

Flaw 6: Premeditated Obsolescence

The adoption of new technologies is a natural outgrowth of scientific advancement and market demand, and that’s perfectly fine; but when you buy a generational model of something that you use (either a product or a service), such as an iPhone 5 – just to cite one example – and the company which manufactures or provides the product or service stops supplying peripheral support for your version and all but forces you to buy the newer, more expensive version, prices are driven up as unwitting or unwilling consumer hostages line up to trade in the increasingly-useless older model for the shiny new one. This inflates costs (i.e., the new version is more expensive than the old), and increases the requirement to buy replacements, virtually turning a durable good into a consumable, depletable item.

Flaw 7: The Disappearance Of The Middle Class

As the middle class shrinks to an ever-decreasing percentage of the total population, the wealthy become wealthier and can afford to buy more, while the poor proceed to either rely upon government aid (quite inefficient and expensive) or live an increasingly leveraged lifestyle. Please refer to Flaw 1, at the beginning of this article…

As always, thank you for reading me.

Douglas E. Castle

Please join me on LinkedIn.

Labels, Tags, Categories, Keywords And Search Terms For This Article:

bailouts, subsidies, vanishing middle class, business, economics, inflation, consumerism, debt, obsolescence, too big to fail, monopolies, trusts, Comcast, iPhone, Douglas E. Castle, leverage, credit, capitalism, inefficient markets, third-party reimbursement, insurance, consumer credit, taxes, monetary policy, fiscal policy


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QUOTATIONS - Immortal Wisdom - WORDS - The Building Blocks Of Language - Linked Image - By Douglas E Castle














more Quotes

This Day in History


NOTICE









Messy Matrix (Eh, Neo?) Of Social Media Sharing Links
View DOUGLAS E. CASTLE's profile on LinkedIn
Share this page
RT Button
Contact Douglas E. Castle Follow Me on Pinterest
Follow Douglas E Castle on Quora


***************
This site is proudly affiliated with Global Edge International Consulting Associates, Inc. ["GEI”]
Free Subscription to The GEI Business Daily!
Sign Up For Our Free GEI Newsletter!
Receive Our Free GEI RSS Feed!

***Follow GEI's Company Page On LinkedIn!

Respond To Douglas E Castle
http://bit.ly/CASTLEDIRECT

Perspective Is Wisdom - Large
D.E.Castle's Daily Business Advisory Wrap-Up.
Skim It. But DON'T MISS It.
This site is the Management Consultants' and Chief Reconstruction Officers' best all-industry guide to analyzing, diagnosing, devising a strategy, creating either an Action Plan or an Emergence Plan and overseeing and monitoring the successful implementation of either in order to ensure the client organization's optimal, sustainable profitability. These plans are always made scalable to accommodate the size and needs of the client, whether it is fast-growing young company with an aggressive and ambitious agenda, or whether it is an older, larger, well-established business which is experiencing problems or which is at a crucial decision making point in its evolution as an entity, and which requires sound advice (and often implementation oversight and assertive "hands-on" assistance in the form of a powerful third-party representative agent or a an expert in the art of negotiation as its appointed "point person") regarding its next steps. In the alternative, Douglas E. Castle is expert at helping fast-track, rapidly emerging companies to growth through acquisitions, mergers, licensing, branding and both domestic and international strategic joint ventures to access better, more efficient supply chain sourcing and to open up wider global markets to dramatically increase the scope of possible new revenue opportunities.