Modern family: Addition

Wall Street Financial truth (1)

In my previous life, I read a book written by author, Andy Kessler.
He has a background similar to quite of the people in his industry. He studied computer software in University. Because of this background, he entered Wall Street as an analyst in the
semiconductor industry, and because he saw through the ugliness of Wall Street, he left the field in anger.

He told a story about Microsoft manipulating its stock price:
Once, Microsoft wanted to set the price for the allotment of shares for employees, so it held an
analyst meeting and persuaded the analysts to lower Microsoft's rating: "At the meeting,
President Jon Shirley said: 'I want to make a profit forecast for everyone. To express my
opinion, some analysts here have estimated estimates that are too high—I won’t name names,
you know who I’m talking about, and they should be revised downwards.’” For their own
benefit, how dare analysts offend Microsoft, Can only obey unconditionally. As a result,
Microsoft's stock price fell 4.5% that day. "I got up to go to the bathroom, and when I came
out of the conference room, Bill Gates and Jon Shirley were standing there laughing so hard, I heard Gates say, 'It's a lie, it's so much fun.'" Oh my God!Gates is my idol, and "they" are
playing the market like a puppet.

He said that he felt he was too stupid. Further in his book he described that he has encountered many similar
incidents in Wall Street for more than ten years, such as designing trading models to help rich
people evade taxes, and using financial leverage to collect money.

The story described by Kessler made me realise something very important as it was sort of like waking up from dream. Kessler bravely and boldly exposed the ugliness and greed of Wall Street, and further confirmed my new found understanding that I was been unable to explain and understand for a long time in my previous life and that is to deceive the public for your huge profits and climb at the top because only few rich people make real money.

This book that says, 'In the Wall Street stock market, on one side are the devil-like elites with high IQs, and on the other side are countless stupid individual investors, that is, 'retail investors'. If they don’t understand securities investment, who will you kill if you don’t kill them? Individual investors always wait until the stock price rises before chasing up and buying, and then complain about the stock price
falling; It will rise again, and I will blame you when the price falls.' These words are said by the author Kessler, but they are not completely true. Even if retail investors learn to invest in securities, it is useless because information flow in this industry is seriously asymmetric, just like playing poker, No matter how good cards you have in your hands if whole game is rigged from the very beginning, do you think you can win?

The dignitaries of the financial institutions involved in the "creation of wealth" build a debt pyramid with financial assets, magically transformed the "wealth", and then charged super high management fees with virtual excess profits, creating a Perfect Ponzi schemes one after another—continuously using the
money of those who came later to fill the holes in the front.When borrowers start defaulting on their debts or failing to pay their loans, the bubble bursts and "wealth disappears" into the pockets of the wealthy.

Then question comes; How do America's "smartest people" make money?

Who in America earns over a million dollars a year (especially after internet boom)?In addition to CEOs and big bosses, it's lawyers and bankers (collectively referred to as financial services such as transactions and fund management on Wall Street). What is intriguing is that neither of these two professions themselves create a penny of
wealth, but only redistribute existing wealth.

Now here comes a question then that if they don't produce wealth, so why should they take so much?Let me give you an example. It's a real incident which happened with one of the friends of my mother Claire. A few years ago, Lucy was involved in a car accident in New York and injured her neck. The insurance company was willing to pay 200,000$ in compensation after evaluation.