The Century of DIY part 3

How Crowdfunding and allowing you to invest in the world's financial markets is funnelling your money into the biggest hedge fund. 

Twitshot

Not since the industrial revolution has the world seen such a tsunami of technological change. A change that affects each and every one on the planet, in fact many maintain that the industrial revolution was but a blip compared to what we are living through now. The big difference now is who is paying for it. The steam revolution was bankrolled by the new middle classes and industrialists and built on the backs of the new factory workers. The tech revolution is being paid from your pockets and history has taught us some important lessons about betting on the wrong horse when you know nothing of the stables.

Don't panic...SELL!

Toward the end of 1929 Wall street was looking shaky, the Dow Jones had taken a tumble in the spring but rallied again after the National City  Bank had propped it up with a $25 million injection but those in the know knew that it was time to cash their chips and move to another table. By the end of October chips were being cashed quicker than the market to sustain and “Black Tuesday” signalled the beginning of a world depression. The Rockefellers and Billy Durant made a brave attempt to save their investments but with over $30 billion (when $30 billion was a sum of money) wiped off the markets in a matter of days, even they could not stem the tide .

There have been many market crashes throughout history, most bizarrely the  Tulip mania crash of 1637, and more recently “Black Wednesday” in the early 90s, the dot-com bubble at the end of the millennium and the one that we are still reeling from now that seems to have begun when Lehman brothers fell in 2008. The nature of markets is boom and bust, when speculators see a chance at massive returns they will do what speculators do; speculate, and when the nuts and bolts of the stock will no longer support the market value the bears move in and the prices fall.

Tulip Mania - Middle-ages dot.com

The issue is now who loses when the markets slump. In 1929, as the new middle classes and industrialists lost fortunes on the markets, the working classes lost their work.  We also need to understand what happens in a bear market. A bear market, as defined by Investopedia  is more than 20% downturn in multiple stock indexes in a 2 month period and in the crashes this happens in a matter of days but those who are close to the market react quickly and sell their stock before losses bite too hard, leaving those outside the loop to take the brunt. Around the end of the 90s, when Charles Schwab and E Trade introduced online trading, the markets became available to all. The flipside of this is that it made $billions of private funds available to the markets. Many of the these services allow individuals to trade with a credit account, in other words they allow you to speculate much more than you may have to lose. Speculation drives prices, speculation by individuals without the same access to information or understanding of company values as professional traders. This is a fantastic democratisation of the markets but when it goes wrong it is the inner circle that gets out first drawing the profits up the food chain and the losses to the little fish.

Crowdfunding is seen as the new way for the common man to get in on the investment ladder; services like Kickstarter and Crowdcube allow anyone to become a venture capitalist by investing in start-ups and expanding businesses. In a world where the banks are becoming all too reluctant to invest in new and uncertain ventures, the householders have come to the rescue once again. Mark Shuttleworth’s recent Ubuntu Edge campaign, while unsuccessful in raising its target $32 million, did reach and unprecedented $12 million, proving that if you have the right concept you can get people to buy a product that is still on the drawing board. This gives many commercial venture capitalists the opportunity to sit back and allow ventures to fly or flop before they get their hands dirty.  

Stop grumbling and build an app!

The democratisation of investment would be a huge opportunity for us to build a nest egg from our disposable income but in an age of austerity and credit crunch more of us are speculating on credit with a dream of joining the ranks of the steadily growing number of superstar billionaires. It seems that, not satisfied with consuming commercial products at an unprecedented rate we are now expected to dig deep to facilitate the financing of more stuff for us to buy. The message is clear, with pension and equity funds managed by professionals losing our money in toxic investments and flawed strategy, building that retirement nest egg is another DIY responsibility. 

Part 4: How, after a brief flirtation with social welfare, government has put your welfare back in your hands    

who's to blame

Since long before living memory commercial industry has invested trillions to develop products and services that have satisfied needs, both real and fabricated. 

Trillions have been invested to make marketing ever more persuasive. 

Even more has been spent to create new devices that both address needs and desires and open new lucrative markets for their maintenance, upgrading and accessories. 
 
Trillions upon trillions have been conjured up by financial institutions to enable everyone to acquire them. 

..and we are to blame because we bought too much?

or being punished because we just plain ran out of money

He's not the father of modern wisdom, he's a very naughty boy!

More and more, Greece is being vilified as the enemy of European unity, the weakest link in an otherwise world-class currency and caricatured as lazy and feckless. This wave of enmity is beginning to serve but one purpose, lining the fingers up in one direction. While Europe points in one unified direction they can avert the scorn from themselves.

The Greek people are not lazy or, indeed, feckless. Yes, they do like their afternoon nap but they will then return to work until 9 or 10 in the evening. They are as hard-working as anyone in Europe, go on have a look round your office or place of work now, how many are skivers? What are you doing? Reading my blog that's what! As for feckless, well they managed to pull the wool over Brussels' eyes, didn't they?

I spoke to a friend yesterday who told me of his chronic insomnia, "How can you sleep with all this going on?" thing is, this isn't the first person who has told me this. Since I started haunting my own house I have discovered that I'm far from alone.  

It is a convenient oversimplification to say that Greece is bringing down the Euro, it was a flawed plan from the beginning, synchronising such diverse economic strategies was always going to be a tough challenge. It is not Greek laziness or fecklessness that is at the root of an economic avalanche that could, possibly, destabilise even the Dollar. Let us remember that Lehman Bros was brought down by some of the smartest suits in Wall street, Iceland was bankrupt without a siesta or a moustache in sight. 

The clever suits' austerity measures are not working and the same people are telling us that we have to bite down a bit  harder. 

There is no more faith and precious little hope, all we see at the end of the tunnel is a toll. The managers aren't managing but we've all known that for ages. 

Greece doesn't need any more lessons, it needs someone who can teach!   

Some of you who regularly look me up will have notice that I've been a bit lax, well, I'm back. 
Come back soon to find out the fate of our own feckless revolutionary, will he finally take office or is he doomed to wear football gloves in the prison showers.    

Tough at the Top!

Greece is at present a nation in free-fall. Riots are nothing new and I have seen riots about just about everything from globalisation to regimes that have been deposed for nearly forty years. What is more relevant is the action of those who have no time to unite and destroy. Nothing. The majority of the worst hit are doing nothing but trying to get though to the next day, resigned to the belief that resistance is futile. What will be will be.