Today, I am really concerned about the transparency of any market that I may think of. The famous Efficient Market Hypothesis (EMH) that I have been taught to be the key for an efficient market. back then, I did not have enough knowledge to question the underlying assumptions behind it. It is not late to ask people to rally and ask to dismantle any financial market and financial institution. It is really hard to do but we need to start to think about better alternatives. I will try to post a serie of facts and reasons to bring our thinking and engineering to find a better system that will enable everyone to take risk and invest and make a living from his/her sweat.
- The first important underlying assumption that make EMH a bogus of economics thinking it allows fewer to take advantage of many who are working day and night to payback their loan. While the few are enjoy sunny beach and luxury cars. Everyone should acknowledge that when wealth and liquidity is monopolized can create destruction (to big to fail concept).
- Few of us fail to understand that liquidity is important for a market to function. when the liquidity in the market is limited all industries suffer, and everyone is waiting for the bankers to relieve the market. the best example I can think of is anemia. Anemia is a condition that develops when your blood lacks enough healthy red blood cells or hemoglobin. Similarly, Money is like red blood which help the market to function.
- The current banking system is getting richer and richer, and very single time the market lacks liquidity, FED intervenes and rescue the market. Unfortunately it comes with borrowing cost. In Both case (e.g., with or without the Fed intervention) the market is one more time worse.
Worst our business school unfortunately only taught the skills how to rip others off. I am politely asking that everyone contribute to disseminate the ability of the masses to come with a clever or smart system that can bring fairness to the market.