my thoughts.....

constellation, assimilation, formation and expression of my cerebration!

Tuesday, September 30, 2008

Financial Innovation? ‘Bull’ Shit!

Innovation – it had made our life better; it had made the world better; it had carried world’s great economies through decades. But why is the same making us all very jittery and shaking right now? As you think of innovation, invention of the wheel is the most fascinating innovation ever by human beings. Invention of the wheel is what drives the tangential impetus of the earth today. It is the reason why we can go across the globe before the sun rises again. It has generated fortune for the world over the past several centuries. It has been such an essential building block of our everyday life.

If you take any great innovation and pay a closer look at it, you can derive the very same characteristics among them, which actually make each of them an Innovation. Take the invention of electricity, the invention of telephone, the invention of computing device or understanding of genetics; you can realize how these innovations have built the world better for us to live. An innovation should have the inherence to produce healthy generations of applications that are useful to mankind; It should have the critical character of centrality; It should have the power to be a building block.

Why should an innovation be a building block? Because it has to necessarily build the world! You take a wheel, attach it to another one and use it to move things from one place to another. You build carts, bikes, cars, buses etc. around the wheel. You can add value and create newer, better and useful utilities and applications. You create a true demand for it as it is after all useful for the world. The world consumes and the cycle of innovation, value addition and application continues to move the world forward and build it higher.

How and how much more the world remains to be built is a very important question? Only this question could rightly answer the mankind who are in the quest of more innovations. Those innovations will not only continue build this world better but also our life too. But why has the latest innovation – financial innovation - faltered miserably and caused the world to destruct instead of building it? The reason is very simple – it did not have the power to be a building block. What could you build around the baseless speculation of mortgage-backed securities keeping gaining a value that are neither worthy to start with it nor It being added any value later on!

Most importantly, nothing can be innovated out of money as it is an outcome of value-addition but not a value-addition itself. One innovation gave us a wheel; another one has made us a wheel. MAY GOD BLESS THE WORLD!

2 Comments:

  • Wheel & Money.., good one keep continue.

    By Blogger S.Sujai Gangatharan, At October 4, 2008 at 3:14 AM  

  • Mani,
    Not every innovation is productive. Both Nuclear Power and Nuclear weapons are innovative ways of using the relation between mass and energy. One is productive (yet controversial) and one isn't. So, MBS was innovative. Only, what they thought to be a Money Bomb turned out to be a ticking time bomb that just might blow up this economy....

    By Blogger Karthikeyan, At October 6, 2008 at 10:37 PM  

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