I think the financial sector is in big trouble, all around the world. It seems like it has stretched beyond it's means and it's only struggling to survive at this point. And I am not just talking about economic problems, but it seems like it is decaying from all sides.

Financial Instruments

It is a healthy ratio for the financial sector in the economy to be about 1-2%. Certainly there is some need for credits to start up businesses, and there is a need for a good stock market or some sort of security exchange to fund projects.

Now currently the financial sector may be as big as 30-40% of the GDP in some cases. This is a massive distortion of the economy, and it's destroying the economy rapidly. There is nothing wrong with trade, but there is everything wrong with toxic (scammy) assets being traded all over the place.

Everyone wants a quick buck, so of course gambling style trading will be prioritized instead of real value based investing. Build a farm, it can feed many people. Create a rehypothicated credit instrument, and it has hardly any use case, except for supplying the owner with a stable interest income, if the debtor can pay.

But the credit system has been stretched out so much, that people simply can't pay anymore. People are living from paycheck the paycheck, full on credit card debt, mortgage, student loans. Most people are close to bankruptcy.

Most credit is covered by assets, so it will either end in all those assets getting foreclosed, which will mean a massive crash, specifically in real estate and stocks. Or the credit will be extented which will result in close to hyperinflation, given how the currency has no real value anymore.

Banks

My brother works at a bank and recently he has been offered to become the manager of the local branch. Not a big deal, it's a regional bank with a couple of branches in big cities and he was offered to become the manager of one of the branches. But he declined it in the end, mostly because I persuaded him, but also because he sensed it too that banking is not what it used to be.

Basically his salary would have only went up not too much, but his responsibility would have increased by ten fold. So it's really not a net win if you rise in rank these days. Of course many greedy college guys who just finished college want to become banksters, and build a career there, but little do they know that it's not exactly as the movies portray it.

First of all an average bank clerk earns a little bit more than a supermarket worker, depending on what department you work for. For example in the consumer credit department you earn a couple percent for every person you refer so that's like 1-2% per referral. So your average monthly bonus payment is like 200-500 EUR on top of your salary, even at 500 EUR, and you maybe got like 30-40 clients max, not more than that, so at best case scenario you make 400 EUR extra besides your paycheck, and it's distributed on a yearly basis as a bonus.

So that is 4800 EUR extra MINUS TAXES, per year. Well that is not that much if you think about it. So you make about 2000 EUR monthly MINUS TAXES as an average clerk.

And of course this is not like in the movies like Wolf of Wallstreet, you are not allowed to phone your customers or harrass them, so it's not like a bucket shop where you sell scammy instruments to old grannies.

No you are not allowed to harass your clients and you are also not allowed to refer them too aggressively or tarnish the brand of the bank. So it's pretty hard to refer people, and one mistake and you are fired.

So the risk is actually very big, you can get fired easily, the bankers don't fool around with amateurs. They recruit the best workers and they pay them shit.

So at this point you are better off working at a restaurant or supermarket, because your salary will only be a little bit lower, but the stress level will be astronomically lower.

So even if the financial sector has grown a lot and they make more money than ever, they don’t redistribute their money, not even to their workers. In an average bank your relative salary is very low, certainly not worth for the stress that you are under.

So if you are considering a career in banking, then think again, you will barely make money and the stress is really not worth it.

My brother did the smart decision and he actually is saving up some money now to start up his own business. He is about to quit finance, as I did a long time ago, and start up a fishing business, there is a lot more money there.

Conclusion

So it’s really interesting to watch the entire industry decay under it’s own weight. People have no more money for more credit, and the banks are tightening their belts as they are paying their own workers less and less, while all the money goes to the top.

And they haven’t even tasted cryptocurrencies yet. This decay started long before cryptocurrency existed. Perhaps cryptocurrencies will be the Coup de grâce, that is why we see the banks scrambling to get into crypto, as they are running out of ideas to make money.

Certainly if they would get into crypto, they could save themselves, while also reform their corrupt business practices. Providing crypto bank accounts for the population would be massively more honest than providing crappy fiat accounts under FRB bondage.

So it remains to be seen, perhaps in the next financial crisis, that is just around the corner, we shall see how the banks will respond to it. And whether they will reform themselves or double down on the corrupt practices.

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Sources:
https://pixabay.com

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