November, 1999 — The financial pages have recently been replete with signs of the new world to come.
The first, of course, was that the President and the Congress have agreed to repeal the Depressionera laws that prevented competition in the financial services industries. It's a longoverdue improvement, but it really comes down to this: having proved unable to come up with new products to sell you in their own markets, the nation's bankers, brokers, and insurers have decided to sell you each other's.
Pity the poor banks. They once sold you a mortgage and a credit card, but now you can get those anywhere, so their current plan is to sell you insurance and stocks and bonds, which you already get somewhere else. The banks' greatest strength was once the fact that they had a building in every neighborhood where you could drop in and do business. Today, dropping in increasingly means logging on, and those brickandmortar branches are an albatross — the most expensive way to service customers. In Britain, you can do your banking at the supermarket and remember, they had the Beatles first, too. Instead of going to a bank, you'll be applying for a mortgage or a consumer loan at the supermarket, at a kiosk at the mall, or at WalMart pretty soon.
And, of course, online. In fact, what deregulation probably will change most is what bankers, insurers, and brokers put on their websites, because that's where they'll find the people in the "mass market" for financial services. Along those lines, a second recent omen of the future was a study just released by the Investment Company Institute and the Securities Industry Association. It showed that fully half of all Americans own some kind of stock. It's not utopian collectivism, but it's not bad for capitalism.
But with this widespread ownership comes the reality that finance has become more than a mass market product. It has become a mania, a social pursuit. Cutrate stock trading has allowed millions of people to ride the wave and consider themselves geniuses — for the moment. CNBC and other financial news providers offer entertainment to the public disguised as cutting edge financial information. Cell phones can now call you the instant a stock's price reaches a certain level: believe me, if you need to be called by your cell phone the instant stock prices reach a certain level, get out of the market. Now.
And that raises the third sign of the times — the successful initial public offerings — IPOs — of Martha Stewart and the World Wrestling Federation. Are these really worth the billions investors paid for them? Perhaps — it's unlikely that everyone who bought a piece of them was God's own fool. But they are also symptoms of a New Gilded Age, in which anything and anyone can be a brand, a business, a product, a customer channel, a value stream, an investment, all at just $9.95 a click. Buoyed by our own prosperity, liberated by a technological renaissance, we are finally free to pursue the logical outcome of human experience over, lo, these many centuries —thinking about money.
The New Gilded Age
November, 1999 — The financial pages have recently been replete with signs of the new world to come.
The first, of course, was that the President and the Congress have agreed to repeal the Depressionera laws that prevented competition in the financial services industries. It's a longoverdue improvement, but it really comes down to this: having proved unable to come up with new products to sell you in their own markets, the nation's bankers, brokers, and insurers have decided to sell you each other's.
Pity the poor banks. They once sold you a mortgage and a credit card, but now you can get those anywhere, so their current plan is to sell you insurance and stocks and bonds, which you already get somewhere else. The banks' greatest strength was once the fact that they had a building in every neighborhood where you could drop in and do business. Today, dropping in increasingly means logging on, and those brickandmortar branches are an albatross — the most expensive way to service customers. In Britain, you can do your banking at the supermarket and remember, they had the Beatles first, too. Instead of going to a bank, you'll be applying for a mortgage or a consumer loan at the supermarket, at a kiosk at the mall, or at WalMart pretty soon.
And, of course, online. In fact, what deregulation probably will change most is what bankers, insurers, and brokers put on their websites, because that's where they'll find the people in the "mass market" for financial services. Along those lines, a second recent omen of the future was a study just released by the Investment Company Institute and the Securities Industry Association. It showed that fully half of all Americans own some kind of stock. It's not utopian collectivism, but it's not bad for capitalism.
But with this widespread ownership comes the reality that finance has become more than a mass market product. It has become a mania, a social pursuit. Cutrate stock trading has allowed millions of people to ride the wave and consider themselves geniuses — for the moment. CNBC and other financial news providers offer entertainment to the public disguised as cutting edge financial information. Cell phones can now call you the instant a stock's price reaches a certain level: believe me, if you need to be called by your cell phone the instant stock prices reach a certain level, get out of the market. Now.
And that raises the third sign of the times — the successful initial public offerings — IPOs — of Martha Stewart and the World Wrestling Federation. Are these really worth the billions investors paid for them? Perhaps — it's unlikely that everyone who bought a piece of them was God's own fool. But they are also symptoms of a New Gilded Age, in which anything and anyone can be a brand, a business, a product, a customer channel, a value stream, an investment, all at just $9.95 a click. Buoyed by our own prosperity, liberated by a technological renaissance, we are finally free to pursue the logical outcome of human experience over, lo, these many centuries —thinking about money.