Of chips,dips and trips to bankruptcy and back

So the other day, one of my friends was patient enough to take the trouble to explain the concept of investment banking. He used the great American fiasco as an example to run me through the motions. I was flabbergasted to say the least. And at the end of our session, I had but one question.

So investment bankers make money by selling the idea of money?

Apparently, my question was not just a valid one, but also, the answer is a resounding 'yes'. No wonder the economy is in such devastating shape. Most of us honest workers, who actually have a skill or two to sell to the world, and are willing to give discounts and make other such compromises, don't make a hundredth of the killing most investment bankers might refer to as their monthly stipends.

I mean, seriously, I was in shock for the rest of the evening. I just couldn't get over it. My friend, who had gotten pretty excited just by talking about so much money, seized upon my silence as an opportunity to drill some more disillusioning information into my already fried brain. When people sell stocks, he said, they aren't selling the actual value of the company, but instead they sell to the innocent public (such as me) the value they decide to put on themselves.

That really knocked the breath out of me.

Especially since I, with my impeccable sense of timing, had chosen to invest in stocks for the very first time ( I remained a stock virgin as long as I could) just a couple of months before it all came crashing down. I'm still licking my wounds. But the idea that what I'd actually invested in was a lot of hot air, well, that got me pretty upset.

It's a matter of trust, he said, trying to calm me down. The companies sell the worth of their trust, and when they do well, the price on the trust goes up, and so does its stock. Hmph. And I'd spent my life imagining that some agency in the world puts a price on the company, and then, just like breaking up a cookie, they distribute the pieces, the ACTUAL pieces to everyone who wants a share.

And to think, to actually think, that gambling, where you buy a chip with actual money, and the chip is only ever worth that amount for the whole night, and if you choose to come back the next night, will still be worth the same, and if lady luck chose to smile down on you and multiplied that one chip into a prosperous chip nation, sitting in a fat pile on your side of the table, and nobody else decides that any one chip is going anywhere, nobody but you, and you couldn't possibly sell the idea of yet-to-be-born chips to anyone else at the table even if you happened to look like Helen of Troy dressed like Paris of Hilton...to think that gambling is illegal.

P.S: Neither me nor my alter-ego are in favor of gambling, as a sport or alternate profession or otherwise.