Investment Bank Converters

So, the banking crisis and the internet. If there is anything to be learnt from this sorry mess, it is that when it comes to financial nouse, skill and knowledge, the banking sector knows as much, or as little, as we do. Paying a hedge fund manager or investment banker to blindly stumble from disaster to disaster would make me somewhat peeved. No doubt, those with substantial pensions or other investment funds may be feeling this way already.

So why not make these mistakes ourselves? If anything, failure would be easier to swallow…

And as such, the beauty of online commerce rises once again with a solution. Disintermediation – the idea that two parties can engage directly in profitable exchange without needlessly lining the pockets of incompetent third parties – manifests itself within such excellent sites as ebay and betfair. And for those looking to invest, Zopa may provide the answer. Well, according to Rory Sutherland anyway. And he’s right about quite a lot really

Zopa allows you to lend money to people at a rate and level of risk you chose. You can spread your investment across a wide range of borrowers, with healthy returns reported. More interestingly, and in the spirirt of Dragon’s Den, you can also invest in individual projects and borrowers, whose loan requests come complete with photographs and short biographies. Far from being just a good potential investment vehicle, I also looks great fun.

I wonder if Zopa could do for Morgan Stanley what Ebay did for Cash Converters. I do hope so

My favourite in this new p2p investment world comes in the form of Kiva. Kiva is a charitable organisation which allows you to make interest free loans to 100’s of small businesses all over the world. Rather ironically, accoridng to the site, defaults are genuinely rare.

Can’t help but think that if the internet is all about cutting out incompetent, annoying, self important middle men, then I can think of few more worthy of the chopping block than charities and bankers.