Welcome to the bloggy home of Noah Brier. I'm the co-founder of Percolate and general internet tinkerer. This site is about media, culture, technology, and randomness. It's been around since 2004 (I'm pretty sure). Feel free to get in touch. Get in touch.

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What is Finance?

The idea of finance, as explained by this post from The Baseline Scenario (which I’m now subscribed to) is pretty simple:

The financial sector connects savers and borrowers – providing “intermediation services”. You want to save for retirement and would obviously like your savings to earn a respectable rate of return. I have a business idea but not enough money to make it happen by myself. So you put your money in the bank and the bank makes me a loan. Or I issue securities – stocks and bonds – which you or your pension fund can buy.

What happens when you put a lot of money in one place, however, is quite a bit more complex and that’s what the author tries to explain. The more I read this stuff, the more I think we’re bound to swing back to the simplicity of something like peer-to-peer lending.

September 3, 2009