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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: chic_hearne who wrote (26140)10/10/2000 10:07:21 AM
From: pater tenebrarum  Read Replies (2) of 436258
 
the implications of falling stock prices w.r.t. employee stock option plans are indeed grave. for one thing, big cap techs like CSCO and MSFT never paid a cent of federal income tax over the last year due to tax credits received when employees exercised their options. the amount of tax credits in both cases is equal or surpasses net profits.
in other words, no stock options exercises, no profit.

it is a huge pyramid scheme, the continued existence of which depends on rising share prices.

as stated before, it is certainly true that the stock market has become very important to the real economy...it dwarfs the real economy in transactional volume and many of the 'virtuous cycle' components depend on the stock market's performance.

conclusion: there will be a big effort to keep it going...
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