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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.00

+0.2%

Nov 11 4:00 PM EST

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To: t2 who wrote (81792)	9/14/2001 8:27:28 PM
From: Ira Player	Read Replies (1) of 99985

Individuals and organizations always take the short term economic view unless forced to do otherwise. The reason is simple: They do not pay the full price for the decisions they are making. In the old days of cheap energy, why was it cheap? Simple. The companies that provided energy dug a hole and out it came. (I'm being a bit flippant) The amount they charged for their product was dependent on the exploration, production and distribution costs and a reasonable profit. While they cared about "reserves", the primary objective is to make the most money on net capital employed. Get more to the pump was the goal. During this time, many houses in the USA were not even insulated, even in relatively cold climates. Why? It wasn't cost effective for the individual or the construction company. Why would a contractor spend $1000 to insulate a house if no customer considered that differentiation important? Why would a customer pay for something that had a payback period of more than 20 years at the then current cost of energy? Neither of the "people" involved in the above considered the real cost of what they were doing: Utilizing a finite resource, a highly complex molecule with many uses for mankind and using it only for the energy that can be released from it's chemistry. The real cost is that future generations will have to develop technologies and use energy to produce synthetic versions of molecules we have destroyed in the past. The World Trade Center and Pentagon are examples of the same issue. The airlines and airports make security choices based on the perceived cost of not providing it. They are forced to do security by the FAA, but it is an additional cost to their business and the benefits are not apparent to THEIR BOTTOM LINE. The real cost of poor security only becomes apparent when there is a failure and that failure effects others more than the entity that made the decisions leading to the failure. And of course it gets worse. If any airline and airport decided unilaterally to absolutely cover the security issue, they would go out of business because consumers, not looking at the "big picture", wouldn't have been willing to pay the higher ticket prices required to support this "correct" decision and would fly with "just walk in" airline down the road. The "energy crisis" of 1973 galvanized the nation into a period of efficiency in energy use. The "Attack on America" of 2001 will galvanize the nation into a period of aggressive improvements in security. The cost was high.... Ira

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