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Non-Tech : Kirk's Market Thoughts
COHR 195.88+6.5%3:59 PM EST

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To: GROUND ZERO™ who wrote (154)4/22/2013 11:46:31 AM
From: Kirk ©1 Recommendation  Read Replies (1) of 27037
 
More monkey business I see:
U.S. economy set to grow 3% - due to accounting change. The U.S. economy will become 3% larger in July as the government becomes one of the first to use a new international standard for GDP accounting. Among other things, statisticians will now take into account R&D investment, which will add just over 2%, and creative works, which will add another 0.5%. The government will backdate the alterations to 1929, so there are unlikely to be changes in trends or cycles.
I'm not sure I like this... what about when all the VC invested in fiber in 2000 and 90% of them crashed and they lost all their money? Or the internet bubble investment that crashed at the same time... or more recently the R&D put into Solar to get tax credits from the government and have IPOs to sell stocks that failed to the public....

What if everyone digs a hole in the ground and calls it "R&D" for a future shortcut "high speed rail" to China.... what happens when the investment fails to produce results? Do they subtract it from GDP?
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