SB, The problem is, you get a lopsided economy when the financials inflate and the real assets decline. You don't keep making money hand over fist unless people who are in jobs making real stuff can afford to fund their 401Ks and buy homes. So far, the financial sector has picked up the slack in other areas, including technology, but this is a short term solution. The financial bubble requires ever larger inflows of hot air to stay afloat, and I have seen cracks in that scenario for years. A minor but irritating crack is the buying back of stock funded by the issuance of debt. How long will folks be willing to accept crappy interest rates on the debt of companies whose credit ratings are sucking wind? If the cos. can no longer fund this scam with cheap credit, that support for bubble stock prices goes away. True, some like Coke and, well, Coke, may have a defensive product with enough cash flow to continue purchases. But many, such as IBM, are mortgaging their future to "make" the next quarter, and lately they haven't even "made" the quarter, IMHO. True, they've made the quarter in the opinion of the marketplace, but it requires a lot of myopia to see their situation in a positive light.
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