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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (82715)	8/7/2000 9:17:03 AM
From: Craig Richards	Respond to of 132070

The only thing that the corporation can distribute cost free is its own stock. That statement is based on a set of accounting standards. It would be possible to create a set of accounting standards in which there was a cost to the company to print up shares of its own stock. So your "cost free" statement only applies to one way of viewing the world (even though it is the "standard" way). Accounting is a profession that tries to keep track of financial assets and income for a company. The current standards and rules seem to work, but they have their weak areas where they do not adequately reflect what is really going on. Perhaps the accounting for printing up shares of stock is one of the weak areas in the current accounting standards.

To: Don Lloyd who wrote (82715)	8/7/2000 11:07:19 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 132070

Don, if i may chime in on the point of view debate re. stock options issuance: the only PoV that counts is that of the shareholders. and in practice, the stock option schemes hurt many corporations as well, as they are trying to offset the dilution by buying back shares and in the process are impairing their balance sheets...see IBM for a good practical example of this. on the issue of unlimited paper issuance, over the next ten weeks, 4,8 billion shares are coming out of expiring lock-ups, not to mention the flood of IPO's that's in the process of hitting the market. Al better get that printing press in gear again (exactly what he's planning to do anyway, if i understood his elaborate obfuscations correctly) , otherwise the market will be overwhelmed by the flood of paper. i have a feeling that in the period running up to the election we will get to see the explosion in credit that has accompanied the asset bubble over the past five years reach yet another level of excess...initially i thought upon consideration of the Q2 GDP report details that consumer credit growth may have hit a limit, but the latest cc data put the lie to that supposition. in the meantime selected regions have seen the real estate bubble go parabolic, a tried and trusted way to lure the banking sector into granting ever more questionable loans. i'm taking bets on when the next huge tax payer bail-out will be due to 'protect the integrity of the financial system' , i.e. to bail out assorted speculators.... since i'm already digressing, how about this old saying by Ludwig von Mises: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansions, or later as a final and total catastrophe of the currency system involved.” since the Greenspan Fed refuses to go the route of voluntary abandonment, the big paper pyramid is cruising toward the other option it seems... in the meantime, buy the dip...-g- stls.frb.org stls.frb.org stls.frb.org