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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (50628)	8/15/2001 9:23:49 PM
From: BWAC	Read Replies (2) \| Respond to of 70976

Michael, "...asset appreciation in the markets to get economy moving again." You got it. The economy will not get going good again until Investment in the economy starts to pay off. (360 degree statement) Right now Investment in the economy is a black hole. Capital is not available and borrowing power has been destroyed. Low interest rates mean nothing if you can't get access to capital. The banks ARE NOT loaning to small businesses. Formative stage public companies in need of capital are dropping like flies. Consumers lost a lot of capital assets that could have been borrowed against or sold with proceeds pumped into the economy. Corporate buyers are in a full blown panic spending freeze. Compound that with speculation ruling the market to the downside. Note the month over months this year of ever increasing short interest. This isn't investing in the economy, it is speculating against the economy. Speculating against the US economy in particular and its ability to turn around. In effect and in this magnitude actually damaging the economy. Imagine trying to sell your house if somebody had borrowed title to your house and was competing against you as a seller day after day? We won't see the economy turn until this sort of speculation is stabbed through the heart. Lowering interest rates won't in itself do it. Increasing the money supply won't do it until that supply is actually released to the investors (small businesses, expanding companies, etc.) in the economy and those investments flowing through to the benefit of the employees, and suppliers employees, etc. The turning point will be when the Powers That Be get together and take a stand against the rampant downside speculation. Rewarding actual Investment in the economy. Beats me when that day will occur. It always has in the past, but we are now long ago past what I considered the critical point. A big huge problem is that the actual driver of the economy has both legs broken. Banks weren't driving the economy. General Construction wasn't. Consumer durables weren't. House construction wasn't. Manufacturing wasn't. Consumer spending wasn't. I'm not sure Greenspan and Co understood this. Technology in general was driving the econony. The internet, the companies building the internet, companies using the internet to bring new services to the consumer, companies using the internet to bring new cost savings to the consumers, companies using technology to increase productivity and profits, with the investment in all this driving the market and allowing consumers and businesses to profit from it. Those profits and savings were funneled back into new home construction, capital spending, financial services, savings, consumer buying power, etc. All of which kept the economy healthy and moving forward. In balance per say, with the exception of some items that are not in a free competitive market like oil and such. Greenspan killed the driver of the economy. Until that driver returns or is restored the economy and investors in general will suffer. If the Speculators don't ease up or aren't stopped, then those 10% with great wealth are going to have a hard time supporting the ever increasing population on government subsidies. As for inflation outside of energy. It won't happen because the informed consumer has too many competing choices. Unless all the competition is destroyed by Greenspan first. (btw None of this rant is in any way supporting some of the valuations that existed. They would have corrected in their own time without an attack by Greenspan on the economy as a whole.)