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To: greenspirit who wrote (9818)	1/24/2002 5:43:25 PM
From: jttmab	Respond to of 93284

In the bank, if joined by enough people, maybe a business received a loan they wouldn't have. In a mutual fund, if joined by enough people, maybe a company upgraded their plants and equipment in anticipation for the next upturn. That's certainly the theory..and it's a pretty good theory, unless you're in a recession. If a company is showing reduced revenue and then proceeds on new capital investement, thus reducing profits [or increasing losses], they get shot by the shareholders, the price of the stock goes down, and they lose their financial leverage, thus reducing their ability to invest. So they do like GM, they sit on a huge wad of cash, waiting for consumer demand to return...in the meantime they have layoffs and close plants and take one-time writeoffs....lowering their tax liability...increasing the bottom line and investors cheer [sort of]. jttmab

To: greenspirit who wrote (9818)	1/24/2002 5:47:53 PM
From: jttmab	Respond to of 93284

In the bank, if joined by enough people, maybe a business received a loan they wouldn't have. In a mutual fund, if joined by enough people, maybe a company upgraded their plants and equipment in anticipation for the next upturn. Addendum to the previous response...On the other hand if you were talking about a sector in the economy that was depressed rather than a global recession the theory above works just fine, because there are healthy sectors that can take in/utilize the investment. At the moment, housing is doing well, but that's not enough to absorb the idle investment potential. jttmab