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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: lurqer who wrote (16568)	4/7/2003 12:33:20 PM
From: Jim Willie CB	Respond to of 89467

obligations against debts extends to greater issues one must consider that overpriced assets (in particular stocks and real estate) place a huge burden on the economy from the obligations directed toward those assets and the misallocation of capital, by means of money demandable by investors and owners which go far beyond real value, which directs both stockholders and property owners to demand more from the next buyers than true worth, which result in very poor returns on capital investment this sounds semantic, but it is a deep point made by Richebacher in his latest essay if IBM stock is really worth $30 and it is selling for $81, WHO LOSES? HOW IS THE LOSS REALIZED? WHERE IS EFFECT OF LOSS? excellent deep questions who loses is the next buyer of the IBM shares, since he overpays, and probably uses debt to assist in the financing how loss is realized is the diversion of some money to old shholder, which could have instead gone to capital formation in capex or some other wealth generating entity, and let's not forget that debt assisted the financing effect of loss is to the economy, which is still caught in the fuching ratmaze, whereby assets are commanding too much money, people are forced to offer too much money, banks are forced to lend too much money, and not enough capital returns result from the sale and new investment, regardless of what it is... and let's not forget that debt levels rise to finance the higher cost just as a strong dollar gutted the entire US Economy of its mfg base, higher asset prices gut the entire spendable and investable remaining wealth of the next round of investors they just dont get the returns on their investment when they overpay and they increase their debt levels in the process new homeowners now must pay well over 25% of their income for housing, when for generations they paid less... try over 40% in Socialist Bankrupt California new stockholders now can expect a paltry 2% or less on income thru earnings generation sad, but we are caught up in a deadly game and the entire economy will be the loser JUST LIKE JAPAN / jim