Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (61916)	10/24/2008 5:56:54 PM
From: Valuepro	Read Replies (3) \| Respond to of 78409

I appreciate your opinion, and fully agree in so far as "wealth" is concerned. Certainly with stock market declines, wealth has been destroyed. No argument there. I was talking about dollars, not wealth. There is a difference. In that regard, the markets can not extinguished more dollars than go into them. Example: If I sell a 1 dollar stock for 10 dollars, I have ten dollars. If that buyer at 10 dollars holds as the prices goes to zero, I still have the 10 dollars that that trade represented. In the meantime, the company is busted. If you extend the same concept across the market, you can see that all the original dollars invested remain someplace, either in sellers hands, or in some combination with the remaining value of the equities. As far as most instances of debt are concerned, again they are paper dreams created quite often out of thin air. In those cases, the most of these dollars were never "real" in the first place. Look at the effect of fractional reserve banking, for instance. Note that 100 real/fiat dollars invested can pyramid into something like 500 dollars in banking assets - i.e., wealth (100 dollars + 400 dollars in loans), yet only the first 100 dollar deposit exists to support the total indicated wealth of 500 dollars. The paper wealth can be destroyed, but that first hundred dollars remains in existence. So, the failure to repay debt may destroy wealth, but the "real" dollars behind it remain someplace with someone somewhere. Again, dollars can't be destroyed, only the added paper wealth they may at times represent.

To: benwood who wrote (61916)	10/25/2008 4:42:18 PM
From: marcos	Respond to of 78409

You're both right on some points here, it's just that in accounting terms VP is talking profit and loss statement, maybe also cash flow statement, while you benwood are talking balance sheet ... ?? ... not sure, but who better to judge this stuff but a logger, lol Trades of a very small fraction of an asset class will raise/lower the supposed value of all, while comparatively little cash money has changed hands ... especially if you mark stuff to market with each trade within that class, as with stocks, and apparently banks and funds etc had to do that with dodgy debt paper for which there was little or no market for a while, but not all of which will turn out worthless in the end, as most all mortgages in most tranches will get partially paid, and many paid off completely ... it's just that in the meantime some of it forced derivative liquidation, then yee-haw the shit hits the fan Our area here is rural but fairly settled, lots of people who've been here for generations, far less property turnover than elsewhere ... in 2004-07 only four or five sales out of a few hundred properties were enough to more than double everybody's market value and tax assessment, yet the amount of actual money involved was tiny in proportion, where it came from and where it went most people here don't know and don't care, only effect on them is taxes went up faster than when property was cheaper Or take the example of a junior with 60m shs out, trading bid/ask 1.10/1.25, a board lot goes off at the bid than another at the ask, the market cap has just moved by nine millions but not much over a hundred bucks was involved, and it could easily have been the same hundred bucks if one player was making market in the stock