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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (30209)	6/15/2009 9:32:13 PM
From: axial	Respond to of 46821

It could have been written better, Frank. The difficulty lay in not conflating the financial crisis with the economic crisis, while it's clear that in this case, systemic risks from finance and economics were triggered. Some of the risks were latent, background as opposed to foreground. For instance, debt accumulation was and is a risk in itself, but the recent rise in economic impairment (an outcome of the present crisis) has taken the risk to a new plane of concern. From a link posted by Peter, last year: Message 24993353 "As of this year, the final results of this American experiment in financial decision making are in. The allocation of this capacity exclusively to capital markets, rather than sharing that decision making with hundreds of millions of Americans, has produced a horrible result. Instead of investing the accumulated wealth of America in productive assets that yielded long term benefits, the money was invested in derivatives (illusory financial products) that yielded nothing of tangible value. In short, the narrow group of actors that operate within the capital markets made the decision to forgo the long and difficult process of growing investments in the tangible world in favor of the outsized returns available through investments in virtual products. That investment is now evaporating." --- As noted in my post, we're actually seeing capital deployed in destructive (as opposed to non-productive) ways, where capital without an interest in enterprises is actually betting on their demise, actively working to prevent their rehabilitation or emergence from protection, and profiting from the outcome. We've been discussing the impact of these financial "innovations" for years: Message 20899236 We now see the Enron mentality taken to its logical extreme, where capital markets actually prey on productive enterprises, as opposed to fostering their growth. This phenomenon occurs at the border of finance and economics; if the prevalence and growth of these practices doesn't constitute systemic economic risk, nothing does. Jim