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.

Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (7539)	10/3/1998 3:23:00 PM
From: John Dally	Respond to of 86076

Hi CB, The loss in wealth is real since if people want to convert their investments into cash, say for consumption, they now have less buying power. "Paper gains and losses" matter if/when you need the money. Now, I agree that since investments fluctuate in value, it doesn't make sense to worry about day-to-day changes. What you need to realize, however, is that you've stumbled upon a cyber-gang of misanthropes -g- who feel that we're in for some "tough love fer de bulls[TM]," to quote the eminent, Austrian-trained, cyber-twins Mike & Will. (N.B. "tough love fer de bulls[TM]" is a very precise Wall Street term for "the world goes to hell."-g-) As far as the economic reasons behind such a drop, a lot has been already written. Here's a "lucent" -g- post discussing the aftermath of over-investing in production capacity: #reply-2664295 Another straight-forward macroeconomic argument for lower stock prices is that companies are currently unable to raise the prices of their products, yet wages are rising 3-4%/yr. Therefore profit margins, earnings, P/E ratios, and stock prices will decline. Best regards, John.

To: Ilaine who wrote (7539)	10/3/1998 11:25:00 PM
From: Moominoid	Read Replies (1) \| Respond to of 86076

True wealth isn't destroyed in the crash. Rights to future spending are drastically curtailed. Then maybe companies, banks etc. go bust because those rights are no longer there. That is when real wealth=productive capacity is destroyed. That's my economics take on it. David

To: Ilaine who wrote (7539)	10/4/1998 12:04:00 PM
From: Joseph G.	Read Replies (1) \| Respond to of 86076

<<TOKYO, Oct 4 (Reuters) - Tokyo shares are likely to remain under pressure after a weekend meeting of the Group of Seven industrialised nations failed to produce fresh incentives that would boost the beleaguered market, traders said on Sunday. ............ Last week was a grim one for the market, with the benchmark Nikkei average down 500.15 points, or 3.6 percent, at 13,223.69. On Friday, the index slid below the 13,000 level for the first time since January 1986 amid intensifying worries of a global equity slide. ''Tokyo shares are looking for the bottom this week amid growing fears of a financial crisis, with no bottom in sight yet,'' said Higashida. Corporate earnings both here and abroad will catch traders' attention, and with the global economy perhaps on the brink of a slump, many think the earnings announcements will disappoint. That could help push down blue-chip Japanese shares such as Sony Corp and Toyota Motor Corp . ''Blue chips and export-related firms are also likely to be sold due to signs that the U.S. economy is slowing,'' said Koichi Kurata, portfolio manager at Asahi Mutual Life Insurance Co. Many fret that Japan may experience another wave of year-end bankruptcies caused by a credit crunch as banks reduce lending to prop up their capital-adequacy ratios. ''There are few sectors for investors to be able to buy at this stage except for selected defensive stocks such as pharmaceuticals,'' Kurata said. Uncertainty over how much money Japan will commit to help its shaky banks will undermine confidence in the market. The lower house of Japan's parliament on Friday passed a set of financial-stabilisation bills designed to wind up failed banks and temporarily nationalise those that fail or request nationalisation. But still unresolved are measures to handle weak banks before they fail. The bills still need to be approved by the upper house before they become law. The upper house's plenary session is to take up the bills on Monday. Other factors in the market: The meeting of G22 finance ministers and central bank governors in Washington on Monday. The release of the government's revised GDP forecast for fiscal 1998/99.>>