UnThreaded | Threaded | Whole Thread (17) | Ignore Thread Prev | Next
Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75777  
Subject: Re: Crystal Ball (the future?) Date: 4/20/1998 2:45 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<< <Money going into the stock market is not the same as money going into a
mattress. It's used to produce things.>Nice in theory, but only the
money going to purchase IPO's does this. The rest is just shuffled
around between investors and making a little money for the brokers. None
of it gets back to the companies that produce things. >>

This isn't correct. This is only true is you only pay attention to direct consequences and ignore indirect actions and reactions. If nothing else, a secondary market is necessary for the primary market (IPO's) to exist. If those who invest in an IPO were stuck in that investment, few would do so. The existance of the secondary market enables the IPO market to exist. The secondary market is therefore the sine-qua-non of the direct investments to companies. I don't think you would claim that indirect investments are any less "real" than direct investments, would you?

I keep hearing this argument on Usenet. This is the equivalent as saying that the freedom of the press is important to authors, or freedom of speech is only important to public speakers.

<<Most of it is used for one company to take over another, and this does
not, in itself, create new productive capacity. It may permit layoffs of
redundant people and increase one measure of productivity.
Unfortunately, these layed off people cannot create effective demand for
products or services, so that on a global or even national basis, this
is not a real productivity increase.>>

Yah. This is what Europeans (esp. France) thinks. They wonder why they, with all their "worker protection" plans have such poor economies, while the US, with full freedom to layoff, downsize, etc. has a booming economy.

Dallas Federal Reserve Bank, economist (economic historian) W. Michael Cox:
Our economy, he points out, has added 35 million jobs since 1982, a
growth rate almost four times the job growth in Europe. In the last six
and a half years alone, our economy has added 15 million new jobs."And
that's net new jobs," he says. "It's been estimated that 25 million jobs
were destroyed during that period so we really created 40 million new
jobs." 3/29/98

Sorry to go on so long.
Ray

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (17) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

Clorox Isn't Cleaning Up
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement