04-04-2003, 12:20 AM
Hi,
Those companies that were of value remain, those that were not are quickly vanishing, leaving a void in the economy, but not devaluing more traditional stocks in any drastic way - they were not particularly overvalued to begin with.
If this were true, then the overall market would be down, but that part of the market based on "solid" stocks would not be. Now, the Dow Jones Industrials is one of the most quoted market metrics. It went from a high of over 11,000 down to a low of under 8,000 in the last couple of years, a loss of almost a third (an average loss of 12% per year over the past 3 years). The Dow Jones Industrials are some of the most "solid" stocks out there http://indexes.dowjones.com/jsp/index.jsp and follow the link to "components". I have heard a number of people say the same thing, which to me just proves that economists not only cannot predict the future, they don't even understand the past.
And the argument that the national debt gets smaller with time is predicated on a positive inflation rate and on the debt grown slower than that rate. Neither is a given, and if either fails, the debt can become an unbearable burden. Enough so as to destroy an economy (e.g., Brazil a few years ago). I think that the "it's better to let the debt go" arguments are based on an optimistically flawed model generated by people who *think* they are clever.
--Pete
Those companies that were of value remain, those that were not are quickly vanishing, leaving a void in the economy, but not devaluing more traditional stocks in any drastic way - they were not particularly overvalued to begin with.
If this were true, then the overall market would be down, but that part of the market based on "solid" stocks would not be. Now, the Dow Jones Industrials is one of the most quoted market metrics. It went from a high of over 11,000 down to a low of under 8,000 in the last couple of years, a loss of almost a third (an average loss of 12% per year over the past 3 years). The Dow Jones Industrials are some of the most "solid" stocks out there http://indexes.dowjones.com/jsp/index.jsp and follow the link to "components". I have heard a number of people say the same thing, which to me just proves that economists not only cannot predict the future, they don't even understand the past.
And the argument that the national debt gets smaller with time is predicated on a positive inflation rate and on the debt grown slower than that rate. Neither is a given, and if either fails, the debt can become an unbearable burden. Enough so as to destroy an economy (e.g., Brazil a few years ago). I think that the "it's better to let the debt go" arguments are based on an optimistically flawed model generated by people who *think* they are clever.
--Pete
How big was the aquarium in Noah's ark?