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  1. #21
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by ptgatsby View Post
    This is entirely too painful...
    Cash is faaaaaar more transferable than any stock. I don't even know why we're having this discussion.

    That's the point of an economic contraction - less goods for everyone.
    This is wrong. This correction is an adjustment in the monetary value of goods. An economic correction does not arbitrarily imply that there will be fewer goods available. There may be fewer produced in future, but what happened on the stock market yesterday did not destroy existing inventories. No warehouses burnt down.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  2. #22
    Guerilla Urbanist Brendan's Avatar
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    Quote Originally Posted by Lateralus View Post
    Cash is faaaaaar more transferable than any stock. I don't even know why we're having this discussion.
    Yeah. That's what we're asking. What cash is transferring where?
    There is no such thing as separation from God.

  3. #23
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Brendan View Post
    Yeah. That's what we're asking. What cash is transferring where?
    These people didn't have cash. They had something they thought they could trade for cash. They didn't spend physical cash on their stock, anyway. It was all just an electronic entry in a computer.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  4. #24
    Guerilla Urbanist Brendan's Avatar
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    Quote Originally Posted by Lateralus View Post
    These people didn't have cash. They had something they thought they could trade for cash. They didn't spend physical cash on their stock, anyway. It was all just an electronic entry in a computer.
    They were properties that depreciated in value, but you give the impression that the money floated to other sections of the economy. Have I misinterpreted you?
    There is no such thing as separation from God.

  5. #25
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Brendan View Post
    They were properties that depreciated in value, but you give the impression that the money floated to other sectors of the economy. Have I misinterpreted you?
    Are you talking about real estate or stocks?
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  6. #26
    Guerilla Urbanist Brendan's Avatar
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    Quote Originally Posted by Lateralus View Post
    Are you talking about real estate or stocks?
    Both.
    There is no such thing as separation from God.

  7. #27
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by Lateralus View Post
    This is wrong. This correction is an adjustment in the monetary value of goods. An economic correction does not arbitrarily imply that there will be fewer goods available. There may be fewer produced in future, but what happened on the stock market yesterday did not destroy existing inventories. No warehouses burnt down.
    That's like saying that I took an axe to my chicken, but shrug and say that the number of eggs hasn't decreased, so the only thing that changed was that my chicken lost value.

    You are only as accurate as the value of the chicken has remained the same: The eggs are not relevant. In this case, the value of the chicken has decreased because it can't hatch as many eggs... ok, that analogy has gone too far. It's more like you have thousands of chickens and plan on having millions of eggs, except now you can't raise enough money to buy the food for the chickens, and everyone knows it, and so they know you won't be able to produce as many eggs and will have to let your chickens die. All of a sudden, your chicken and egg farm isn't worth as much. The net result is that there are less eggs for everyone. But of course, everything is roughly the same, still, in terms of wealth.

    The market, however, measures future value because that's what matters. Funny enough, that story isn't all that far off from explaining why the bank failures could be devestating. And it has a correlation - companies are shutting down capital projects.

  8. #28

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    ^Yes. The way I saw it too. There is less production capital now, so there will be less production in the future, unless the market capital is restored (which it still a possibility).

    Also, even if securities aren't liquidated, they do have a value. Those holding those securities are exposed to the risk of loss of value of those securities.

    I switched to what I thought was "cash" a little while ago. But now the money market fund I used is frozen "till market liquidity returns." This "cash" doesn't seem all that secure either. I can't use that money for other investments, and Michelin had to take out a loan to continue operations because they couldn't use their "cash."

    Accept the past. Live for the present. Look forward to the future.
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    "As our island of knowledge grows, so does the shore of our ignorance." John Wheeler
    "[A] scientist looking at nonscientific problems is just as dumb as the next guy." Richard Feynman
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  9. #29
    Senior Member LostInNerSpace's Avatar
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    For starters, all is not lost. We will very likely see a rip roaring bull move starting around mid-october. The time of year is right, the seaonaility is right and the Fed is furiously pumping liquidity into the system. We are witnessing the formation of a perfect storm. That is not to say we will see the start of a new bull market. We could see a bull move that carries us through the end of the year, just fails to takeout highs, and turn south for the (economic) winter. It depends in large part on the sucess of the "bailout", and how well the economy holds up.

    Stockmarket "wealth" is not "real wealth" in the economic sense because you can't go out and buy a bag of potatoes or anything else with a stock certificate. You have paper profits or losses until you cash out. But might be able to buy part of another company if you have a lot of stock.

  10. #30
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by LostInNerSpace View Post
    Stockmarket "wealth" is not "real wealth" in the economic sense because you can't go out and buy a bag of potatoes or anything else with a stock certificate. You have paper profits or losses until you cash out. But might be able to buy part of another company if you have a lot of stock.
    Hmm, and carrots aren't real wealth because you can't buy potatoes with it...? (Replace at will).

    Cash is every bit as real, or fake, as stock. If anything, stock has more tangible value than money. Where money is simply an agreed upon method of paying (the only real value fiat money has is to pay your taxes, and what the law gives you), the stock entitles you to actual assets (last in line, but still) held in 'trust'.

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