pbrower2a
Atlas Star
Posts: 26,839
|
 |
« on: March 20, 2020, 04:32:09 AM » |
|
CORVID-19 is the pretext. We have other factors, and something else could have caused a crash.
Realities of early February:
1. Insane price-earnings ratio.
2. Inadequate savings to keep stock prices rising (there were going to be no more new buyers if the market started down).
3. Inverted yield curve -- short-term loans more expensive than long-term loans. (Installment credit, short-term loans for plant and equipment, and cash to keep shaky entities alive get unduly expensive and make collapses possible)
4. Inadequate investment in plant and equipment that is the source of new jobs in manufacturing (but it is largely personal savings that banks lend for this purpose).
5. Corrupt, incompetent political leadership
6. Stale bull market that fosters bad business habits.
Don't be surprised to find some accounting scandals blowing up.
|
