File spoon-archives/marxism-international.archive/marxism-international_1997/marxism-international.9711, message 37


Date: Sun, 2 Nov 1997 10:49:22 -0500
From: Doug Henwood <dhenwood-AT-panix.com>
Subject: Re: M-I: Re: Stock Market Rollercoaster


James Heartfield wrote:

>I don't see it like that. The steady rise in share prices is an example
>of what conventional economists call a over-valuation, just as the
>current collapse is called, somewhat apologetically, a 'correction', ie
>bringing share prices into line with their real values. The fact that
>such market disturbances can wipe out such vast quantities of capital,
>only indicates that much of this is not real but fictitious capital.

One reason that the stock market has been doing so well is that corporate
profits have been running ahead of capital expenditures, leaving a great
deal of "free cash flow" for Wall Street and the City. For more, see the
Juicy Cash Flow supplement on my web site, one click away from the home
page, whose URL is below.

I'm going out of town for a week, and will be signing off for a week. Don't
resolve the second contradiction without me!


Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217 USA
+1-212-874-4020 voice  +1-212-874-3137 fax
email: <mailto:dhenwood-AT-panix.com>
web: <http://www.panix.com/~dhenwood/LBO_home.html>




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