Non-Financial Companies have $1.8~ Tril, but aren't hiring

[Jalinth]

Did the assets 'decrease in value' or did people simply stop believing in a bunch of illusory value that the assets never had, to start with?

An asset is only worth what someone else is willing to pay. During a bubble, people were paying very high prices and once it burst, the opposite happened. For some of the "financial wizardry" assets, the value does have a big amount of illusion. If you borrowed to buy those assets, you are doubly screwed. This is my view of Vancouver - badly overpriced right now but if enough people start refusing to buy (or banks refuse to lend the money), then prices will go down.

But even the value of money is illusory - if enough people start disbelieving in the US dollar, then its value will drop.

[ShadowOfMadness]

So... where did the money go, then? Did it just vanish into the ether?

Basically, they owe $300 and have $50. They have to spend $X a quarter to stay in operation and $X to make the minimum payments on their loans. On top of that, no one is willing to loan them money...so they are holding on to their liquid capital and praying they at least break even every quarter. Or they are screwed.

[Kanastrous]

But even the value of money is illusory - if enough people start disbelieving in the US dollar, then its value will drop.

I remember having a bad satori moment when I was probably about ten or twelve - the only reason the green pieces of paper are worth anything, is that everybody chooses to maintain an *agreement* that they are worth anything...

[Knife]

I very much remember the Dot Com bubble, where a shit load of companies who had shit tons of capital from people buying stocks and what not, folded because... well they didn't really make anything. If they did produce a product, they weren't selling anything. All incoming money was investment money, no actual merchandise was being made or sold.

Even if SadowOfMadness is correct, I think the companies are still wrong. Take your $50 and fucking produce something, sell it, make some actual money without investment capital or instead of it. This smoke and mirrors game with investment capital and no actual production is what got us here in the first place.

[Kanastrous]

+1

I made the mistake of agreeing to work for one of those dot.com swindle-fests. Wound up collecting documents and presenting them to the FTC, SEC, and CA Dept. of Corporations. Had to square it somehow.

[hunter5]

I very much remember the Dot Com bubble, where a shit load of companies who had shit tons of capital from people buying stocks and what not, folded because... well they didn't really make anything. If they did produce a product, they weren't selling anything. All incoming money was investment money, no actual merchandise was being made or sold.

Even if SadowOfMadness is correct, I think the companies are still wrong. Take your $50 and fucking produce something, sell it, make some actual money without investment capital or instead of it. This smoke and mirrors game with investment capital and no actual production is what got us here in the first place.

The problem is with all these new government regulations coming out from Obamacare and the new financial reform bill companies don't have a clue how that will affect their business yet. So before they start producing and growing they have to study to even be sure it is worth the effort to get bigger.

[Knife]

The problem is with all these new government regulations coming out from Obamacare and the new financial reform bill companies don't have a clue how that will affect their business yet. So before they start producing and growing they have to study to even be sure it is worth the effort to get bigger.

lol, the times we live in. Companies have to study to be sure that producing a product is worth the effort. lol. If that is what new regulation means, then I'm all for it.

[Kanastrous]

Not decide whether producing the product is worth it; whether any degree of growth is worth it. Although my amateur understanding has always been that businesses usually perceive 'growth' as a desirable thing.

[Knife]

Not decide whether producing the product is worth it; whether any degree of growth is worth it. Although my amateur understanding has always been that businesses usually perceive 'growth' as a desirable thing.

Fair enough.