>
> Of course *future* profits are anticipated from *future* transactions.
> That's the whole point. But not necessarily the "immediate" future
> in the extended sense of next year nor even the year after. If
> long-run profitability is the decisive criterion for the valuation of a firm,
> as both Marx and Market believe, then, as I said, Lev is perfectly correct
> and the GAAS are asinine.
>
> Shane
Why are GAAS asinine? What is wrong with valuing a firm by its discounted expected cash flow over the next five, ten, twenty years, measuring each years' cash flow according to GAAS?
Lev doesn't differentiate between immediate and future transactions. He just says that they are no longer important, period, and, what is even more imbecilic, that they "describe a constantly shrinking share" of the economy. Say what? What part of GDP, exactly, is not measured by transactions? His examples are nonsensical. In order to develop a drug, salaries have to be paid for years, labs built, equipment purchased, all of which is done through transactions. A drug passing a clinical test, or software passing a beta test, this does not "create" transactionless financial value out of thin air, it just means that all of the previous transactions will not go up in smoke.
Lev's argument really makes no sense to me.
-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique