On Aug 18, 2007, at 12:14 PM, B. wrote:
> Okay, so what are "the fundamentals," and when or why
> would they not be "sound"? Any examples of when the
> fundamentals weren't sound? What are they -- the
> fundamentals, that is?"
Fundamentals = what Wall Street calls the "real sector" (as opposed to their own, unreal sector): employment, income, production, etc. Weirdly, when they say this they act as if their business has no connection to the real world. But it does - if there's no credit, the economy grinds to a halt. And by that I don't mean speculative credit - I mean what allows businesses to finance supplies and inventory, and households to buy houses and cars. If a financial collapse leads to a crisis of confidence, business does not invest and hire.
This could be a mostly financial crisis with no real world impact. Or it could lead to the kind of generalized crunch I just described. We don't know yet.
Doug