I'm not sure I know what the fundamentals are. I think it would be useful to remember the words of Thorstein Veblen, words truer today than when he wrote them:
"The pecuniary magnate ... is superior to the market on which the capitalist-employer depends, and can make or mar its conjunctures of advantageous purchase and sale of goods; that is to say, he is is in a position to make or mare any peculiar advantage possessed by the given capitalist-employer who comes in his way." What the market does has great consequences at the level of material production. It was the stock market that allowed AOL to acquire Time-Warner. It was the stock market that drove Enron to its knees. It was the stock market that allowed Jeff Bezos, the owner of Amazon, to have a job (and put pressure on all other book sellers), despite losses quarter after quarter. It is on the stock market that private equity firms are making their plays. In all of this, what is defined as a bubble and what is defined as the fundamentals and about which do the owners actually care? Troy Jim Devine <[EMAIL PROTECTED]> wrote: On 3/2/07, troy cochrane wrote: > The valuations as determined by the machinations of the stock market are how > capitalists understand their own successes and failures. It is the realm > where owners pass judgment on all manner of social events and their expected > impact upon the earnings of capital. Recently the value of Toyota has been > soaring, while GM is famously in the doldrums. but serious owners of capital only look at _long term_ changes of each individual stock, relative to others. That's because they know (contrary to the academic theory of the efficient stock market) that stock price changes are notoriously flaky. They often don't reflect what the cappos care about, i.e., the fundamentals. > Activists/revolutionaries/leftists should try to understand > what is going on beneath these movements. J.M. Keynes had a good discussion of stock bubbles, i.e., when stock prices generally deviate from fundamentals. > One of the most important lessons we can learn is that the capitalist class > is far from homogeneous. I think I knew that already. -- Jim Devine / "The truth is more important than the facts." -- Frank Lloyd Wright --------------------------------- The best gets better. See why everyone is raving about the All-new Yahoo! Mail.
