Future of iTulip?

[lektrode]

Re: the casino economy

[Polish_Silver]

where's the competition

I think the lack of competition is limited to certain sectors.

Within the US, I would put medicine right at the top.

Consumer electronics: lots of competition, very low margins

Integrated circuits: reasonable margins, continuous innovation

[Chris Coles]

Re: where's the competition

Just over a decade ago Verizon enjoyed a quarterly income from their land line customers alone of ~$14 billion, (without any reference to their wireless income, which I had been told to my face by the owner of a very small wireless license owner from the midwest; his was a money machine), making their current borrowing of $120 Billion very small beer.

[Polish_Silver]

What it means

I've been on this one for a little while. It's all a lot of gambling on consolidation and buy-outs. . . .

You have any idea how much Verizon's in the hole? They owe $120 Billion. . .

And that's not even counting the corporate junk bonds. That'll be like the Bay of Fundy.
. . .

If you are right on this the stock market is in a BIG bubble. EJ has also written that the "extra cash" is largely
fictitious.
One reason was that corporations wanted liquidity on hand to guard against another 2008, and they
were willing to acquire long term debt to have a cache on hand. That part makes sense.

But what if corporations are just as impulsive as people? Big pile of cash sitting there, why not use it?

Hence the over priced stock purchases, etc. So the original purpose of the cash--to guard against a crisis, becomes
lost as the cash is used to create more leverage and complexity.

PS

[Chris Coles]

Re: What it means

If you are right on this the stock market is in a BIG bubble. EJ has also written that the "extra cash" is largely
fictitious.
One reason was that corporations wanted liquidity on hand to guard against another 2008, and they
were willing to acquire long term debt to have a cache on hand. That part makes sense.

But what if corporations are just as impulsive as people? Big pile of cash sitting there, why not use it?

Hence the over priced stock purchases, etc. So the original purpose of the cash--to guard against a crisis, becomes
lost as the cash is used to create more leverage and complexity.

PS

May I suggest that everyone reads this speech made by Andrew Haldane Chief Economist at the Bank of England at the University of Edinburgh Corporate Finance Conference http://www.bankofengland.co.uk/publi.../2015/833.aspx

http://www.bankofengland.co.uk/publi.../speech833.pdf

PS to EJ; You will love Chart 8 on page 28.

[Polish_Silver]

Re: where's the competition

That's a good article by Haldane. Wish I had time to read it.