Liquidity Trap and the Great Depression

Seeded on Fri Dec 5, 2008 7:00 AM EST (MarketWatch.com)

People used to boast about hot stocks they owned. Now they crow about how much of their money is in cash. Those holding cash have been richly rewarded with no losses and opportunities to buy assets (condos and equities) at huge discounts.

business

Latest Comments

Bernie Sanders Warns Republicans that Sarkozy’s Fate Will Soon Be Theirs
Tue May 8, 2012
- If the USA once again runs budget surpluses when the economy is strong, deficit spending can happen when the economy is weak.
Bernie Sanders Warns Republicans that Sarkozy’s Fate Will Soon Be Theirs
Tue May 8, 2012
- I think Senator Sanders has made a point; however, I am not sure it is the point he intended. The elections in both France and Greece have shown that given the choice between government austerity to balance the government budgets and running a deficit to fund programs, voters choose the latter.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- No, the point is that you do not understand the difference between revenue and profit, and that one cannot judge the success of GM's bailout with such a myopic, short-term view.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- GM's bankruptcy wiped out the debt, so the company can be profitable with a lot less in sales. If there is no debt service, that money can become profit.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- The sentence Scott, the Fortune 500 list came out today, guess what company came in at number five for a profit of 150.5 billion dollars this year, General Motors. is not true. GM did NOT make a profit of $150.5 billion. GM's profit was $7.6 billion for 2011.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- Yes, you are making my point. The Fortune 500 list measures how much a company sells (revenue), not how much it makes (profits). GM was #4 in 2008 while facing bankruptcy.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- BTW, GM was #4 in the 2008 Fortune 500 with revenues of $182.3 billion and a LOSS of $38.7 billion.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- Fortune 500 list is revenue-based, not profit. I am not disputing GM's position on the list, but the statement that GM's profit was in the top five as it most certainly was not. ExxonMobil once again made the largest profit. Here is what CNN wrote.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- I would say that GM is a long way from saved. Short-term profits should not be confused with long-term success, and the year-over-year comparison was not impressive.
Mitt Romney is a 'businessman' like the Hamburglar is a rancher
Mon May 7, 2012
- Yes, as the business owner gets to decide the path of the business. If he or she decides a better use of capital is to deploy it elsewhere, that is a valid decision. If someone does not like that decision, they can offer to buy it and keep those employees.

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Comments & Feedback

Thanks for the kind and thoughtful words.
— Scott-317099

Scott,

Really enjoyed your response to "Why Conservatives Vote..."

I consider myself a moderate, but more often than not, I find myself siding with conservatives. I agree 100% with your comments, and you framed them very nicely. Thanks for giving a voice to reasonable, practicle, and fair-minded people.
—