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Transfer yes but not necessarily this polarizing transfer of wealth.
Obviously there had to be a few transactions at the highs or else
there wouldn't be any market price. Not too many people could afford
Japanese real estate at its peak. I can assure you not too many were
selling because captial gains tax rates are prohibitive. It kinda
went up and down in a vacuum. Sure, the bank's were willing to lend
plenty based on the land's perceived appraisal value and that money
went into stocks, golf course memberships and home improvements.
I have no idea where Bernie got his shares but I get the feeling he
bought it at a discount from Worldcom and borrowed heavily to buy it.
In the case of Nasdaq stocks obviously there was plenty of volume at
the highs so certainly many cashed out with riches. But all I'm
saying here its theoretically possible that an asset can fly way up
and crash down and everyone can be poorer except for the issuing
company and the fed gov't throught taxation. I remember in the UK,
there was a well publicized IPO aptly named Lastminute.com (I think)
that went public in mid-March 2000 exactly at the peak. I don't
think the stock ever saw the light of day. The only one who
benefitted was the issuing company and I'm sure they've burned
through the cash and shut their doors by now.
--- In realtraders@xxxx, "Ray Raffurty" <r.raffurty@xxxx> wrote:
> If everyone bought a stock at 100 someone had to sell it at 100.00,
the fact that no one else is foolish enough to buy it is not relevant
to the transfer of wealth. If someone had a $300 M margin call it is
because he purchased $300 M worth of stock from someone, he just did
it with borrowed money. The Japanese purchased their real-estate
from someone.
>
> There is ALWAYS a transfer of wealth in every transaction (even
theft).
>
> Good luck and good trading,
>
> Ray Raffurty
>
>
> ----- Original Message -----
> From: bondo92677
> To: realtraders@xxxx
> Sent: Thursday, August 01, 2002 12:16 PM
> Subject: Re: [RT] bear market stats
>
>
> Yup, just ask Bernie Ebbers. $300million margin call wasn't it?
The
> Japanese had limitless real estate wealth in the late 80s but
could
> not sell because of high tax rates. They leveraged their assumed
> wealth until all the dominoes fell.
> Wealth does evaporate without transfer. A stock does not have to
> change hands to go lower. No bids = lower price. Everyone owns
it
> at $100. Next morning its at $10. The only winners are the corp
> issuer which in the case of tech burned up the cash pursuing
> profitless dreams and the fed gov't which taxes you on your
worthless
> unexercised stock options.
>
>
>
> --- In realtraders@xxxx, "Ray Raffurty" <r.raffurty@xxxx> wrote:
> > Wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong,
> wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong, wrong,
wrong,
> wrong, wrong, wrong, wrong, wrong, wrong. If you believe this,
STOP
> INVESTING/TRADING NOW. You are in great danger.
> >
> > You are only "wealthy" on paper. You have NO wealth until you
take
> profits. A bank will gladly loan you money on 50% of your paper
> wealth, then sell 100% of the position (or whatever % is required
to
> make THEM nor you whole if the stock drops below 40%) at any cost
to
> you.
> >
> > Good luck (you'll need it) and good trading.
> >
> > Ray Raffurty
> >
> >
> > ----- Original Message -----
> > From: Steve Walker
> > To: realtraders@xxxx
> > Sent: Thursday, August 01, 2002 11:34 AM
> > Subject: Re: [RT] bear market stats
> >
> >
> > Wealth does disappear to the extent the market moves higher
after
> the
> > purchase and then retreats.
> >
> > >>> r.raffurty@xxxx 08/01/02 10:30AM >>>
> > Recently the Democrats have been harping on the 7.7 trillion
loss
> in
> > market cap. This shows a total lack of understanding on how
> markets
> > work.
> >
> > If a person is stupid enough to by stock in Dr. Coop.com
(fill in
> your
> > favorite dead stock) at $80 they deserve to drive a Dodge
Omni
> with
> > 100,000 miles (they probably paid 2995.00 for that too).
> >
> > The point is that the 7.7 trillion dollars did not disappear,
it
> just
> > changed hands. The uninformed and greedy sucker ALWAYS gets
> clipped.
> > CNBC just ran a report about a couple that lost 75% of their
> account in
> > JDSU. Their kid wants to go to Duke University, so they are
> moving,
> > riding the subway, etc. He was man enough to admit it was
his
> fault,
> > but fell short of admitting it was GREED, pure and simple,
that
> made him
> > buy an over priced stock and IGNORANCE that prevented him from
> > protecting his position with options or even stops. The
person
> (s) who
> > sold him JDSU at the top are driving the Porsche because they
> recognized
> > that the market could not go parabolic for long.
> >
> > If there is a case of fraud, a stock holder would have a
> legitimate
> > complaint and new laws may address some of this by returning
ill
> gotten
> > grains to investors (if the feds can find the assets).
However
> in most
> > cases this is not applicable. The vast majority of losses
are
> caused by
> > GREED coupled with IGNORANCE. Now the great masses are
crying to
> their
> > congress man "They never told me I could lose".
> >
> > Good luck and good trading,
> >
> > Ray Raffurty
> >
> > ----- Original Message -----
> > From: SLAWEKP@xxxx
> > To: REALTRADERS@xxxx
> > Sent: Thursday, August 01, 2002 6:03 AM
> > Subject: [RT] bear market stats
> >
> >
> >
> >
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> >
> >
> >
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