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It seems we have started the Ball Bro Econ Forum, also pronounced "beef" or gu bak if you will.
Dr. Kool, I feel you not quite grasp what I was trying to teach you, namely that the world economy is not simply a static pot of gold. If someone makes a loss, it doesn't necessarily implies that someone else kios.
Lehman's losses and its declining stock price is related. However, the company's losses were not caused by the short-sellers. The short-sellers were simply profiting from their bet that Lehman's shares were going down (because they forecasted such losses). If the short-sellers had not done anything, Lehman would still have made the same losses on their financial investments.
If you wish you expand your knowledge Chieh, I recommend you read this http://www.amazon.com/New-Ideas-Dead-Economists-Introduction/dp/0452288444/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1221833590&sr=8-1 It's interesting with very little jargon.
Dr. Kool, I feel you not quite grasp what I was trying to teach you, namely that the world economy is not simply a static pot of gold. If someone makes a loss, it doesn't necessarily implies that someone else kios.
Lehman's losses and its declining stock price is related. However, the company's losses were not caused by the short-sellers. The short-sellers were simply profiting from their bet that Lehman's shares were going down (because they forecasted such losses). If the short-sellers had not done anything, Lehman would still have made the same losses on their financial investments.
If you wish you expand your knowledge Chieh, I recommend you read this http://www.amazon.com/New-Ideas-Dead-Economists-Introduction/dp/0452288444/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1221833590&sr=8-1 It's interesting with very little jargon.
posted by OOP @ 10:13 PM
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