Charlie – With the numbers you’ve been given, and your technically accurate accounting :^), I concur that your conclusions merit consideration. To re-articulate, I suppose my real issue is that I personally don’t completely trust the numbers we are all being given, and therefore am nervous about the conclusions. And you are correct, that’s not an accounting process issue.
Looking at Enron’s ‘numbers’, you can see how it’s not a completely unfounded angst.
My concern is that the comfort this particular perspective might inspire could lead to unwarranted complacency. As an analogy, it feels to me like we’re buying big pleasure-boats using the apparent equity in our homes, in a very uncertain housing market. More important than *my* risk, is when our banks *multiply* this exposure across their base, there’s the obvious fallout that may occur.
For What it’s Worth, it’s not an inherent aversion to borrowing – I’d feel much better about the loans if we were using them to buy new ‘printing presses’ and investing in growing our productivity.
I hope that’s more clear.
Jim – If accurate, your numbers lend a comforting perspective. That said, after owning stock in Lucent, Hayes and DEC, and watching Enron and WorldCom… Clearly, the value of any entity is largely based on its management vs its capital value/earnings.
Right now, I wouldn’t make that 4 trillion loan :^), both because of the current management, as well as momentum of the Democratic candidates (future management).
Whether or not we have a tough couple of months/years ahead, I believe most of us will come out of it fine. Can responsible fiscal conservation prevent/temper some of this potential stress? – I think so, and look to our leaders to err in the conservative during this volatile period. I think they are denying the problem even exists (lowering interest rates, etc.). I hope I’m wrong either way!
