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Question how much has been "invested" in the horse race?

Answer:

$50,000 by the owner of the horse who is expecting to recoup his investment from the winnings of the horse and other future deals. Everyone else is gambling, not investing.

quibble, but if we're using this as an analogy to the mortgage meltdown, shouldn't we also add whoever lent the owner the money for the investment in the horse? And then we have the problem with the bubble in horse prices, as they go up beyond whatever they can reasonably be expected to return. The horseowner keeps on 'investing' in his horse - shiny granite trough perhaps, while also buying himself a Hummer. He does this using loans secured by the unrealistic value of the horse. Eventually it all falls apart, the horse goes to the glue factory, forfeits the race, and everybody is broke.

by MarekNYC on Fri Sep 26th, 2008 at 01:06:42 AM EST

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