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A not insignificant fraction of all capital assets is not in the stock market, but in (generally) far less risky investments like bank accounts, corporate and sovereign bonds, or real estate. As they (usually and in the long run) have a lower return, a higher return on stocks might very well be sustainable even in the long run, as long as economic growth runs at a reasonable clip.
Friends come and go. Enemies accumulate.
Also, if you buy the existing asset on credit, the existing asset acts as collateral. If you borrow to build, there's no collateral until the thing is built.
Therefore, the banking sector has a bias against lending for capital formation and for lending towards asset bubbles.
There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman
True. Which is why people talk about risk-adjusted returns, and why choosing the highest risk-adjusted return is what you should, given that the absolute level of risk is something you can stomach.
Peak oil is not an energy crisis. It is a liquid fuel crisis.
(Also - project finance bankers do not get million-dollar bonuses)
Ball-park figures is what I am looking for really.
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