free invisible hit counter Economonics: Another laissez faire mechanism?

Economonics

Monday, October 17, 2005

Another laissez faire mechanism?

I believe the venture capital market in the US needs to be watched more closely than it is now. By "watched" I mean analyzed not regulated. I believe as a whole there is a lot that can be implied by the amount of money going on the VC market.

  1. The majority of people believe that the equity market, not being volatile, will be fairly stagnant in the medium term.
  2. The majority of people believe that tBonds are worthless because their stagnant return is still below the equity markets stagnant return.
  3. The current business environment is not lending itself to new technology that will give any one business a competitive advantage thus creating high return rates.

Because of these points people rather invest in new firms that want to try industry changing technology. Even though these companies have higher risk, the technology they are developing is economy changing such as the steel industry was in times past.

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