ajtj99's Market Pulse

[rich ruscio]

OK, I'll take a shot.

Let's be simple, and say that wealth = cash plus assets.

Everything that you write about gets called into question because of the requirement to value assets as cash. That is what mark-to-market is all about. Some examples:

Fraud: I take your cash and give you an asset which is not immediately translatable back into cash.

Madoff: He takes your cash, and gives you a claim on a future stream which cannot exist. (see Fraud).

Assets Marked Up x times: See Fraud. Although, if you bought an asset not worth the cash, there's an issue on both sides of the transaction.

And, on and on. Overpaying for an asset is the requirement to put cash into fraud. The cash still, and will always, exist. The cashable value of the asset, well, not so much.

Separate out cash and assets as wealth.

Take the money and run ...

rr