Your lack of intelligence and common sense is appalling, I hope you aren't convincing anyone of this.


First off your premise starts with a BIG FAT MISTAKE! Equity losses in stock prices have nothing, zip, zero to do with debt service. That is money investors lost, not the company. Some companies are losing money indeed, but it is nowhere near as bad as it seems. As the economy has gone bad many are forced to take non-cash writedowns which basically have no real cash effect. They are for accounting and tax purposes only and in no way are real money losses. The biggest irony is that a loss can actually be a gain in cash, a gain from income being sheltered from tax which improves cash flow. To illustrate, just think of this. JDS Uniphase said they lost $51 billion last year. Do you really think that a company could sell such a limited product like they do and literally have that much money leave their bank accounts? There isn't a chance in hell. McDonalds could give hamburgers away to everyone and still not lose $51 billion in a year. Don't believe losses on Wall Street, they are really in no way a reflection of what really happens, both in accounting and in stock prices. In JDSU's case and in most all others this year losses only reflect a writedown of goodwill that was based on inflated stock prices that were used to acquire companies.


This is extremely important and obviously you are not an astute enough investor to realize that cash flow is what you should be valuing companies on. There are some companies out there with high burdens of debt, but very very few of them are in a position where they can't make their payments. To try to insinuate that because stock prices plunged shows your lack of any true sense of how the business world runs.


Further you talk of deflation and high interest rates, well in a deflationary environment interest rates go DOWN, way DOWN. Anyone with half a financial brain knows this, how about you? Deflation is a very clearly defined situation, one where prices are declining and because of it people don't spend money. After all why buy something today that will be cheaper tomorrow. So they save their money to buy things later, and savings drives interest rates DOWN due to the laws of supply and demand. After all when no one is buying anything the demand for loans goes down and the opposite side, the money looking to loan goes up, hence interest rates don't increase, they crash! If you don't believe me, look at what rates are in Japan, a country that has been in a debilitating deflationary spiral for years.


Lastly, and I could take more issue with your claims, is that Disney and others are not about to reverse split their stock. Reverse split is a very rarely used tactic, done by companies with stocks in the dollar range, not a tactic used to try to fool investors looking at charts. After all anyone could figure out what would happen because you seem to miss the fact that most charts clearly are drawn with splits taken into account. Disney may not be doing well for now, but a lot of it was driven by a forced sale of stock by the Bass brothers on a margin call. For Disney or any other Dow stock to fall in a range where they would even think of doing a reverse split would set off two things. First of all they would be booted from the Dow so it would make your argument moot. Secondly it isn't going to happen. Falling from say $12 to $2 is like falling from $120 to $20. Disney has not had that sort of loss and will not with their quality assets and cash flow. None of the Dow companies will do that. Losses like that are the domain of tech companies that were inflated to begin with due to speculation. Companies with true assets and established brands have intrinsic value that prevents them becoming penny stocks. After all if Disney was say $3/share, wouldn't someone just buy it up for its real estate in its studios and theme parks?


Your comments are scary in that so many Americans might just believe you in a time like this. The lack of economic education in this country is appaling. If enough people at the wrong time make such statements that are so patently false, damage could be done to our financial system. Would that make you happy?