« The power of the brand | Main | Governors and innovation »
February 28, 2007
Stock market
Once again the stock market has reminded us of the fragility of intangibles - and the power of that market intangible which Keynes called "animal spirits." By that Keynes meant business confidence. But it equally applies to the loss of confidence. Roughly $600 billion of value (according to analyst Howard Silverblatt as quoted in the New York Times) evaporated yesterday on the US exchanges alone. As Steven Pearlstein, it was a situation when "unvarnished greed gives way to unadulterated fear."
It is hard to tell how much of those lost billions were simply speculative value (bubble) versus real intangible assets. I'm sure a great deal were bubble assets. When the market comes back and settles down at a new level, we will be able to judge the amount of froth. But not all the loss will be froth. Some may well be due to a post-drop reevaluation of risk and therefore a reassessment of the value of company intangibles. Unfortunately, it will be very difficult to sort out the two.
Posted by Ken Jarboe at February 28, 2007 8:08 AM
Trackback Pings
TrackBack URL for this entry:
http://www.athenaalliance.org/mt/mt-tb.cgi/1183