Computer World is reporting that students are considering changing from finance to IT and software development. There is also specultation that many of the unemployed from Lehman, Meryll and WaMu will be sending their resumes to IBM, Microsoft, Google and Oracle. This is a small sign that the economy is starting to right itself. The sooner labor is put where it can best generate profit, the sooner we can get back to growing GDP.
This development underscores, why we need to reach a faster valuation of these so-called “toxic assets”. The faster money flows out of unproductive investments and into productive ones, the better off our day-to-day lives will get. Money invested in great companies yields cheaper and better products for consumers. For investors it means higher profits, dividends and stock valuations. The longer money is tied up in this bad investments, the longer we delay these fruits by holding back money from people in the economy ready to create new ventures.
Two things will help us get to faster valuations. First and foremost, the government can stop injecting itself into the equation and showering money on worthless assets. Secondly, we can eliminate the up-tick rule on shorting stocks. When stocks are shorted someone makes a profit on the drop, once they make that profit, they can invest that money in something more productive. Instead, regulators like Barney Frank and Christopher Cox would prefer money is left in withering investments.