Quote of the Day: Sunkenness of the Intangible

[timelets]

“As well as helping inflate bubbles, the sunken nature of intangible investment could make it more painful when the bubbles finally burst. We’re used to the idea that when a market crashes, businesses often have to sell their assets very cheaply, since almost everyone else also wants to sell. This is bad enough when the assets are somewhat fungible, like property or fiber-optic cable: the price plummets, but there is usually at least some residual value. But when a bubble based on sunk, firm-specific intangible assets bursts, there’s the risk that the assets will be worth more or less nothing.”

--- Haskel, Jonathan, Westlake, Stian. “Capitalism without Capital.”