Aaron Trask of TheStreet.com writes about overcapacity. But if you read it carefully, he is really talking about malinvestment, and the Fed’s role in preventing the liquidation of the misallocations that have occurred in some sectors.
“Certainly this current availability of easy money through many of these convertible bond deals has made it less likely that you’re going to see some consolidations, primarily because some of these companies now have more cash on hand,” agreed Jim Liang, a semiconductor analyst for Pacific Growth Equities. “In that respect it delays the ultimate resolution of overcapacity.”
