I agree with your analysis. No one would argue with the economic logic of retiring these horses early. However, I think it misses the point of why these economics exist. That's what I was talking about yesterday.

In your example, the cost of insurance coverage is related to the value of the horse. The value of the horse is related to the amount breeders can charge for services. That in turn is related to the prices for yearlings.

IMO the prices for yearlings are insane though. That's demonstrable by calculating how owners are doing financially as a group. I don't have those current stats, but I'd be willing to guess they are taking a massive bath these days.

Even though there are intangible benefits to ownership (I know I owned a piece of one once) and many owners are willing to take a loss in return for the excitement, there is obviously some point at which the cost is WAY too HIGH in relation to the upside. IMHO, we are way past that point. IMO, it's not much different than if you charged me $1 million for a 100K boat. I might like the boat but I am still a dumbass if I bought it!

If yearling prices would fall to a level that makes economic sense, everything else would fall too - including insurance, the price you could get to retire your horse to stud, the cost of breeding etc..... As a result, the economic choice between retirement and racing would be more in line with the joys of ownership instead of so obviously weighted towards early retirement for the lottery winners.

That balance would be a huge benefit for racing because if our biggest stars didn't retire there would be better racing, which in turn would attract more fans, which in turn would generate more handle, which in turn would raise purses, which in turn would make the choice of racing vs. retirement even easier.

This is a virtuous circle from which good things flow.

What we have now is a vicious circle from which nothing but bad can occur.

How we got into this mess I can't tell you because I didn't follow the details closely, but it's a bubble just like we've seen in other markets likes stocks, real estate etc.... It will eventually burst and IMO it can't burst too soon because the game is being destroyed even if a minority of people are getting rich due to the insanity (just like a few do in all bubbles).