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The DotCom Crash Revisited

Posted by Hemos on from the navel-gazing-at-its-finest dept.

woginuk writes "At 9:00pm GMT today , it will be exactly 5 years since the Nasdaq reached its highest level, 5048.62. From there on it has been downhill all the way. Most of us have been affected by it, one way or the other. The Guardian has a story looking back on the moment and succeeding events."

4 of 528 comments (clear)

  1. Hysterical? by Onimaru · · Score: 5, Interesting
    Rob Hersov, then boss of Sportal - now vice-chairman of executive plane company NetJets - says the collapse was precipitated by nothing less than "mass market hysteria".

    Well, that's a little bit strong, don't you think? The .com collapse was really tragic, but it was far from unpredictable, hysterical, or preventable. Just basic macro economics -- when there are economic profits (not just accounting profits) in a market then entrance is encouraged, and when these profits dry up then the market participants take a while to come back down to equilibrium, just likePavlov's dogs took a good while to stop salivating when the dinner bell was rung.

    I more agreed with Julie:

    Julie Meyer, co-founder of First Tuesday, puts it this way: "It's not that I didn't think it was coming. It was that you never see the shape of things until it happens."

    Boy, how true did that turn out to be?

    --
    adam b.
  2. What the Bubble Got Right by semaj · · Score: 5, Interesting

    Paul Graham has an interesting essay on "What the Bubble Got Right". It's worth remembering that some of the companies that lost 90% of their value are still worth billions today - e.g. Yahoo.

    Looks like the server's smoking already - you can at least get the text from Google's cache.

    --
    Meep meep
  3. Looking back by gtrubetskoy · · Score: 5, Interesting

    I remember there was a pretty interesting comparison to the railroad boom and bust posted here a couple of years back, unfortunately I couldn't find a link to it. I think the railroad boom came in two waves, the second boom started about 5 years after the first and was much larger, and the bust was more devastating too. So we could be in for another bubble soon.

    Also, here is an interesting read. I don't see the date on the article, but the wayback machine has it on Mar 2001, so it was probably written right at the peak.

  4. Re:Real Estate Bubble - Stock Bubble by Anonymous Coward · · Score: 5, Interesting
    The sequence of events to follow, from what I've read:

    1. Foreign countries decide propping up the dollar is a bad bet, and so start pulling out, slowly.
    2. Other countries see this and the acceleration begins, with no country wanting to be the last one holding dollars.
    3. The fall of the dollar continues, picking up speed.
    4. Interest rates get raised quickly to encourage foreign investment despite the weak dollar.
    5. The real estate market collapses.
    6. Taking the stock market with it.
    7. The U.S. economoy goes into recession.
    8. Bush White House continues spending on wars.
    9. The recession turns into a near-depression.
    10. The rich buy up houses and land and everything of value, at dirt-cheap prices.
    11. The U.S. is now a sharecropper economy, with 90% of the population being renters, and the rich being the owners.