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Examining the New Bubble
abb_road writes "Whether or not we're in the midst of another boom-bust cycle in technology is a matter of fierce debate. BusinessWeek discusses what constituted that last bubble and looks at current trends to see if we're on the verge of a new one. From the article: 'The Great Bubble of the late '90s shaped a generation of Internet entrepreneurs and investors much as the Great Depression shaped a generation of economizers in the mid-20th century. 'The bubble generation is much more attuned to the fact that things can get really out of hand,' says Bill Burnham, a former partner at Mobius Venture Capital. 'There's a level of caution that has been ingrained.'"
I've been following the stock market, and in my opinion we're not seeing a bubble. We're not even seeing a rise. In my opinion the value of the stock market has been reflecting inflation in the US dollar and in other currencies around the world. We aren't seeing all of it in the stores - yet - but it's coming. The prices of precious metals are a good indicator of what's going on.
Alan Greenspan is no longer the Federal Reserve Chairman...Ben Bernanke has held the office since Feb. 1 of this year.
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~ |rip/\/\aster /\/\onkey
Once? The dot-com bust was not the first bubble by a long shot.
cite: wikipedia
There are also the current real estate bubbles around the globe.
Um, no, the dollars are worth less - that's all that's happening.
= m&q=l&c=gld
http://finance.yahoo.com/q/bc?s=MSFT&t=1y&l=off&z
That's the price of gold compared to MSFT (just out of interest) for the last year. Gold is traditionally a very good (if not excellent) hedge against inflation and shows the devalueing dollar situation pretty well right now.
spoonerize "magic trackpad"
My personal experience contradicts your assertion. I have been in meeting with Greenspan, and one of my business school professors worked for him for several years. Alan Greenspan was famous for his incredible knowledge of details and how they impacted the macro view of the economy. For example, he studied weather patterns, road construction/maintenance schedules on highways and bridges, as well as numerous other details, to help him extrapolate on the shipping industry, which then helped him extrapolate on industries that rely on the shipping industry (i.e., all of them), and how to combine those extrapolations to arrive at a policy for the Fed. The guy is very smart. If he was really a political hack, he would not have survived five presidents, including a Democrat administration, which included Robert Rubin as Treasury Secretary, a very smart (and very political, but fortunately not driven by his politics) man in his own right.
The article notes "Web 2.0" is an ambiguous term, but uses it nonetheless. I'm curious - what exactly is Web 2.0? Is there an RFC for it? Do the W3C have anything to do with it? Can you get a job as a Web 2.0 developer? I suspect the answer to all of these questions is "no," and that we're looking at another media mountain born of a technology molehill.
a r2006/tc20060313_860688.htm?campaign_id=topStories _ssi_5) talks about Web 2.0 as a collection of technologies and techniques, which leaves me wondering what defines these techniques as "Web 2.0" besides their current popularity. The buzz around AJAX makes some sense as it is having a genuine impact on the usability of websites. However, does a website become part of the "Web 2.0" simply because it has a sprinkling of asynchronous JavaScript and XML? Or does it need a tagging system, or WYSIWYG editing (or whatever other technique is currently in vogue)?
One press article (http://www.businessweek.com/technology/content/m
We've had this issue before. Remember "DHTML," which was simply a buzzword referring to the combination of JavaScript, CSS and HTML? It was great for the IT publishing industry who could release a whole new raft of books on these technologies, but for the rest of us it was just another confusing ambiguity.
Rebranding combinations of old techniques merely creates a bubble of hype that confuses management, developers and users. If you've ever uttered the words "Web 2.0," then shame on you!
I just don't see a bubble in tech. Yeah, there's some crazy money being thrown around, but it's not from investors as in the 90's, it's coming through aquisitions. By the late 90's everyone and their mother was a stock speculator. People saw these crazy returns and jumped in to get themselves a piece of the pie. Naturally, this phenomenon fed on itself and everything became overvalued incredibly quickly. When the big stock holders and VCs started selling off their stakes, all that money evaporated and so we have a crash. Right now I don't see anybody blindly investing in whatever tech stock they can to exploit returns that are way higher than they should be.
Where I DO see it is in commodities and certain housing markets. Metals - Particularly gold and silver - are going crazy right now. ETF stocks have opened up so you can buy "shares" in metals, and when you do, the ETF buys physical metal to store in a vault (it's just gold and silver now, AFAIK. Cheaper metals would cost too much to store) The rise of these ETFs allow any joe to buy gold and silver on a whim, thus creating a large potential of making them overvalued. Compounding the problem is that a lot of countries are getting scared by the inflating dollar and hedging their investments with gold, further driving up the price. The rise of the price due to this activity is a lot of the reason the gold & silver ETFs were created in the first place - The price activity has the attention of the public.
Don't get me started on housing in the US. I have seen this coming for three years. In the US, places in the midwest and south are going for what they should be, maybe even below - You can pick up a nice 3 bedroom 2 bath house with 1700 sq ft of living space and a good sized lot for the low $100's. These markets are safe from the bubble. But the same place out here in the SoCal city where I live will cost you at least $550,000, and that's with practically no lot. Even in the High Desert, which is on the other side of the mountains and 80 miles from LA, it will cost you $300,000 to get in the same house. Two years ago the same house was $160,000. It's ridiculous. The rise in prices is mostly due to the same mentality that caused the stock crash of the late 90's - People saw their homeowner friends building massive equity (and cashing it out to buy nice toys) and wanted to get in the game before it was too late. So they all started jumping out of the rental market and buying houses, which reduced inventory and thus drove prices up. The banks noticed the meteoric rise in equity, and they started loosening their credit criteria - They'll still make a ton of money even if the place forecloses. Pretty soon anyone who could breathe was qualifying for a home loan. Many of them could not afford a standard 30 year fixed rate loan, and so took out an ARM (adjustable rate mortgage, for those of you with no home buying experience) loan instead. So they were given a really low initial interest rate that would stay fixed for the first 5 years and then the banks would be allowed to increase it with the market.
Then came the "creative" loans. When people could no longer afford 30 year fixed or standard ARMs, banks started pushing "interest only" loans. This is basically an ARM loan except you don't have to pay principal on the loan during the fixed period (again, usually 5 years). What's in the fine print is that after the 5 year period is up, you must start paying the principal you weren't paying during the fixed period. Coupled with increasing interest rates, a homeowner could be looking at significatly higher payments.
But it gets better. Then came the "partial interest" loans. So now, not only are you in an ARM and not paying any principal, but you are also only paying a fraction of the interest every month. This is how a lot of people making $40,000 a year are buying houses that they would ordinarily need to be making $130,000 a year to afford. These are also called "negative am
-R