Yep, LTCM and the Russian default on their debt and currency, caused the markets to tank. But it wouldn't have been devastating.
But, the resulting actions resulted in the Nasdaq going from 1500 to 3000 in about 9 months, and then the y2k fed money pumped it to 5000 in the 2 months before and after y2k. As the nasdaq strived for equilibrium, while the money was being drained, oil prices were going up. Combined with higher interest rates, which were fighting a phantom inflation, what was a fairly healthy economy, but not one deserving of going from 1500 to 5000 in 18 months, came down with a cold. Add to that, disappointmentss in the rollout of broadband, and the resulting inventory buildups in telecom and semi industries, and voila, a recession.
It all shows in the chart, and the only significant correlating factor is AG pumping money into and out of the economy. The growth rate remained about the same, until late 2000.
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