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Politics : Politics for Pros- moderated
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To: Lizzie Tudor who wrote (12517)10/16/2003 2:06:14 PM
From: Nadine Carroll  Read Replies (2) of 793587
 
The republicans used to blame the stock market bubble for the carnage in the high tech industry, the problem with that is that here we are 3 years later and a bunch of the bubble stocks are back to their old highs with more revenues than they had in 2000. So the "bubble bursting" excuse doesn't really work.

A handful of bubble survivors, maybe. The rest are penny stocks, or dead entirely. Go look for any class that soared in the bubble - ecommerce? web engines? internet consulting companies? telecom? and then go tell me if they are all back to their highs, those you can still find.

As for the big hi-techs, the very best of them are trading now for half or less what they traded for then. Microsoft traded at a split-adjusted 60. Today it's 29. Sun traded at 60. Today it's 3. Cisco traded at 80. Today it's 21. Dell traded at 58. Today it's 36. And these are the best companies, the ones who not only survived but outperformed (well maybe not Sun). Look at the market: The Nasdaq topped out over 5000 in March 2000. Today it's 1950.

No, we didn't just have a "bubble". We had a full-bore, devil-take-the-hindmost mania. Tulip city. The workout after such a mania is not quick, and frankly I'm amazed that it hasn't been even worse than it has been. I keep waiting for the other shoe to drop.

There's very little a sitting President can do about a stock market boom and bust and its effects on the economy, one way or the other. The Fed Chairman has more influence, but it's still limited.
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