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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (45959)	11/30/2008 1:24:14 PM
From: tejek	Read Replies (1) \| Respond to of 149317

Lizzie come on.......how many tech stocks were once trading for over $100 and now are trading for less then $10 bucks? Where did all that wealth go? There is huge debt....but much of it doesn't appear on any company's books. The debt is with all the shareholders who got burned. Thats the way its supposed to work. Yes, that's the way bubbles work......they create a lot of wealth and than a lot of that wealth is lost. And the same thing happened with the tech bubble as with the housing bubble. The difference.......the housing bubble was much, much bigger and consequently is effecting many more people. What is supposed to happen is a bunch of names come up and most die and some are left. That is new wealth, the companies left who become giants. But the whole hypergrowth phase is contained to the growth area itself. What is NOT supposed to happen is 200 year old companies are going under after a boom. Also I can't think of any new companies that were created by the housing bubble to serve it in the same way that Apple, MSFT were created in the PC bubble. Even the housing companies that "boomed" were the same companies that had been around forever. Whatever the housing bubble was, it was not a classic boom. That doesn't make the housing bubble any less a bubble. And there were a ton of small, start up housing developers during the housing boom that are folding. You didn't notice them because they didn't go public with stock. Nonetheless, those firms have closed their doors over the past two years. Bottom line: bubbles don't have to create new firms although its very likely. I don't think the tulip bubble created any new firms.....it was the same trading firms that promoted tulipmania but it created a lot of wealth that was lost when the bubble burst.