Re: Economics and predicting disastrous "busts" [was: Re: More on dispatching by function return type]

["Jon L White\(G\)" <address@hidden>]

To be truly precise, yea the implosion started earlier than 9/11;  but most
pundits didn't really know it was "The End" until sometime later.  In
repsonse to the query "How come you didn't warn us in advance about the
economic bubble bursting?",  . . . Fed Reserve Chair Alan Greenspan modesly
replied: "Well, the only way we know that it is a 'bubble,' instead of real
economic growth, is in retrospect  when it later goes bust."  It took a
while to realise that the "downturns" of 2000  and early 2001 weren't just
"minor adjustments" . . .

I'm not sure what your sector of the economy hinged upon, but during
calendar 2000 and much of 2001, all of the eB2B players---CommerceOne,
Ariba,  I2, etc--still seemed to think they were going to "make it,"  that
they had viable, long-term business plans.   Although CommerceOne's
employment topped out in mid-to-late 2001, and began declining shortly after
9/11, it wasn't until April 2002 (when a round of deep layoffs began) that
one could take confidence in one's pessimism.

I picked the 9/11 date because all of the eB2B ventures were funded on the
premise of a growing "Business-to-Business" marketplace; and very shortly
after the tragedy, the ripple-down effect of the loss, and the depression on
virtually all businesses, doomed even the most optimistic B2B'ers.

Here's a more concrete example: the Fidelilty "Select Electronics" mutual
fund seemed to be a pretty good indicator of the "HiTech" sector, and it had
been flying high (e.g., annualised total returns of 50% or more for the five
years preceeding 2000.)   It sank by a relatively  low -18% in 2000 and -15%
in 2001.  But it plummeted over -60% in the months following 9/11 (only to
rise +72% over calendar 2003.)  See
http://content.members.fidelity.com/mfl/64/histperf/0,,316390863,00.html

Oh, if only we were to have known "yesterday" what we know "today" . . .



-- JonL --

P.S.  I'll leave it as an exercise for the frustrated to note that a 72%
rise after a 60%loss still leaves a big -32% hole in your  pocket. -:(


----- Original Message ----- 
From: "Mike Newhall" <mike@newhall.net>
To: "Jon L White(G)" <jonlwhite@sbcglobal.net>; <ll1-discuss@ai.mit.edu>
Sent: Monday, January 05, 2004 6:09 PM
Subject: [off topic] Re: More on dispatching by function return type


>
> At 01:48 PM 2004.01.05 -0800, Jon L White\(G\) wrote:
> >over relational sentences.  It turned out to be far more powerful than
SQL,
> >and was actually gobbled up by CommerceOne as the basis of its eCommerce
> >database engine in 2000; but as most of you already realise, after 9/11
(of
> >2001) the overwhelming majority of these dotcom type companies went
belly-up
> >due to a diminished marketplace.
>
> Odd misconception: as someone intimately involved in Silicon Valley and
the tech stock market at the time, I can tell you that the dot-com bubble
burst at approximately 5:00 pm on Friday April 14th, 2000.  That may sound
ridiculously precise, but there's a (irrelevant) story to justify that point
in time.  But the point is the dot-bomb implosion had nothing to do with
September 11th.  I was laid off from my dot-com job Friday September 15th,
2000, along with the most of the rest of the company.  I felt like I should
turn out the lights on my way out of Northern California in June of 2001.  A
few months later, 9/11 only trampled a corpse.