What caused the dot-com bust?
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I was around the age of 16 when the dot-com bust happened(2001 IIRC), so I didnt pay much attention to it, all i knew was that the NASDAQ was crashing. What I don't know is what caused this? I heard from people that dot-com companies were creating companies, and taking investments from investors, but they didn't have any products, but this confuses me since why would an investor invest if there was no product meaning no forseeable income?
anyone care to enlighten me on this subject or point me in the direction of some resources?
Well, that's sort of right, if you take into account that Greenspan is a worthless and harmful person.
Basically, hype and marketing are the culprits, which no economist will ever account for. They believe that if a product sells (or it's stock), that there is a demand in the greater market. They take no account as to advertisers and others creating a market (or buy situation) because that makes economics too complicated, and it goes against what Adam Smith had to say about it. It's especially funny since Mr. Smith did not live in the days of TV or radio, ie, he lived before any modern concept of advertising. (or hype)
Basically, hype and marketing are the culprits, which no economist will ever account for. They believe that if a product sells (or it's stock), that there is a demand in the greater market. They take no account as to advertisers and others creating a market (or buy situation) because that makes economics too complicated, and it goes against what Adam Smith had to say about it. It's especially funny since Mr. Smith did not live in the days of TV or radio, ie, he lived before any modern concept of advertising. (or hype)
Short answer:
Buy Benjamin Graham's "The Intelligent Investor". Read. Learn. Enjoy.
Slightly less short answer:
A disastrous combination of irrational exuberance, gross overspeculation, and belief in the "bigger fool" theory -- that is, no matter how much you paid for X, there is always someone out there willing to pay more.
edit:
Greenspan is most certainly not a "worthless and harmful person". You might disagree with some of his policy decisions, but making unsupported blanket statements like this one are silly.
Buy Benjamin Graham's "The Intelligent Investor". Read. Learn. Enjoy.
Slightly less short answer:
A disastrous combination of irrational exuberance, gross overspeculation, and belief in the "bigger fool" theory -- that is, no matter how much you paid for X, there is always someone out there willing to pay more.
edit:
Greenspan is most certainly not a "worthless and harmful person". You might disagree with some of his policy decisions, but making unsupported blanket statements like this one are silly.
perhaps, but Greenspan is known as the guy who "made central banking work."
in a related note, the fed was established in 1913 to "protect the value of the dollar." since then it has dropped in value 95%.
I don't trust central banking, and I don't ever trust a private monopoly over a country's currency.
in a related note, the fed was established in 1913 to "protect the value of the dollar." since then it has dropped in value 95%.
I don't trust central banking, and I don't ever trust a private monopoly over a country's currency.
Quote:Original post by abstractimmersionA valid argument only if the dollar would have dropped more without the Fed. And, to be fair, the Fed does a lot for us.
perhaps, but Greenspan is known as the guy who "made central banking work."
in a related note, the fed was established in 1913 to "protect the value of the dollar." since then it has dropped in value 95%.
I don't trust central banking, and I don't ever trust a private monopoly over a country's currency.
But I'm going to go with "People finally realized the dotCom sector was a load of crock, and stopped putting money into it."
how can you defend the interest rates that casued the housing price boom? do you believe suburbs actually are worth as much as the realtors say? They produce nothing! and they depend on a worthless distribution of oil (ie, for consumer goods) to profit.
fuck greenspan, and fuck the central bank.
fuck greenspan, and fuck the central bank.
the #1 purpose of the central bank (the fed) is a rosy US economy and I don't know how anyone can argue with that, or what malfunctions that philosophy may cause.
Again, it's not possible that powerful (monetary) forces may influence the market, is it?
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