<nettime> The Nasdaq Is History

["nettime's_roving_reporter" <nettime@bbs.thing.net>]

<http://www.newsfactor.com/perl/story/8679.html>

The Nasdaq Is History

By Dan Gebler
NewsFactor Network
April 4, 2001

One of the quirkiest dilemmas surrounding the skyrocketing success of the
Nasdaq exchange during the high-tech boom times was that when the Comp
shot through the 2000 barrier and orbited into the 4000 and 5000 levels,
it became difficult to associate the index with a four-digit historical
year.

With the Nasdaq crashing through the 17th century mark and hitting the
1680s on Tuesday, however, it's time to welcome back the Puritans of
colonial yore.

Tech time has always been speedy, and the tech-heavy Nasdaq has been
pushed up and down by the rise and fall of the tech sector.

Throughout the early 1990s, the index hovered below 1000 -- equivalent to
the Middle Ages and critical to those who got the early jump in
technological discoveries (body armor, battering rams and server routers),
but certainly not as noticed by the broader public as it would be in a few
short years.

In 1995, the Comp passed the important 1000 mark -- still medieval in its
date-equivalent, but inching toward familiar, modern territory for
Americans investing in tech stocks. In 1997, the Nasdaq crossed 1500, the
mid-millennial mark, and was headed into the modern era. Enlightenment!

By 1998, the Nasdaq raced ahead of its date-equivalent for the first time.
The industrial revolution and the 20th century became blips in time as the
markets blasted into the future.

Overheating History

Investors bought it all, accelerating time and profits and heralding the
arrival of the New Economy. Having long forgotten Herbert Hoover's boast
that Americans in the "Roaring 20s" would have a "chicken in every pot,"
the 20th century closed with the oft-heard Clintonian reference to the
'longest peacetime economic expansion in American history.'

As the calendar years read 1998 and 1999, the Nasdaq soared to unheard of
figures: 3000, 4000, and eventually, with an 88 percent expansion over
just six months, 5132 on March 10, 2000. That's when the history of the
Nasdaq's hyper-drive came to a screeching halt and, like a delayed Y2K
reaction, fell into a millennial freefall.

It has now been over a year since the Nasdaq peaked, and we are still
looking for the Comp to finally bottom out. For many, the 2000 mark has
become an important psychological barrier, not only because we've been
there before but because each time the index dips below 2000, we feel like
we're taking a trip back in time.

Been Here, Done That

The Comp re-entered the 20th century on the way back down on March 12th,
closing at a Roaring 20s level of 1923. By March 16th, the index reached
1890 and the reform-minded Victorian era.

Just last week, the Comp has hit some of the darker days of the 19th
century. Last Wednesday's close was at 1854, the same year that Charles
Dickens published "Hard Times." In 1854, Americans were hopeful that the
sectional conflict that would eventually lead to the Civil War would
"bottom out" with the signing of the Kansas-Nebraska Act. No dice.

On Thursday, the Comp hit 1820 -- how low can you go, James Monroe? In
fact, many investors would much rather have tried to sort out the 1820
Missouri Compromise fiasco than deal with the Nasdaq's lowest mark in two
years.

After a brief shot in the arm on Friday, the Nasdaq continued staggering
backwards through some of history's most prominent struggles. Like the
colonial participants of the Boston Tea Party who threw tons of British
tea overboard rather than pay new taxes, investors sold off tech stocks
Monday so they wouldn't be left holding them when the market hit a new low
of 1773.

Dancing In the Dark Ages

Terrible Tuesday's calamities had the index hovering around the 1680 to
1700 mark. While we'd like to remember this late 17th century period for
John Locke's theories on civil liberties, the Nasdaq's backward slide is
instead conjuring up images more worthy of the Salem witch trials.

But just like early Americans who ultimately favored Locke's brand of
reason over the irrational hysteria of Salem, investors are now standing
at an historical crossroads. They must appeal to common sense, recognizing
not only that the index will eventually rebound but that it is also highly
unlikely that the Nasdaq will revert all the way back to the 5th century
days of Attila the Hun.

The shakeout has indeed been devastating, but only as earth-shattering as
the rise of the markets in the few years previously.





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