The IT bubble cost investors 5 trillion dollars in losses. That technology stole money from people's purses. And the reason is because technology does not create money. Money is needed to create technology.
"Several communication companies could not weather the financial burden and were forced to file for bankruptcy. One of the more significant players, WorldCom, was found practicing illegal accounting practices to exaggerate its profits on a yearly basis. WorldCom's stock price fell drastically when this information went public and eventually filed the third largest corporate bankruptcy in U.S. history. Other examples include NorthPoint Communications, Global Crossing, JDS Uniphase, XO Communications, and Covad Communications. Companies such as Nortel, Cisco and Corning, were at a disadvantage because they relied on infrastructure that was never developed which caused the stock of Corning to drop significantly".
Many companies failed
"A few large dot-com companies, such as Amazon.com and eBay, survived the turmoil and appear assured of long-term survival, while others such as Google have become industry-dominating mega-firms".
And some of them survived to become national champions.
But all in all. The IT bubble ruined people's financial lives and cost them 5 trillion dollars in losses.
The Stock Market Crash of 2000-2002 caused the loss of $5 trillion in the market value of companies from March 2000 to October 2002.[14]
That is why Greenspan lowered interest rates. That is why he further expanded the money supply. To fuel another bubble and help people feel financially whole again.
No comments:
Post a Comment