posted on Jun, 15 2006 @ 03:41 PM
the Dow had already started to decline a year earlier. Jan 2000 the Dow was at 11,908.50 and in April of 2001 it was as low as 10,940 or so. Yes,
it did show some signs of possibly turning upwards prior to 9/11 but the decline had started already.
The NASDAQ ended 1999 over 4,000, peaked in March of 2000 and began the steady decline until May of 01 where it popped up a bit and then began falling
In March of 2000 Clinton and Blair (I think it was Blair) signed an information sharing agreement that stunted the growth of the biotech market. This
was the beginning of the end for many of the nasdaq high fliers.
then, a year later, the markets had tanked and in March and April of 2001 people got their mutual fund reporting for their taxes. They had these
massive capital gains that they were being taxed on but their funds were already in the toilet. Money was yanked from the markets to cover taxes,
bringing the markets down some more. The flow ebbed in the summer and the brave and the ballsy, seeing the beat up prices, jumped back into the
waters, only to be greeted by the 9/11 tanking a couple of months later.
Now, when you couple the market tankings with the unnecessary expanding and spending many of these overvalued companies tossed around, you were
dealing with a huge problem. All the corporate borrowing and based on inflated values and profitless companies resulted in many of the tech stocks
folding and leaving investors and lenders in their wake.
We were already into the beginnings of the resession, 9/11 didn't cause it and 9/11 didn't start it. It only made it worse.
The economy is cyclical. A president's actions and global events can tweak that cycle. Clintons acts made the run up faster and larger and when
things move up too fast or get too large too fast, the ensuing reversal is that much worse.