reply to post by pavil
Only completely uneductated people contribute the "Boom" as you put it of the '90's to Clinton. I was working on Wall Street at the time and it
was the running joke. Clinton had nothing to do with the stock market! Enough said. His economy was actually, by the numbers, one of the worst
economies in 60 years, including Carter's. The stock market on the hand....well thats a differnet and much more interesting story.
I will enlighten you and the otheres here at ATS, but I am sure you will all have something negative to say about the truth, as it is coming from wall
street (the source of the problem) and a republican (am I allowed to say that?).
In the 1990's the stock market was a beautiful thing. It made alot of people rich and made the rich even richer. It turned the average housewife
into a stock jockey and allowed people to add 4 rooms to their house, put swimming pools in the back yard and send kids to college. BUT, it was the
how and the why that is whats wrong. First off.....Greed is good, it allows people to take risk and be rewarded for it. Now, Greed is bad too. It
was the greed of Wall Street in the 1990's that created this "problem" and we are still paying for it today.
The crux of the problem revolves around a PONZI scam (google it to see what it means). Wall Street and the Clinton administration perpetrated the
largets Ponzi scam since the Dutch Tulip craze of 1636 (hence my statment below.....know your history or repeat it). In the early 1990's the jobs
outlook was bleak and Washington turned to technology companies to provide a shot in the arm. There was a sincere push to speed things up and creat
new technologies, but no need for the American public to "upgrade" to new systems. Hence the birth of Y2K. For those youngsters on here, that was
the scare that the world would come to an end due to technology failures of our computers. We had just begun to let computers run our lives and most
people were not able to understand this.
If the government said its time to upgrade, people listened....so Government and big business jumped on the ship and let it go. Washington pushed San
Fransisco and silicon valley and they jumped at the chance. The whole Y2K bug was born. By the mid to late 1990's just about every fortune 500
company had set up a Y2K committee. They were reviewing their own systems and making all "necessary" upgrades. They also reviewed the systems of
vendors and suppliers and made sure they too were complient...forcing smaller companies to upgrade their systems and spend money they really could not
afford. This created hundreds of thousands of jobs. actually more than a million jobs were created including the private secotr and "consultants".
This was huge for the Clinton administration. BUT, nothing was produced by these people. An economy is measured by production. This was the
beginning of the US economy changing to a services economy.
A few things happened here. First off, these new computer companies needed capital to grow. Where did they turn??? WALL STREET. Wall Street was
more than happy to bring these companies public. thousands of companies called on wall street and thousands others had wall street come knocking on
their door. Wall Street would bill the company as a Y2K solutions company. The company would go public for about $18 and first trade would take
place at $90. PROFITS PROFITS PROFITS. This went on for about 4 years, then it was hard to sell. So Wall Street turned to Al Gore's baby and
started selling internet companies. We were told to push everything as an internet play. pets.com, toys.com ... you name it we pushed it. If an old
fashioned company had an internet weg page, it was now a play on the internet. It drove stocks to all time highs. it was crazy and crazy money was
made.
Clinton benefitted greatly from this. 1) it was his stock market, so it was his economy. BUT the economy did not exist. Nothing was being produced.
There were no production increases, no innovations were being made. This allowed for the balanced budget...2) the treasury was collecting huge tax
gains on investment by joe and jane six-pack from their stock trading. People would go home from work and get on their computers and buy and sell
stocks. Holding stocks for 5 minutes could generate 15% gains. It was insane.
Like everything insane, things must come to an end. It did. Just about after Y2K was deemed a total DUD, companies were forced to lay off for lack
of work. Some companies were able to convert themselve to software soltuions companies and remain solvent, but most crashed and burned. Toys.com
went from $96 to $0. Pets.com stock became worth less than those silly pet socks they were selling. The only thing was Clinton was no longer
President. A new president had taken over. George W. Bush was our leader and stuck with the failings of the prior administration. Companies
collapsed under the new administration, with the biggest 2 being Worldom and Enron.
Enron was s pecial case, it was Wall Streets wet dream. We made so much money on that company it was insane. The concept of Enron was brilliant, btu
again, they went from a company producing oil and gas equipment to an energy trading company. Whats the difference? Now they produced nothing!!!!
There were no "real or hard" assets anymore. Just paper profits. Paper profits are easily maniputlaed and they were!!!!
We on wall street pushed it and pushed it as profits rose, BUT we knew the financial situation of the company and had what we called an Enron Put on
the market. At certain levels of their stock price on the way down there were more and more covenants of their credit facilities going bad and they
had to take extremem measures to correct this, diluting earnings. Everyone on Wall Street knew this and was heavily short enron. Enron was a victim
of the game. The further down they went, the more money wall street made. Wall Street forced them into bankruptcy, because it was good for
profits.
Presidents hould becareful of what they take credit for and what they want credit for.
Some day, when I am slow i woul dlike to create a thread about the economy vs. stock market thing. Or maybe I will just write a book
Now...everyone get back to work!
[edit on 12-10-2007 by traderonwallst
[edit on 12-10-2007 by traderonwallst]