Millions of investors, gripped by a mass speculative mania, had driven dot-com equity valuations to ridiculous, perhaps unprecedented, heights of fancy. When the dot-com bubble burst, the investment Calvinists warned, the market collapse would take both the New and the Old Economy down with it. Well, it sure looks like the Internet balloon has popped. Chastened New Economy entrepreneurs are shutting down businesses. Employees at dot-com startups hold worthless stock options.
Many statistics point to the economy's overall health.
Oil prices are coming down, and the latest data show almost no evidence of wage pressure. So much for economic Armageddon. For one thing, the talk about an emotionally driven, vastly overvalued stock market was greatly exaggerated. Yes, investors got wildly enthusiastic about many a dot-com business model or an entrepreneur's virtual vision. But the theory that millions of investors from around the world have been systematically stupid for the past six years is simply untenable.