Ten years ago today, the Wall Street Journal ran this headline:
It was the first time in history that the Dow Jones Industrial Average broke 10,000. Do you remember how you felt about the economy and world financial markets that day?
I saved that newspaper and remember thinking at the time, we'll look back and this will seem so outdated, like a $0.25 gallon of gas. Looking back now, the Dow has been over and under 10,000 many times. Once we get over again, let's not forget what we're learning about right now.
A bit lengthy, but vanity fair produced an amazing piece on Iceland’s economic downfall. Scary comparisons to the U.S.
http://www.vanityfair.com/politics/features/2009/04/iceland200904?currentPage=all
Here’s another good piece on credit related to social: http://www.fastforwardblog.com/2008/10/05/the-credit-crisis-and-social-software-part-1-why-we-need-a-return-to-credit-based-on-social-relationships/
Nice catch Peter…to think I was just 16 at that time. Amazing how time goes by.
I was just thinking about this very issue while reading “Bad Money” by Kevin Phillips. Wondering why we’ve not learned this lesson already. Bad Money does a great job outlining how we got into this mess in the first place. Kevin reminds us how in the early 80s the Dow was under 1000. Very sobering indeed, especially realizing what that value was built on.
Phillips outlines historically how various cultures (Hapsburgs, Maritime Dutch, Industrial Britain) have all stumbled once they began building economies based on speculative finance rather than concrete goods and services.
But this is not a book report, so I’ll sign off. Sobering post, Peter.
http://www.backtype.com/peterkim/comment/59087269
A certain of speculation is needed for growth. However the Dow Jones index or any other stock market index is more a part reflection of the state of the economy. The behavior of median income, unemployment, prices and other such variables are more relevant to people, even though they may mainly look at the Dow Jones.