>Doug Henwood wrote:
>
> > . Good thing Jordan's convinced us it could go on
> > for years - otherwise, the collapse of the IPO madness could have
> > major real-world effects!
>
>I would like to see the "otherwise" argument worked out in detail. It
>sounds right, but I don't know enough about technical economics
>to see exactly how it would work. I've seen some posts that
>argued the dot.com bubble was more or less self-contained and
>that its inevitable crash would not have real world effects unless
>the players in it had borrowed too much.
In lots of cases it's hard to tie developments in the stock market to anything in the real world. In the tulip.com mania, however, there's been lots of fallout: salaries for workers that otherwise money-losing firms couldn't afford to pay, real estate bubbles in markets that are sources or uses of these funds (NYC, Seattle, Portland, Silicon Valley, etc.), expenditures on computer hardware, and massive ad spending. On the nonstimulative side, e-tailers have no doubt put downward pressure on retail prices, so the demise of some of these firms might ease the pressure on brick-and-mortar operations.
There's usually a surge of retail bankruptcies in January, after marginal operations discover that Xmas spending didn't bail them out; it'll be interesting to see if there's anything comparable in the virtual world.
Doug