Market Cap Meltdown!
By James J. Cramer
Originally posted at 2:22 PM ET 2/28/01 on RealMoney.com
One year ago all seemed right in the world. The Nasdaq was on fire and the mutual funds were red-hot. A year later, $2.2 trillion of NDX, or the Nasdaq 100 index, has been vaporized. Vanished. Like it never existed.
Take a look at the chart below (I know it's huge, but just take a quick look). [Worth checking out, LBOers. Sample: Market capitalization lost in Microsoft in one year's time, $167,731,333,053; equivalent loss for Intel, $194,749,375,000; equivalent loss for Cisco Systems, $301,155,745,313 – the list goes on and on.] ...
Look at these losses. Now consider that, according to the SIA, 49 million homes own stock. That's a powerful amount of loss to inflict on the public. Of course, we don't know how the losses are concentrated. We can't just say each household lost $44,969, which would be the loss divided by the households. Nor can we say, well, that will be made up by the $1.6 trillion tax cut (that would be $32,520 per household if only stock-owning households got cut). ...
This table is a graphic depiction of the wealth effect in reverse. It is extremely sobering and an arrow in the quiver of anyone arguing that the Fed has its work cut out for it. ...
[Much as King Canute had his work cut out for him. Full text: http://www.thestreet.com/comment/wrong/1323770.html]
Carl
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