Loading ...No, It’s Not 1998
It’s worse.
Yet it is worth recalling that the U.S. economy survived 1998 just fine, with the benefits of low interest rates and inexpensive energy providing a bigger boost than whatever slower global growth and a stronger dollar took away. The real risk, it turned out, had nothing to do with anything lurking overseas. Instead, it was excessive valuations being paid for some stocks and the too-good-to-be-true financial statements that some companies had begun to manufacture that left investors exposed. You mean like megacap companies like Amazon selling at a thousand times earnings (if it has any at all) and firms such as IBM (and others) manufacturing “earnings” by playing the buyback-stock-with-borrowed money game? That sort of manufactured financial statement? Or was it something else. Oh yeah, it was. But is there really much difference in kind and character than what we’re seeing now? I think not — indeed, if anything it’s arguably worse now in that it’s not just “one sector” (that is, tech) playing these games today — it’s literally everywhere!