WSJ: Why the crash of housing market crippled the economy but the dot-com bubble didn't.
It's obvious why a dot com bubble bursting wouldn't affect things as much as a collapse in the banking/housing markets would do. Quite simply: not many people were invested in dot com shares. Just those people with the spare cash to do so (or the ability to borrow it), coupled with an interest in anything dot com. On the other hand, 99% of us have a bank account, use a bank account to get paid/pay for things and live in a house.
The financial and markets affect everything we do, from buying a loaf of bread on our card (forgot to bring cash), through to people having jobs because people are moving house and wanting new things.
If money can't move and nobody's buying things, it grinds to a halt.
On the other hand, nobody really cared or was affected much by the fact that bluewidget shares went from $2000 to $0 overnight.
posted by angela at 10:20 AM on April 15, 2009
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