It is the late 1990s and a phenomenon known as the 'internet' has been touted to reshape the way man operates and lead to ever-increasing productivity. The IT bubble is rapidly expanding in the United State; companies possessing a dot.com suffix floating on the stock market by the minute and share prices doubling and tiipling within hours of floatation.Making a quick off the stock market has never been easier.
Somewhere in the background , Alan Greenspan the Chairman of the Federal Reserve of the United State,the Central Bank of America murmurs against 'irrational exuberance' from investors.Then Long Term Capital Management (a US hedge fund) suffers losses of $4.6 billion in less than four mounths, the now famous Enron fraud reverberates through the system and numerous companies file for bankruptcy,haveing burnt through all their venture capital,never having made a profit in their short stint as they had no credidle business plan.
That shameful episode resulted in $8 trillion of wealth being completely wiped out and the fortunes of millions of investors,big and small ending in tatters.A lesson learned the hard way that if assets,particulerly within the artificial economy surpass their value ( in accordance with economic fundamentals) and overexposure to the capital market in a state of euphoria brought about almost entirely by speculation becomes the norm,the bursting of the bubble is quick and quite painful.
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