Signs of a slowdown in the U.S. economy are growing, and the most symbolic of them is the decline of the technology-laden Nasdaq index. The Nasdaq composite index, which stood at 3,700 points at the end of last year, shot up into the 5,000 range in May. But its plunge has also been quick, and it recently fell at one point to as low as 2,332, half its peak and about the same level at which it began 1998.
Let's look into the factors behind such wild fluctuations and make some comparisons with Japan's infamous bubble economy of the late 1980s.
At the beginning of the year, American investors were flocking indiscriminately to any information technology-related stock, encouraged by a theoretical "new economy" triggered by an "IT revolution."