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[edit] The Causes of the Technology Meltdown of 2000-2002

In I worked for a technology company during the tech-meltdown.

There were multiple causes for this economic downturn.

1. The necessities of life are food, shelter, HVAC, freedom, healthcare, etc. Technology is nice, but not a necessity--you can usually make due with what technology you already have, or pay only to maintain and repair it.

2. Central banks in North America were tightening the money supply (raising interest rates). The effect that this has on world economic activity is that necessities are maintained, but the frills are cut back or eliminated. Monetary liquidity is a threshold item and when investors are unable to cheaply borrow risk capital for new ventures, the price of stocks drops due to reduced money inflows, and more out-flows probably instead into real-estate or the bond market, and staff of new venture firms are slashed. All non-essential job positions are laid-off, thereby lowering labor wage demands, and hopefully this lowers demand for everything, thereby supplies increase, and this triggers price reductions to clear inventories, etc--thereby lowering inflation. Central banks usually work in large part for the appointing government bodies who appoint the chairmen. When the unemployment rate gets too high, this hurts tax revenues. Things are compounded if welfare rolls get too high from too many people with no income.

3. Normally Internet web page banner ads were either changed randomly per page view, or were targeted to the given web cookie profile, and reasonably good revenues were being generated by this activity--several dollars per thousand views of a served ad. But in early 2000 some old-school advertising firms in NYC began to pooh-pooh the idea of any web advertising at all. They stated that the banner ads rarely caused a web visitor to do a click-through of the banner ad--They said , "So why pay any money for such garbage ads?" Of course the old media, old-school ad execs wanted a return to TV, radio, and newspaper ads with which they had vested interests in redirected (away from the web) advertising budgets. (Note that the same can be said about a TV car ad--all viewers don't immediately get hypnotized into buying the given car?) Web banner ad prices fell one hundred fold within a two month period. Web site budgets and staff had to be cut. Lay-offs happened gradually. Many sites started to run negative cash flows. All new orders for software, consulting, or computer servers were cancelled. Existing server equipment was auctioned off at fire sale prices. Stock prices of all web companies fell. Web companies and Internet networking and telecom equipment manufacturers supplying network infrastructure and networking equipment manufacturers started to lose money, go out of business, and had to lay-off millions of employees world wide. The NASDAQ stock markets crashed several hundred points per day for several months (from a high of 5000+ down to eventually a low of about 1200). New technology ventures could not get funding because they were seen as too risky. Excellent consumer electronics manufacturers also went out of business because a lot of their customers were tech people or were also afraid for their jobs. Corporate takeovers that used web company stock as collateral stopped forth-with. Many small stock market investors were reluctant to pull their money out of technology stocks because of some tech-specialty stock market analysts leading cheerleader-like crys that in a week or a month, the market would rebound. We can see that these tech cheerleaders only served to increase the severity of the losses sustained by the small investors who even partially listened to them. Leveraged / debt tech stock purchases of previously ever climbing companies now had to be repaid to lenders.

4. The consortium known as OPEC raised oil prices by a large chunk of money per barrel and even when the economic downturn was underway, they did not lower the price appreciably. In about the same period of time bad weather caused damage to a number of the southern USA oil refineries that caused them to shut down unexpectedly for repairs. The repairs took weeks or months before some refineries went back online. This caused the USA to have to tap into its reserves to prevent short term shortages in the supply of refined crude, and this also caused oil and gasoline prices to rise.

5. Short selling futures and stock traders made millions of dollars as stock prices of many companies having technology exposure went way down.

6. September 11, 2001 terror attacks happened.

7. Travel and lodging industries were hurt by fear of air traveling public to get back into the air, and by severe security alert measures put into place, not to mention the stock market downturn and massive layoffs of their potential traveling business and private customers. More airlines went bankrupt. The rise in fuel prices caused by OPEC and shortages did not help airline companies either.

8. Anthrax terror happened through the mail system. Everything was a suspicious package. Now the borders were delayed with shipment security inspections.

9. When the North American central banks began to lower interest rates in reaction to the severe economic downturn, they acted too slowly, and too late in the game to have any moderating factors in saving the pension and retirement savings that were lost due to the tech meltdown.

10. The severe crash in some technology and telecom and "managed energy/network" companies lead to investigations and audits that revealed corporate malfeasance of Enron, WorldCom, and other companies. Investor confidence was given a severe beating by these guys who made all matters worse by corrupting an already sick economy.

11. Existing bond market investors like Fed Chairman Alan Greenspan saw the price of their bonds rise in price as bank interest rates fell after the meltdown had taken hold. The irony of this is that he controlled the very interest rates that made his own bond investments rise in price. Does this not represents a conflict of interest of a key government official? Oldspammer 09:58, 17 May 2006 (UTC)

12. In Canada, Prime Minister Jean Chretien's (Liberal Party) government reduces unemployment insurance (UIC) benefits, and the extent of the period that the benefits be paid. This increases the pain and damage suffered by laid-off technology workers in Canada.

13. In Canada, Statistics Canada computes unemployment statistics based not on the number of unemployed people, but on the now reduced number of UIC recipients. No means of determining the actual unemployment figures in Canada exist for this protracted economic downturn so that negatively affected laid-off Nortel Networks, Newbridge/Alcatel, JDS Uniphase, etc employees are further depressed particularly in the Ottawa area. Without proper information the various levels of government are unable to effect positive policy changes that would foster improvements to the sad situation. Oldspammer 10:18, 17 May 2006 (UTC)

Oldspammer 09:48, 17 May 2006 (UTC)

[edit] World Population pressures standard of living & jobs

In the events described above about the Technology Meltdown of 2000-2002, the only items on the up-swing were real-estate, distributed foods, and various forms of taxation. The cost of living index is computed based on a basket of goods and services used in every day life. It is used by some economists to signal if inflation is rising too rapidly so that the central banks should raise their interest rates to combat the inflation.

Well, the negative result has been that the employment rate for highly educated technology workers in North America have dropped. Married couples in this sad, reduced income environment have put off having children. As a result, for example, the Canadian birthrate has gone down.

Some technology jobs are now being out-sourced from China and India, countries with high populations, low wages, and slowly increasing standards of living.

In Canada beef producing farmers saw their cattle at auction pricing fall dramatically when the first Mad Cow tests confirmed an isolated case. Mysteriously, however, the lower cost beef prices were not passed on to Canadian consumers by the slaughter houses, meat packing plants, meat distributors, and grocery stores.

Canadian politicians instead of fostering a stable economic environment for raising families by enacting policies that assist their existing citizens, they want to increase the immigration rate into Canada. This in turn increases the inflation rate on necessities such as food, shelter, water, HVAC, etc, since more agricultural land is being converted to housing developments to house the new immigrant population. Scarce jobs grow more so. Existing 1960s built water and sewer systems are extended rather than new structures being put in place. The water pressure is now 30% of what it once was. Electrical power systems are in a similar sad state of affairs. A foolish, unmandated scheme done by the Premier Mike Harris (Conservative Party of Ontario) provincial government in the late 1990s sold off all the latest power stations, a bleeding-edge toll highway & technology system, water quality monitoring laboratory work to private corporations for pennies on the dollar, while at the same time the same government promised that new power generation facilities would soon be built. Nearly a decade after this, no new electrical power generating facilities have been or are being built or plan to be built, and each year the Ontario electrical power system has become more and more fragile with more rolling blackouts and catastrophic shortages and failures happening each year. In addition, the privatization of the electrical power system has seen its CEO get millions of dollars increase in salary and benefits without any performance benefit to merit this increase. The town of Walkerton Ontario suffered a contaminated drinking water crisis where several people died and several handfuls became ill. Millions of dollars were spent on a public inquiry into the e.coli bacteria water quality testing mishap that caused the Walkerton, Ontario crisis. It seems that no proper planning for the transitional shift to using private water quality testing labs was established. The primary two people involved with falsifying water quality records were convicted and sent to jail.

New immigrants who arrive in Canada find to their dismay that the employment situation is grim. Professionals such as doctors, engineers, etc, end up having to drive taxis or wait on tables in restaurants. If an immigrant engineer employed already by a Canadian firm arrives during the high point of an economic cycle, they can quickly find themselves unemployed as the cycle starts to swing downwards again. By this time they have moved into a large new home and have a big mortgage payment to maintain. There are only so many taxi and waiter jobs available.

The main important consideration is world population reduction to reclaim precious agricultural land scheduled for housing development, and to reduce the burden of the water, sewer and electrical power generation system. An additional consideration is that the over populated countries from which some of these immigrants come are relieved by their emmagrants in a way that permits a higher birth rate to be sustained there even longer than it should be before an environmental equilibrium is established.

In large part the world's economic problems are based on the incorporation act. The entities of corporations build their wealth based often on the premise of ever growing commerce due to larger and larger population growth of the world and of its economy. A multi-national corporation can close and open factories where ever its corporate operating officer thinks might be more efficient to conduct the work. This thinking does not take into account that their domestic customer-base are their domestic employees. When their domestic employees lose their jobs, then there are going to eventually be no more domestic customers for their products. A low wage person cannot afford a year's salary to buy a tech widget or service. The counter argument is that if our competitor does this cost reduction move, then they will lose business until they can lower their production costs to keep pace. This argument makes sense when Wal*Mart sales are so high. However, eventually when all business operations have moved abroad, then not even Wal*Mart can afford to hand out goods for free to the masses of now unemployed former development and production staff of closed plants. Nor will Wal*Mart be able to employ all of these people as sales associates, department managers, and night time restockers.

Unfortunately, the solution lies in the hands of your next door neighbor. They have to shop smart by refusing low quality, poorly designed foreign made goods. Unfortunately, many rich people purchase Japanese, German and Italian goods even over North American made products.

This ends us with over paid government officials, poor quality government services, expensive pay per use services that used to be freely available like garbage collection.

Over regulation of private individuals so that taxation in the form of tickets and fines can be levied against minor infractions while more dangerous or serious crime remains more problematic for our poorly trained, poorly paid and under educated police force, government inspectors, and investigators. This is a systemic force for corruption whereby it is easier to convict the innocent than to investigate properly to insure that the guilty are punished.

For example, a Left turning driver is automatically guilty of causing any accident at an intersection. No witnesses need be gathered by police. No accident scene investigation need be or can afford to be, or can technically be conducted by the inept police who arrive at the scene of the accident. A red light could be run (which is a higher level fine), but the left turning driver is at fault because it can be proven easily that they were making their turn. In order to prove that the guilty person who ran the red light is at fault, a closed circuit intersection camera would have to be present, or an independent reliable witness would have to come forward and be willing to testify in court that the red light was run, or that speeding, or that a cell phone, or that drinking was involved. Inept, poorly paid, poorly educated police are most likely to shorten their involvement by ticketing the left turning driver for failure to make a safe left turn / failure to afford right of way to the on coming vehicle than properly investigate the accident.

There is a law in Pickering Ontario that a yard fireplace cannot be used to burn anything but charcoal (as in a BBQ) else a ticketed fine of $25k or 1 year in prison or both can be charged against an individual.

Often a police officer's gut feeling about reading a person's "body language signals" starts the focus of an investigation down the wrong path where no other alternate scenarios are pursued. By the time it is determined that the innocent person has been wrongly harassed by police and the court system, the guilty person is long gone and the evidence trail is cold.

After a number of years in such a corrupt system, an experienced police officer is likely to become him or herself a crook. Often cash found at a crime scene or on the person of a burglar is gathered as evidence, but often half is returned to the criminal in exchange the other half is kept by the arresting officer when the conviction does not succeed or the charges dropped. I was a victim. I swore out in a statement what my cash denominations were prior to police saying what was recovered. In fact, all my money was recovered but half was returned to the thief (or corrupt policeman) because the police officer said he believed the criminal and not the victim. I don't know if the criminal was ever put in jail. Oldspammer 17:44, 17 May 2006 (UTC)


Welcome!

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