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May 2000
The Committee for the Adam Smith Internet Bubble Clock has moved the clock six minutes to midnight.
The Committee for the Adam Smith Internet Bubble Clock has met and
moved the hands forward by one minute to 11:54, six minutes to
midnight. The Committee took into account two of our benchmarks:
- High interest rates are bubble killers. The recent 50 basis point
hike by the Federal Reserve is almost certainly not the last, and
officials are now more determined than ever to head off inflation,
but the economy so far is not slowing down in response to these
moves.
- Industry leaders with credit and cash problems. While dr.koop
and boo.com may not qualify totally as industry leaders, their
problems in raising any incremental cash at all indicate a late hour.
Price WaterhouseCoopers says one quarter of all internet
companies in Britain, for example, will be out of cash within six
months. The internet is a permanent revolution, and will have many
winners. But the financial valuations have been a bubble, and
bubbles are finite.
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