Monday, 10 March 2003  8:30 am
Today marks the three-year anniversary of peak of the NASDAQ "bubble". On March 10, 2000, the NASDAQ composite index hit its all-time intraday peak of 5132.  We are all painfully aware that the NASDAQ index is now at 1305, with the futures market indicating a lower open this morning.

To say that the last three years have been tough for technology companies, their employees, managers and investors is an understatement. The question on all of our minds is "When will the wringer-cycle end? Are we out of the woods yet?"  Some  insight can be found in an OECD On  interim briefing on the global economic outlook that was released on Friday. Here is an excerpt:

"The global recovery, which we described as hesitant back in November, is still faltering, against the backdrop of an intervening hike in oil prices and lingering geopolitical uncertainty.  But while overall the cyclical setback turns out to be somewhat deeper and longer than hoped for late last year, there are differences across countries.  Loosely speaking, and allowing for some erratic quarterly movements, the US recovery remains broadly on track, euro area activity is weaker than anticipated, while recent growth data in Japan have surprised on the upside.  In a vast majority of OECD countries, growth is currently well below potential."

The OECD is now projecting that the US economy will grow 0.8% in the first quarter of 2003, while the euro economy will only grow at 0.3%. Within Europe, the UK is projected to have the strongest growth at 0.4%, and Germany the weakest at 0.2%. The OECD is still projecting a "rather flat" economy for Japan. One of the reasons the OECD said that it is "scaling back our already modest growth projections for 2003" is that business and consumer confidence continues to fall in Europe and the US after peaking in 2000-2001.

Despite the faltering global recovery, oil prices, consumer and business confidence, and geopolitical uncertainty, my guess is that the wringer-cycle probably is mostly over, and that we will start to emerge from the woods in the next few quarters with the US economy pulling the train, as usual.  As opposed to three years ago today, when tech stocks were priced for everything going right, tech stocks today are priced for everything going wrong, short of the end of the world.