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A brief look at the stock market "correction" of April 14, 2000

Well comrades... it looks as if the stock market has awoken to find itself still part of the same "old economy" as oposed to the "new economy" everyone was speaking of only a month ago when the Nasdaq was at a all time high. In the past month that index has droped more than 34%! Most analysts view a 10% drop as a correction so what does that make 34% - a bear market?

The fact is markets can't go up forever despite what the brokers and analysts say! As shown in the past few days the more the market goes up the more it must snap back to meet realistic valuations based on sound fundimentals such as P/E ratio (Price/Earnings) and actual products in the case of most of the start up Internet companies.

What set the market off on Friday was the Consumer Price Index - a measure of inflation - which showed rising inflation.  And if Alan Greenspan and his friends at the FOMC (Federal Open Market Committee) raise rates to slow the economy to try and stop inflation, chances are it won't work
and what we will end up with is a worst case situation - stag-flation.

Who is going to get the short straw? Mostly the small time investors,  those saving a few cents away for their kids' college or retirement and the
day traders sucked into the market by ads for compaines like Ameritrade or Etrade.   These "modern captialist mavricks"  as one ad referred to
them are going to be wiped out in a major market down turn. All of this adds up to one thing - a replay of the 30s maybe this time the workers of the world will unite to end this cycle of booms and busts and finaly put the final nail in the coffin of captialism!