Blur is the name of a new book about the information economy, with the title an attempt to capture the speed at which business needs to move in this new age of virtual corporations and ever-changing markets. But this week, "blur" was more apt as a description of the fall of the NASDAQ index, as the market finally decided that even the best tech companies were no longer worth 50 or 60 times their annual earnings. Down more than 100 point at one point Monday, the NASDAQ was also down more than 100 points Thursday. And for the first time in a long time, you can start to wonder whether this market has fallen into a state of irrational melancholy, after too many years of irrational exuberance.
Of course, considering that everyone is now using the dreaded "R" word, a little bit of melancholy is probably in order. Therefore, expect this weekend's parties to be subdued. Unless, of course, you're hoping eventually to buy a nice apartment in New York. Prices should be plummeting any moment now.
On to the bon mots.
1) "Goldman Sachs' Abby Joseph Cohen , the leading light of the bull market and a strategist who as recently as a month ago was recommending that her clients be overweighted toward stocks, finally lowered her earnings estimates for the S&P 500 for the rest of this year and next. Isn't this a little bit like closing the barn door after you opened it and scared all the horses out?"
2) "For months now, we've been hearing that the U.S. dollar was too strong and that it was hurting both foreign economies and U.S. corporate earnings. So the dollar plunges against the yen, and the U.S. stock market sells off in response. What am I missing here?"
3) "Julian Robertson's Tiger Management hedge fund supposedly lost $2 billion betting on the dollar's rise. At this point, if you run a hedge fund and you haven't lost at least a billion dollars on a single trade, you're considered a piker. You're not trying hard enough if you haven't had an entire position fall apart."
4) "Yahoo beat analysts' estimates by six cents and then watched its stock plummet by almost 10 percent. Of course, the company did warn that its prodigious growth rate was not sustainable. But was there anyone out there who really believed that Yahoo was going to grow its earnings 200 percent a year for eternity? It's enough to make you understand why Greenspan hasn't cut rates more. He doesn't want anyone borrowing money to buy Yahoo."
5) " 'It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.' Thus Andrew Mellon to Herbert Hoover. Thankfully, Robert Rubin probably disagrees with this ."
6) "The hardest thing to remember is that business continues as usual for most American companies. You read the business news, and it's all about the markets. Well, except for all that antitrust business on the front pages. Oh, forget I mentioned that."
7) "The average U.S. mutual fund posted a return of -15 percent for the third quarter. And they're off to a raring start this quarter. Remember when we all believed that you had to be fully invested or else you were going to miss the action? Weren't those pleasantly self-deluded days? I miss them already."