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Even back when he first expressed these views, in early 1997, they weren't earth-shatteringly original. All sorts of respectable people thought the Internet would transform American commerce much faster than it ultimately did. And in the context of this sensational belief, Blodget behaved almost prudently. Many times he declined opportunities to pump stocks even higher than they were. Many times he cautioned investors against being too optimistic about e-commerce revenue forecasts. Many times he acknowledged that what he did for a living was largely guesswork. Around the time of his name-making, correct prediction that Amazon's stock would rise to $400 a share, a radio interviewer asked him what he thought of Merrill Lynch's more pessimistic view. ''We are all looking into the future,'' he said. ''We all have the same information, and we're just making different conclusions about what the future will hold.'' But what investor wanted to hear any of this? By the time Henry Blodget went to work for Merrill Lynch, the market was actually running ahead of Henry Blodget. By the end of the boom, he had gone from leading the market to trying to keep pace with it.
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[Blodget's email, taken] out of context, during a crash, that sounds pretty damning. It sounds as if Henry Blodget never called a stock as he saw it. But in context, at the end of a boom that has made Henry Blodget a little god, who knows? It's hardly uncommon on Wall Street for analysts to play head games with their firm's bankers and brokers. To me, knowing Blodget's record, it sounds as if the young analyst is simply flexing his muscles. He's saying: if you mess with my turf, I'll mess with yours. It's hard to say. And that's the point: motives in any company, let alone a Wall Street one, are far too messy to be honestly discerned from a handful of carefully selected e-mail messages. The notion that they're more revealing of Blodget's true feelings than the public record is risible.

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The other thing to say about the excessive ambition of Amazon.com is: was it so completely unreasonable for Jeff Bezos -- or, for that matter, any other Internet entrepreneur -- to behave as he did? It's easy to say so in retrospect but, really, at the time, what should he have done differently? He expanded as fast as he could because a) the market threw capital at him and b) he believed, rightly, that if he didn't he would be swallowed up by the competition. The job of the entrepreneur isn't to act prudently, to err on the side of caution. It's to err on the side of reckless ambition. It is to take the risk that the market allows him to take. What distinguishes a robust market economy like ours from a less robust one like, say, France's, is that it encourages energetic, ambitious people to take a flier -- and that they respond to that encouragement. It encourages nerve, and that is a beautiful thing. As the business writer George Anders puts it, ''The personality that allows you to be Jeff Bezos in the first place does not have a shutoff valve.'' If it did, Amazon.com wouldn't exist.

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Now at this point in the story any ordinary person might wonder, ''He got upset by that?'' Yes, he did. ''Historic lows?'' Gross thundered in his column. Then he proceeded to talk bond talk. ''Maybe three months and 100 basis points ago, but not now, I'm afraid.'' He then went on to explain to his readers what G.E. was actually doing: shoring up its balance sheet on the sly. During the boom G.E. had taken advantage of low short-term interest rates and investor lassitude to borrow a lot of money short term, and less money long term. It was like the owner of a house who had opted for the 30-day floating-rate instead of the 30-year fixed-rate mortgage: it was exposed to rising interest rates. At any moment, investors might change their minds about the company and cease to lend it money; if they weren't going to do it on their own, Gross was going to help them. ''GE Capital,'' wrote Gross, ''has been allowed to accumulate $50 billion of unbacked commercial paper'' -- short-term loans -- ''because of the lack of market discipline. By issuing $11 billion in debt, G.E. was sensing its vulnerability.'' Gross concluded by charging G.E. with dishonesty, and saying that ''Pimco will own no G.E. commercial paper in the foreseeable future.''

A few hours after Gross hit ''send'' and posted his column, G.E.'s stock began what would be a quick 10 percent drop, G.E.'s financial officers were on the phone to Gross making hysterical sounds and reporters on G.E.-owned CNBC were accusing Gross of talking down G.E. bonds so that he might snap them up cheaply for himself. By the time Gross finished explaining himself in late April, G.E. had lost a quarter of its market value, and the company was holding hastily thrown together conference calls to reassure investors. In the end, G.E. announced that it would restructure its operations. Gross had written his thousand words or so to slake his literary vanity and chosen, pretty much arbitrarily, G.E. for his material. He himself could not quite believe how much trouble he was able to cause. ''My point was a general one about corporate honesty,'' he says, more than a little sheepishly, ''and I wound up hitting G.E. And I really didn't give a darn about G.E."

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In Defense of the Boom

I know, I know, he's celebrating the little, upstart bastards' (short) period of dominance over the big, traditional bastards -- but that was about all I was getting out of it.

Anyway, I took a criticism of the heard mentality in general. The author takes issue with the press, the government and business that all goes blindly in one direction or the other. That's what I found interesting.

I think he ignores something, though, just offhand. He alludes to it, but he says that the boom produced a transfer of wealth to the "engineers department of America" but later points out how those employees held on to their options to the bitter end. So, sure, money was transferred, but tell that to the workers at, say, Enron that had their pensions decimated.

The author claims the boom was a good thing, saying it's a key aspect of the dynamic American economic system unlike a place like France. But yet when he criticizes Spitzer and government types, asking, "where were you when this all stated and could have done some good," that sounds like he thinks that very aspect isn't all that great. Buddy, you can't have it both ways.

But in a way, he's pursuing the old Margaret Thatcher line. She wanted to see middle- and working-class people bust up the British establishment, not by destroying the class system or by challenging capitalism but by becoming even more seriously greedy, and successful at it, themselves.

It is claimed that Canada escaped relatively unharmed exactly because we didn't have that type of over investment in the tech sector. I guess we're more France-like than American-like, but then, maybe.. uh… someone with more knowledge can answer me this:

As we drive to integrate further into the American economy, I'm assuming we are also driving to integrate further into this boom-bust cycle. Is that what we want? Do we want an S&L disaster, or an Enron, every decade or so?

Now, I ask this knowing Canada got hit hard in 92, but so did the US. The US got hit not as hard this time around and we never, I think, officially declared a recession. And, yeah, we have our Bre-Xs and YBM's and Nortels. But I didn't have to pay a utility bill to Bre-X or these guys, or bank with them.

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Why did so many business journalists wind up hyping the bubble? There are both innocent and not-so-innocent reasons. Many reporters, editors, and even a few media moguls were sincerely caught up in the same irrational exuberance that affected even Alan Greenspan in the end. Moreover, the boom did produce compelling yarns about flashy dot-com millionaires on the make and imminent technological wonders. And many business reporters simply didn't know what they didn't know about business. The old hands came up in an era when business journalism was a backwater where the best and brightest rarely ventured. And many journalists who poured into the field during the boom were lured more by inflated salaries than any deep curiosity about how business works. As media columnist Michael Wolff wrote at the peak of the boom in March 2000: "Not only is every self-respecting ambitious journalist becoming a business journalist, but the great sucking sound is the sound of people being pulled away from newsrooms everywhere by the persistence of business-press headhunters and the doubling and tripling of general-news salaries."

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