THE TECH SLUMP: Slowing Growth, Not Negative Growth, Is What's in Store -- But That's Bad Enough.Business Editors/Technology Writers NEW YORK--(BUSINESS WIRE)--Dec. 8, 2000 Not even an imminent end to the presidential fight, a strong hint from Federal Reserve Chairman Alan Greenspan Alan Greenspan Dr. Greenspan is Chairman of the Board of Governors of the Federal Reserve System. Dr. Greenspan also serves as Chairman of the Federal Open Market Committee (FOMC), the Fed's principal monetary policymaking body. that he is close to lowering interest rates, and the consequent 10% rise in the Nasdaq on Dec. 5 can banish the awful truth about tech spending: Instead of big across the board hikes, a trend that has been going on for years now, countless numbers of corporate IT officers are scrutinizing every penny they spend like never and before and some are even talking about cutbacks in total tech spending. Clearly, tech spending, may no longer be the magical elixir elixir /elix·ir/ (e-lik´ser) a clear, sweetened, alcohol-containing, usually hydroalcoholic liquid containing flavoring substances and sometimes active medicinal ingredients. e·lix·ir n. that helped supercharge su·per·charge tr.v. su·per·charged, su·per·charg·ing, su·per·charg·es 1. To increase the power of (an engine, for example), as by fitting with a supercharger. 2. the economy for a record 37 straight quarters. Now, some analysts are even raising the specter of the wrenching tech slumps of 1990 and 1985, which sank the industry into deep recessions. No one yet knows for sure how far tech will fall -- or how much it will drag down the rest of the economy. If Greenspan moves to lower interest rates, that could free up billions of dollars in capital that had been sidelined, easing the credit squeeze credit squeeze Restricted bank lending that is accompanied by rising short-term interest rates and a decline in economic growth. Credit squeezes are generally attributed to policy actions of the Federal Reserve. in key tech sectors such as telecommunications. But for now the underlying problem persists: the great pools of money that fueled the tech buying binge -- the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. market, the debt market and corporate earnings -- are starting to dry up. If you have questions or comments regarding this transmission, please call GCN GCN Government Computer News GCN Gamecube Nintendo (gaming) GCN GIG (Global Information Grid) Computing Nodes GCN GRB Coordinates Network GCN Gospel Communications Network Publishing at 516/767-3325. |
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