There is something poetic in the birth today of a company called the 451.com - a business-to-business internet resource for those interested in the way the convergence of technology adds up to a new industrial revolution.
The name is derived from Ray Bradbury's 1953 classic, Fahrenheit 451, a peek forward into a world where books are burned by order of the special police. The company of the book, so to speak, is playing at a screen near you just as the markets have hit that temperature where paper wealth spontaneously combusts. Just before last night's close in New York, the Nasdaq composite index was showing a 27% fall from its high three weeks ago.
Our own, new-fangled Techmark 100 is down 35% across a shorter period, while in Paris and Frankfurt those hipper-than-thou indicators Le Nouveau Marché and the Neuer Markt have fallen by 40% and 32%, respectively.
It might have taken two or three weeks, but in raw (and old fashioned) stock market terms this is not a correction, it is a "crash." Huge amounts of wealth have been destroyed.
Yet yesterday's events were not being discussed in seismic terms. Instead, there were simple, matter of fact references to rockets and sticks and the inevitability that the super-thick layer of froth which had built up on a surprisingly small number of quoted companies over the past five months would be blown away at some stage.
Things had become just too silly, reality has begun to encroach once more, and lots and lots of individual speculators who have been playing the markets on borrowed money will be looking like chumps over the coming days.
Over the past five months, hundreds of thousands of ordinary Britons have been gripped by a child-like fascination with the stock market, kidding themselves they were somehow sophisticated "momentum investors", buying shares simply because they were going up. Now many will find that while it is easy to buy shares in small, illiquid companies when prices are rising, it is all but impossible to sell them when prices are falling.
So is the new economy yesterday's stuff? No. In fact, now is probably the time at least to consider laying a bet on the opposite being the case. The divergence in the real economy between those companies which apply technology to increase their productivity and those that just hope the so-called internet bubble has burst will continue to grow.
Cause to pause
On the face of it, the febrile state of the world's post-Microsoft stock markets makes life even more complicated for the Bank of England's monetary policy committee as it starts its two-day monthly meeting today. This was always going to be a tough call - perhaps the toughest decision the MPC has had in its brief life - and financial turmoil merely adds to the mass of conflicting signals.
The reality is, however, that the events of the past two days have made a rate rise in the UK slightly less probable and might just have tipped the balance in favour of no change this month. It is far too early, of course, to say that dot.com has turned into dot.bomb, but the Bank will probably want the dust to settle before it takes actions it might regret later. That would certainly be the wisest course of action.
All the signs of anxiety were there when Eddie George broke the customary pre-MPC purdah to speak to the annual meeting of the British Chambers of Commerce. Noting that the pressures on some manufacturers as a result of the strong pound were "excessive", the governor said that there was not an awful lot he and the other eight members of the MPC could do about it.
Mr George frankly admitted that were he a farmer, a steelmaker, a motor manufacturer or even a hotel owner he would be sorely tempted to be calling for lower interest rates, in the hope that the result would be a cheaper currency. However, Mr George is not an indust rialist and never has been. He is a career central banker who believes that cutting borrowing costs now would merely stoke inflationary pressure in the already over-strong domestic economy, leading to greater pain all round. House prices are rising at 15% a year, earnings growth is 5.9%, consumer demand is expanding by 4.5% a year. Mr George remembers where this all ended in 1988 and has no desire to sit through a repeat.
However, the combination of the four previous increases in interest rates and the strength of the pound means that monetary policy has already been tightened considerably since the autumn. At a time when Britain has the lowest inflation rate in Europe and BMW has just pulled the plug on Rover, the Bank may be looking for a reason to put off what would be a politically explosive decision for a month. The shenanigans on Wall Street last night suggest it need look no further.
