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I believe that what is happening with Enron, WorldCom and their ilk, is the last gasp of the New Economy Scam.

As ye sow, so shall ye reap. The New Economy Scam was built by an unholy cabal of promoters, investment banker/analysts, and willing accomplices ( investors ). That, and a lot of hype. Substance, in the form of assets, earnings, profits and cash flow were not important; in fact, were laughed at as being old fashioned. If you did not understand that a Stanford dropout, $5,000 and a clever idea were worth $1.5 billion in a properly promoted IPO, you were clearly washed up.

It was not just a lack of interest that we witnessed, but a disdain for making money the old fashioned way of earning it. It was now hip to sell your smoke and mirrors to the suckers for a small fortune. In this Brave New Economy, nobody who was anybody would actually make anything, they would just dream and promote the Next New Thing.

The unreal became real. Dreams became substance. We began to manufacture reality. The revolution became very easy to promote, because no one wanted to be considered an old fogey, incapable of changing with the times. What greater disgrace is there for a businessman or investor than to be viewed as too tired and blind to charge into this Brave New World of possibilities? And anyone who spoke against this new order was just jealous or out-of-date, and probably losing money. Ridicule would silence them.

So, what happens when the greatest fool has invested his father's last dime, and this fake New Economy can no longer support itself? Having been seduced by their own lust for power, privilege and prestige, do we really believe that the Lords of the New Economy will easily admit to their failure, and honestly fade quietly into the night?

The desperate attempts by the Enrons and WorldComs to keep their plates spinning by resorting to criminal conduct is dependently arisen. They are just doing more of the same type of thing that got them here. Many of these companies were not real, in the sense that their intention was to make money through sound operations. Instead, they were organized around financial and accounting manipulations.

Every time a pyramid scheme is exposed, there is always that one last, desperate investor, who denies the reality of what has happened. As the confidence man is being escorted to jail, this sad individual will be at the back of the crowd, insisting that if the authorities would have let the con man operate for just a few more months, everyone would have profited.

So as the New Economy Scam is exposed for the fraud it is, the confidence men get frantic. If they can hold their positions for just a few more months, the economy, or a new mania, or benevolent space aliens, or someone will save them, and everyone will profit. They need to manufacture reality just one more time. And if that means accounting fraud or financial manipulation, so be it.

We, not you and I maybe, but WE, brought this on ourselves. We rewarded the pyramid builders. We celebrated the IPO's. We purchased the internet mutual funds.

WorldCom capitalized $4 billion of repairs and maintenance to keep its power addiction going. An individual investor maxes out his last credit card to buy more of the latest hot IPO. At some unhappy level, it is all the same thing.
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