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What a difference a decade makes
Commentary: We can't party like it's 1999 anymore
By Todd Harrison
Last update: 12:01 a.m. EST Feb. 18, 2009Comments: 19"So you run and you run to catch up with the sun but it's sinking. Racing around to come up behind you again." -- Pink Floyd
NEW YORK (MarketWatch) -- As our economy dives deeper into recession, we should remind ourselves that the more things change, the more they stay the same.
In May 2007, I listed anecdotal evidence comparing that year with the late 1990s, and suggested financial markets were living on borrowed time. With social mood souring and the tape demonstrably lower, I wanted to revisit those vibes and add fresh perspective. See MarketWatch column.
In 1999, globalization was the justification for growth. In 2007, we saw the seeds of isolationism that paved a path toward nationalization. Today, we find ourselves at that crossroads with our destination predicated on orderly debt destruction. See MarketWatch column.
In 1999, folks traded on margin. In 2007, there was the looming, yet largely unforeseen, credit bubble. Today, the debt dynamic is front-page news as companies with clean balance sheets position themselves as winners in the new world.
In 1999, day trading was all the rage. In 2007, condo flipping was in vogue. Today, real estate bargains have begun to emerge as an unfortunate function of the foreclosure process.
In 1999, policy makers praised the new paradigm. In 2007, politicians took aim at lending practices. Today, they're grandstanding on a national stage.
In 1999, we had the Greenspan put. In 2007, there was the Bernanke helicopter. Today, the credibility of the Federal Reserve is fragile at best.
In 1999, former CNBC commentator Dan Dorfman moved markets. In 2007, CNBC's Jim Cramer was a self-proclaimed equity evangelist. Today, the point of recognition has arrived that we must take responsibility for our own financial decisions.
In 1999, corporate malfeasance percolated in select situations under a seemingly calm surface. In 2007, insider trading shouldered much of the blame. Today, the entire financial industry is widely viewed as being evil.
In 1999, we had venture capitalists. In 2007, we had private equity. Today, anyone with an ability to add capacity into this downturn is in a position to prosper.
In 1999, we rationalized dot-com valuations. In 2007, we were unconcerned with debt levels. Today, we understand that a stable foundation is a necessary precursor for growth.
In 1999, Nobel Prize winners could do no wrong. In 2007, Goldman Sachs (GS:Goldman Sachs Group Inc
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4:00pm 02/17/2009

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GS 85.71, -10.74, -11.1%) pedigrees were viewed the same. Today, the notion of trust is considered the single greatest commodity.
In 1999, there was a scramble into index funds. In 2007, there was a race to chase hedge funds. Today, capital preservation and debt reduction are prevalent investment themes.
In 1999, the Federal Open Market Committee was walking a tightrope. In 2007, we wrote that the members were fitting themselves for a noose. Today, with interest rates near zero, they're inventing new approaches in an attempt to stimulate the economy.
In 1999, Julian Robertson capitulated on his short bets. In 2007, Richard Russell did the same. Today, any hint at a constructive market stance is widely considered foolish.
In 1999, we had a finance-based economy. In 2007, we had a finance-dependent economy. Today, we have a financial revolution.
In 1999, Gordon Gekko was a fictional icon. In 2007, it appeared he might make his return as a hedge-fund manager. Today, we realize that the more sage character from "Wall Street," Lou Mannheim, was right all along.
In 1999, there was the fear of missing further upside. In 2007, we said the same dynamic existed and, despite an all-too-familiar script, the thread between decades was a profound sense of entitlement.
Today, the fear of losing -- investments, homes, our freedom -- has edged to the forefront of mainstream psychology. It shouldn't take something bad to make us realize we had it good. While unfortunate, it is a necessary precursor to greener pastures that will allow us to better appreciate them when they arrive.
It's never been written -- not here, not anywhere -- that indulgence is due for simply showing up. Profiting is a privilege, not a right, and the quest for reward never should arrive without an acknowledgment of risk.
As someone who has lived on both sides of the societal chasm, I can relate to the luxury of deep pockets and empathize with those forced to make choices. See Minyanville column.
Ironically, both ends of that spectrum seemingly share a common characteristic. In order to get through this, we needed to go through this.
In a perverse way, we'll benefit from going through it together.