what a year

An outstanding year!

2000, of course. It was extraordinary, by any measure.

How many years can you name that start with a great hoax -- Y2K -- and end
with a monumental hoot -- the world's greatest democracy can't get the hang
of how to elect a President?

We're not the only mad conspiratorialist to divine that the Y2K scare was the
brilliant handiwork of a cabal of top computer makers intent on sparking
sales -- and what a wildly successful scheme it was.

Few, however, are privy to the knowledge that the massive snafu of election
2000 was no improbable statistical fluke but the Machiavellian contrivance of
Ross Perot exacting revenge for being denied his usual place on the ballot.
Besides, it finally occurred to Ross that he wasn't going to be President,
and that made him as mad as a plucked rooster: If he wasn't going to be
President, by gum, nobody was going to be President!

Even though election 2000 demonstrated a small defect -- an inability to pick
a winner (but remember, nothing's perfect) -- it did put to rest some nasty
aspersions that have long been cast on the workings of this blessed republic.
Most particularly, it buried once and for all the cynical notion that money
can buy the Presidency. Both parties spent hundreds of millions of dollars
trying to do just that -- and came up empty.

So let's not hear any more nonsense about the Presidency being for sale. It's
now quite clear that the Presidency can't be bought; conceivably, though, it
can be stolen.

What remains to be determined is which of the pretenders can pull off the
theft. Mr. Bush would seem to enjoy a congenital advantage, since the
governor of the state whose votes ultimately will prove decisive is his baby
brother.

On the other hand, Al Gore has the overwhelming support and counsel of the
trial lawyers. Trial lawyers, after all, make a profession of knowing how to
get away with murder. So they should find figuring out how to snatch the
Presidency mere child's play.

Not the least remarkable thing about this most remarkable year is that the
Supreme Court seemingly has abandoned its long tradition of following the
election returns in favor of helping to shape them. The good part is that
there are nine of them-seven mostly old men and two women of a certain
age-assuring a majority ruling, unless one recuses himself because he simply
can't stand Florida.

Only in America in the year 2000.

-- As you're undoubtedly and possibly painfully aware, 2000 is already
memorable in Wall Street as the year the air began to whoosh out of the
monster stock-market bubble and, after many a frustrating try, the year the
bears finally ate Goldilocks.

In fact, unless such portents as mounting claims for unemployment insurance
and the latest downbeat readings on business from the purchasing managers are
completely misleading, 2000 will go down as the beginning of the end of the
most salutary and long-lived economic boom to grace this nation (and probably
any other).

These are, admittedly, negative distinctions. But if you're a year and want
to be famous, you can't be picky: No one harks back to 1929 because it was a
great year for butterflies.

Nasdaq unarguably has turned in a once-in-a-lifetime performance this year.
Never before has a stock-market index caused as much pain in so short a time
as did Nasdaq in its breathtaking (and wealth-evaporating) 50% drop from its
March high to its close last Thursday. What's more, it has a full month to
better (worsen?) that fantastic feat.

Nor does the plunge in the index -- formidable as it is -- do full justice to
the awesome decline. A much more graphic picture is painted by the slides in
individual issues. Here, we're indebted to a sometime correspondent named
Howard Boyet, who sent us a list of 90 of the most gruesome casualties. Alas,
space -- and solicitude for those readers of an especially delicate
disposition -- prevent us from listing the entire wretched roster. But a
sampling will give you the flavor.

For instance, Foundry Networks, which peaked at 212, was last seen at around
41. Harmonic has fallen from 158 to 7-plus. Internet Capital from 212 to 6.
FreeMarkets, from 370 to 29.50 (not quite free yet, but it's getting there).
VA Linux, from 320 to 8. Red Hat, 151 to 6. Inktomi, 241 to 24. DoubleClick,
135 to 13. Akamai, 346 to 27. Next Level, 202 to 11 (we dread to contemplate
the stock's next level). MicroStrategy, 333 to 12 (might be something wrong
with the strategy). Ask Jeeves, 144 to 10 (if it's all the same, we'd rather
not ask him). And on and drearily on.

So if you own stocks like Dell Computer (60 to 18) or Gateway (81 to 19) or
Texas Instruments (100 to 37) or Oracle (46 to 26), you can take some comfort
in the knowledge that you could have owned any of the above or the likes of
Razorfish (57 to 3), Novell (44 to 6) or Covad (67 to 2).

These exercises are now commonplace, and journalistically, we suppose,
they're the equivalent of a circus freak show. But they do, as Mr. Boyet
suggests, provide a more vivid and even more accurate description of the
damage wrought.

What we've found most intriguing is that, until now, all this blood in the
Street has evoked very little public outcry. We've experienced a kind of
cruel and vast but silent mugging. Magazines like Time and Newsweek haven't
done their usual heavy-breathing treatments, nor have most newspapers,
including the New York Times, made a front-page fuss about the decline and
fall of Nasdaq. Nor are the networks running their usual inane specials.

Moreover, until quite recently, mutual-fund shareholders have placidly
watched their wealth withering. No crowds gathering in front of fund
headquarters and, more tellingly, no rush to redeem their holdings.

There are several possible explanations for this rather astonishing
diffidence on the part of the financially wounded and the absence of hysteria
in the press, both the electronic version and the genuine item. The
distraction of the election that never ends. The fact that most everyone who
wants one still has a job and a relatively high comfort level. Whatever the
cause or combination of causes, that we're in a bear market, and a vicious
one, doesn't seem to have sunk in yet.

Until it does and until fear stalks the Street and an ugly grizzly makes the
cover of Time, if you run into anyone claiming to espy a bottom, take him
firmly by the hand and guide him to the nearest ophthalmologist.

-- That chart adorning this page depicts another reason why there's lots of
room still on the downside. (See accompanying illustration -- Barron's Dec.
4, 2000) It comes to us courtesy of George Gilman, the savvy and talented
producer of the Business Picture, a wonderful quarterly compilation of charts
and info on the economy and the markets.

The last official number for the Nasdaq P/E, he reports, was 139.1 for
October, but he reckons the figure fell to somewhere around 107 by the end of
November.

As George comments: "Even after the 48.5% decline from the March 10 peak of
5048.62 to Thursday's close of 2597.93, the P/E on Nasdaq is incredibly high."

And that's the point. The multiple wouldn't be cheap at half its current
level. Nor would it shock us if, eventually, Nasdaq and its P/E fell another
50%.

-- While we're convinced we're in the early stages of a secular bear market,
we know there'll be blips in this descent just as there were dips in the late
great bull market.

In truth, we're surprised we haven't had a halfway decent rebound yet.
Certainly, we're overdue for one. Consider this a heads-up on what might
trigger a bounce (apart from a miraculous resolution to the election snarl).

Next Tuesday, Alan Greenspan is slated to deliver the keynote address to a
gathering of commmunity bankers in New York City (which is not overrun by
community banks but is a great place to visit). We haven't a clue as to what
he intends to say, and it might well be nothing intelligible.

But should Mr. G make a sly reference to the economy and monetary policy and
hint that maybe the Fed is poised to shift from tight to neutralthat just
could rouse spirits in Wall Street enough to ignite a fairly brisk -- if
relatively brief -- move up.

-- John Liscio died last week. John was our colleague at Barron's for roughly
a half-dozen years in the late 'Eighties and early 'Nineties, and not a day
went by that he didn't light up the place.

He was vibrant and funny, outrageous and irreverent, extraordinarily
intelligent. He was brash and tough and had an insatiable appetite for
mischief. Yet he was also warmly affectionate, shirt-off-his-back generous
and, oddly, possessed of a touching ingenuousness.

John had an expansive mind that ranged restlessly and relentlessly over just
about every subject known to literate and inquiring man and a few that only
his special imagination provided entry to. He was a baseball nut, a
cantankerous pitcher for and captain of Barron's softball team and a demon
participant in the Fantasy League, where grown men play at being
owner-managers of major-league teams. In fact, he was the commissioner of his
league (in which role, we can only surmise, he visited great anguish on his
fellow Fantasy Leaguers).

As a writer, John was exceptional. He brought to economics and markets a
knowledge not only of those murky subjects but also of the wide world; a
gifted and fluent pen and a sense of humor that could be -- inevitably was --
deliciously wicked. He would leap with positive glee on some unfortunate with
a tempting name. There was a chap named LaWare at the Fed, for example, whom
John inevitably and with some purpose called UnaWare. Morgan Stanley
economist Stephen Roach was rarely mentioned by John but as the proprietor of
the Roach Motel, where the facts check in but don't check out.

He was a brilliant journalist, both at Barron's and at U.S. News, and,
against all advice and odds, launched an economic newsletter, the Liscio
Report, which became a roaring success. The reason was simply that John had
more wit in one pinky and more insight in the other than any dozen economists.

John, who was spunk personified, showed unbelievable courage as he battled
his last illness. When we visited him in his hospital room and told him
joshingly he looked like hell, he grinned that indomitable grin of his and
launched into a couple of hours of dissertation on the state of the world,
excitedly detailing his plans for the future.

He was the most indomitable person we've ever met. All of us here at Barron's
and, for that matter, anyone lucky enough to have known him, will miss him
terribly.