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Ron Insana: 15-Year Delay Between NASDAQ Hitting 5,000 Again Is 'Appropriate'

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Times have changed drastically since the NASDAQ Composite (INDEXNASDAQ: .IXIC) last touched the 5,000 figure. CNBC contributor and Marketfy Maven Ron Insana was recently seen discussing how, when seen in historical context, the time taken by NASDAQ to reach 5,000 again is “appropriate.”

The 15-Year Period

“If you have a bubble and a bust and if you go back to, let's say 1929, the DOW hit 381 in September of 1929, it went to 41 by July of 1932 – that was down 90 percent – it took 25 years for DOW to go from 381 back to 381,” Insana said.

“So, this 15 years after what was a true mania for Internet stocks, the Dot-com bubble was like nothing we have seen really since the radio mania of the 1920s. It's probably appropriate that we went through this period and a lot has happened since then.”

Not The Time For Fed' Aggressiveness

When Insana was asked if he sees the Federal Reserve getting as aggressive in raising rates as it was in the year 2000, he replied, “Alan Greenspan laid the groundwork for tighter monetary policy in 1996 when he used the ‘irrational exuberance' phrase, and then it was a couple of years before the Fed started tightening, and there was a pause in the process because of Russia's debt default, the devaluation and the collapse of Long-Term Capital.

“The Fed subsequently eased and then as things heated up, they started raising rates into the year 2000, and they were also – by the way – at the same time providing $50 billion in actual cash to offset the expected impact of Y2K. A lot of people forget about that stuff,” Insana concluded.

Posted-In: Alan Greenspan dot-com bubble Federal Reserve Marketfy Marketfy MavenCNBC Federal Reserve Media


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