more than any of the other indexes, does the NASDAQ illustrate the true state of the US economy, and how much worse it's going to get, a free-fall through the 2002 low ?
I doubt the NASDAQ can be relied as a the sole indicator of US fiscal health and following single indicators is not to be recommended.
nasdaq can indicate true state of US economy.. it's very simple :just count the number of US based companies traded at exchange. back in 2000-02 it was >3000, now-slightly above 2000 and getting smaller every month. there is no single uptick in this number for last decade. that's why i never believe in any recovery. and never will,until i see steady rise of new,US based companies,traded at exchanges. at this pace there is will be no stocks to trade pretty soon. exchanges are dying as well..that's why we have HFT's,collocation and all that shit.they gotta sell something to make the money. but this is a different story..
or could it be that businesses with solid earnings don't believe in substantial financial gain in going public.
2000-02 is not the best reference point. there were many garbage companies back then due to dotcom craze. even by 2002 most stocks were still trading even though they lost >90% value. one also needs to look at the market cap, not just the number of companies. it is possibly (and i have no clue if it is true or not) that now we have fewer companies but with larger market capitalization on average.
as i pointed out-there is no single uptick in a decade. even if you take out 00-02-there is almost 10 more years of data. 10! let me repeat this one more time-i see less and less US companies traded at exchanges EVERY SINGLE MONTH. not one up,one down. every single month. exchanges trying to create an appearance that everything is ok, by adding more and more chineese and canadian companies so at the glance total number of issues traded will look ok.but if you dig just a bit deeper-there is whole different story. same for volume. most of it is just bots shuffling shares back and forth. shortie-few bigger not always better. in fact-it always worse. ALL great life changing inventions are created in a garage,by single individual or small start up company. bigger mean less competition,more monopolization. is it better\healthy for economy? personally-i don't think so.
i certainly agree with the innovation contribution by start-ups. you are correct that without even knowing the distributions in market caps, the low total number of companies suggests an unhealthy economic future. as somebody else said, there is also a caveat that the companies may not want to get listed for whatever reason. no idea what impact this has right now on the number of listings.
These companies going public today like linkedin, pandora and some of the rest of these social networking 2.0 internet companies and soon to be groupon, zynga, twitter and facebook, what do they offer for the future??? These are companies that manufacture absolutely nothing, all these companies are, are fluff, thats it. The hype behind facebook and whats it led up to with other companies coming to the public is just a joke.
Sarbanes-Oxley was instituted in 2002. All it does it discourage great small companies from going public. Accounting and compliance costs are ridiculous. Of course the law does nothing to stop the Chinese from dumping fraudulent companies all over our exchanges.