That's why Wall Street is so jittery about the new economy and why the fluctuations in the marketplace have become so dramatic. People who work on Wall Street understand that Internet technology will transform the global economy. They understand that genomics will fundamentally change entire categories of business. And they understand that the entire financial system is perched precariously on the tip of an iceberg of debt.
It's not the fundamentals that are problematic. Yahoo! is probably worth about 10 times as much as Gannett. And PE Corp.'s value is probably 50 times that of American Home Products Corp. The problem is leverage, which is why it seems likely that the Federal Reserve will continue to raise interest rates, one-quarter point at a time. Because that's the surest way to drive down margin debt without causing panic.
John Ellis (jellis@fastcompany.com) is a writer and consultant based in New York City.
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