Looking back at the bubble

Someone once told me that when historians want to research a given event, they don't read the newspapers published the next day or even the day after that. They start by reading the newspapers published about three or four days later. Same-day news usually contains inaccuracies (a convenient segue for me to apologize for last week's newsletter, in which I mistakenly called British Telecom, instead of ntl, a new World Wide Packets customer) and doesn't include the full view and perspective that comes later.

So it should be no surpise that we would not begin to truly comprehend an event with the seismic magnitude of the telecom bubble until years later. (Maybe this is why early books on the subject have been disappointing.) The bubble continues to plague us even now, as details about accounting misdeeds at Nortel Networks and Lucent Technologies continue to surface (see story below).

The best we can say about the bubble so far is that it was a time when otherwise rational people went ape-s**t insane. For example, Lucent's former head of North American sales Nina Aversano may have represented the voice of reason to some for telling her boss that sales expectations were too high. But the SEC maintains that Aversano herself gave in to those expectations under the pressure of the bubble, making improper promises to Lucent customers and misrepresenting those promises to Lucent.

With Nortel's story still unfolding, who knows how much more we have to learn about those few crazy years? The fog is only beginning to thin.