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Illustration: Rebecca Zisser/Axios

While the rest of the U.S. economy reeled from devastating losses in 2008-9, the tech sector looked on sympathetically while wondering to itself, "Are things really that bad?"

The big picture: That's partly because the tech industry was well insulated from the financial meltdown's real-estate-focused epicenter. And Silicon Valley had already experienced its own financial bust at the start of the decade, leaving the industry with more solid growth and less hot air.

For tech, the 2001-2 recession — considered mild in most of the nation — was epic, scarring.

  • After the dotcom bubble popped, the tech-heavy NASDAQ index lost 3/4 of its value between March 2000 and Dec. 2002.
  • A generation of software developers and designers got to know what it's like to be laid off. San Francisco's South of Market neighborhood — today, a hive of startups and chic luncheries — became a ghost town.
  • If the NASDAQ today experienced a drop like it did in 2000-2002 and the index lost 3/4 of its value, it would fall to 2000, squashing today's cushy portfolios, beheading unicorns and destroying trillion-dollar valuations.

The industry experienced only limited recovery during the mid-2000s, took a brief dive again during the 2008 crisis, and then jumped on a bull for a decade, rising from its spring 2009 low near 1300 to around 8000 today (that's a 600% return).

Modern tech has always been a cyclical industry, but its boom-bust pendulum has been stuck on the side of growth for a full decade now:

  • Cash has flooded in as investors around the world looked for higher returns during a long era of near-zero interest rates set by central banks trying to stoke a broader recovery.
  • Technology investments from previous eras — in everything from fiber backbones to wireless broadband to more versatile software development tools — delivered big payoffs.
  • Innovations in machine learning and AI, device miniaturization, cryptocurrency, and autonomous vehicles held out one promise after another of uninterrupted growth.

The bottom line: Tech is hardly immune from future downturns, and any number of disasters — from a full-on trade war with China to a massive earthquake along the San Andreas — could trigger a race to the exits.

  • A single big bust is less likely than a series of smaller pops, as enthusiastic investors and funds overplay their hands on one tech fad after another. For instance, a lot of experts think there's a bubble in scooters right now.

Go deeper

1 hour ago - Health

Boris Johnson announces month-long COVID-19 lockdown in U.K.

Prime Minsiter Boris Johnson. Photo: NurPhoto / Getty Images

A new national lockdown will be imposed in the U.K., Prime Minister Boris Johnson announced Saturday, as the number of COVID-19 cases in the country topped 1 million.

Details: Starting Thursday, people in England must stay at home, and bars and restaurants will close, except for takeout and deliveries. All non-essential retail will also be shuttered. Different households will be banned from mixing indoors. International travel, unless for business purposes, will be banned. The new measures will last through at least December 2.

Updated 2 hours ago - Politics & Policy

The massive early vote

Illustration: Sarah Grillo/Axios

Early voting in the 2020 election across the U.S. on Saturday had already reached 65.5% of 2016's total turnout, according to state data compiled by the U.S. Elections Project.

Why it matters: The coronavirus pandemic and its resultant social-distancing measures prompted a massive uptick in both mail-in ballots and early voting nationwide, setting up an unprecedented and potentially tumultuous count in the hours and days after the polls close on Nov. 3.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Ipsos poll: COVID trick-or-treat.
  2. World: Greece tightens coronavirus restrictions as Europe cases spike — Austria reimposes coronavirus lockdowns amid surge of infections
  3. Economy: Conference Board predicts economy won’t fully recover until late 2021.
  4. Technology: Fully at-home rapid COVID test to move forward.
  5. States: New York rolls out new testing requirements for visitors.