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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

CCP releases two jailed Canadians after Huawei CFO deal with DOJ

Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty Images

Two Canadians imprisoned by the Chinese government for over 1,000 days have been released and are expected to arrive in Canada on Saturday, Prime Minister Justin Trudeau said Friday.

Why it matters: Their release comes hours after Huawei Technologies CFO Meng Wanzhou reached a deal with the U.S. Department of Justice that resolves the criminal charges against her and could pave the way for her to return to China.

Updated 8 hours ago - Politics & Policy

Arizona GOP's private recount of 2020 election confirms Biden's win

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In an odd coda to the 2020 election, private contractors conducting a GOP-commissioned recount in Arizona confirmed President Biden’s win in Maricopa County.

Why it matters: The unofficial, party-driven recount has been heavily covered on cable news as part of former President Trump's continued effort to sow doubt about the election result.

Del Rio bridge camp empty following Haitian migrant surge

A boy bathes himself in a jug of water inside a migrant camp at the U.S.-Mexico border on Sept. 21 in Del Rio, Texas. Photo: John Moore/Getty Images

The last migrants camping under the Del Rio International Bridge, which connects Texas and Mexico, departed on Friday, Homeland Security Secretary Alejandro Mayorkas announced during a White House press briefing.

Driving the news: Thousands of migrants, mostly from Haiti, had arrived to the makeshift camp after crossing the southern border seeking asylum. Roughly 1,800 migrants will now head to U.S. Customs and Border Protection processing centers.