The CCs took a nice little plunge. We all know that at some point, people really have to look at what they are buying, and why they are buying it. No hot dog stand is worth $450k. No net stock is worth 550x future earnings.
Here is the picture.
Joe "expert at the market since 1999" Consumer comes home to his new 400k house in his new Lexus SUV. His wife, adorning the new diamond tennis bracelet announces that that their 3 year old son was voted most above average at their private daycare. They sit down to some crab legs for dinner, and mull over the bills a bit.
AMEX has 4k from their trip to Europe, 9k from the new deck they put on the house, 3k for the gardner and the new plants. Visa has 30k from the furniture. MC has 10k in cash advances for the down payment, which also cleaned out most of their savings.
"My portfolio looked great today honey," says proud Joe. "AOL is up 100% this month, we have a 350% gain in Yahoo, and our broadcast.com stock is really taking off!"
"Wonderful! I get a little nervous from time to time about our credit card debt, and we have just enough money to pay bills with your salary. We need that extra from the stock market," says Sally Slightwit.
"That's fine, I still want to keep sending $300 a month into the stock market though, it looks like we will be able to retire by the time we are 38."
The next day rolls around, and the usual smiling faces on CNBC arn't grinning ear to ear that morning. Sally looks with a confused look at Joe and asks, "Joe, what does lock limit down mean?" |
