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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (83979)	10/6/2000 7:57:18 AM
From: BSGrinder	Read Replies (1) \| Respond to of 132070

Cramer finally gets it; he couldn't see it coming, but he describes its happening: The Dot.com Denouement by James J. Cramer 10/6/2000 7:04 ET Eerie day, wasn't it? Really kind of creepy. The priceline.com (PCLN:Nasdaq - news - boards) thing. The drop in the incubator stocks. The crumbling of the remaining Net piers away from the Big Two. As the carnage raged, I kept thinking about purchasing power and options. All of those people who switched jobs in order to go to Net companies who bought stuff, presumably on margin because their net worth was in stock, who are now sitting on a huge and unpayable chunk of loans. Most of the people who quit their real jobs for the dot-com world in the last couple of years took stock or options. Some of the older companies that started before the stock market boom and bust had to lure people with decent salaries, but most didn't. They looked like they had a giant bank account. But they only had stock. But they borrowed against it, knowing that, one day, they could sell it. And if you remember the environment, you thought you were going to get more for it the longer you waited. How many homes and apartments were paid for with this phantom, now-invisible, wealth? How many beach houses and boats and fancy art collections and expensive mortgages got taken down? Massively deflationary. That's what this is. Massively deflationary. Don't get me wrong. I know that not everyone spent beyond her means or took down some million-dollar apartment that she must now sell -- and sell she should, because she probably could still recoup the money. I don't think that the problem was more widespread than the coasts, particularly the New York and California areas. However, to not believe that it is going to play a role in the shrinking of consumer spending, and, ultimately, something akin to a recession, is being way to optimistic. This dot-com denouement is just crushing wealth. Annihilating it. Vanishing it. Vaporizing it. At a speed that is more breathtaking than it was created. And it's just beginning.