some may not like to hear this but

[DividedWeAre]

i think that 30-40 percent of the money made in the stock market the last few years is bubble money.. just like 30-40 percent of the money lost by Enron investors was bubble money.. just like 30-40 percent of the money made on the Internet bubble of the 1990's was bubble money. that is to say - it never really existed. if it stays around 40 percent in losses, then it will be noted as a massive correction. if it goes further (we are close), then it starts to eat into the real value and the fan gets covered in crap and all of this panic becomes justified.

[WCGreen]

1. I kind of get you...

But the money really did exist. It's the profits that they were building on the core investments that went poof...

[aquart]

2. Just don't turn the fan on.

[DividedWeAre]

8. well, that's a good point

well, that's a good point. where does the crap reside before it hits the fan and who tosses it in the first place? perhaps if we knew that, we could root out te core evil of this situation and other situations as well.

[The_Casual_Observer]

3. Well spoken. Same with housing prices.

[iiibbb]

4. The market will eventually correct. "The worst time to get off a roller coaster is when it's moving

[Incitatus]

5. In the Internet bubble some companies were trading at ridiculously high P/Es

Now there are a lot of good companies trading at low P/Es. I think a lot of companies are way oversold. Where in the Internet bubble they were way overvalued to begin with.

[garlicmilkshake]

6. Stocks are just like "fine art"...they are worth what someone is willing to pay for them,

not a cent more. A Picasso has zero intrinsic value (like diamonds which are 'valuable' only because enough people THINK they are) but it has speculative value...the hope some other sucker will pay more for it at a later date.

[BeFree]

7. Yep

And the one's who walked away a year ago and never looked back are king.

Today the only way to play is to buy food stocks.

[CoffeeCat]

9. Consumers funded these companies....

...with money that they did not have.

There is a massive bubble. Huge. Inside it is borrowed dollars that people never had.

People wildly used credit cards--and they purchased anything and everything they wanted.

People used store credit cards--pumping up retail chains, furniture stores, Target, Walmart, Home Depot,
Pier One, etc. People financed expensive cars that they couldn't afford. Hey! Why not buy a 40,000
car when you can finance it for seven years!

People used their homes like ATM machines. They didn't just borrow to add on a new room. Oh no...they
took out that money for more Pottery Barn, lavish vacations and big-screen tvs.

This country is fucked. I'm sorry for the language, but I see no way out of this--other than a massive
POP of an unsustainable bubble.

People say it won't be another Depression. This will be DIFFERENT than the Depression. Maybe worse.
Who knows. But we know that in 1929--when the bubble popped, people weren't living off of credit
cards and trying to maintain a 4,000 square-foot house and 2 $500 car payments and up to their necks
in rampant consumerism.

This is going to be a seismic event. I don't see how we avoid a complete economic catastrophe.

The party is o-VER. Welcome to the hangover.

[winga222]

10. If you're not selling or retiring soon, it's a little less scary

Don't get me wrong - I'm spooked. But I'm only 46 and work in advertising (from which no one retires - we die at our desks), so I can just sort of watch in horror but stay removed. People who are within a couple of years of "cashing out" are screwed. Daytraders and the like, I feel no sympathy for. They're just gamblers, just like all those youngsters who watched TLC and HGTV and thought "flipping houses" was their way to retire by 40. Sorry, life doesn't work like that. And shouldn't.

[MichaelHarris]

11. that means

I lost around 3000 bubble dollars today. I feel better knowing that.

[TechBear_Seattle]

12. Stocks used to be about fundamentals. Since the 80s, it has become all about speculation

People used to buy stocks as a long term investment. Return on the investment came in the form of dividends, which are a distribution of the company's profits. Nowadays, people buy stocks as a very short term investment, expecting that the perceived value will go up in a month or two and they can sell at the new price. Not only is this a very risky proposal, few companies pay dividends any more because investor demand is that stock prices be propped up; companies are forced to take their profits and try to build the company up far beyond what it can manage.