Hmm. Great point. Put much better than I would.
So the real question is, how long till I flee to the countryside and raise turnips to live on? In other words, is this the start of the whole house of cards going down.
http://www.investopedia.com/features/crashes/crashes5.asp
From the article:
Since the stock market was believed to be a no-risk, no-brain world where everything went up, many people poured all their savings into it without learning about the system or the underlying companies. With the flood of uneducated investors, the market was ripe for some manipulation and swindling. Investment bankers, brokers, traders, and sometimes owners banded together to manipulate stock prices and get out with gains. They did this by subtly acquiring large chunks of stock between them and trading them between each other for slightly more each time. When the public noticed the progression of price on the ticker tape, everyone would buy the stock. So, the market manipulators would then sell off their overpriced shares for a healthy profit. On and on the cycle went as uneducated investors turned a profit by selling the manipulated, over-priced shares to someone who wanted to have a rising stock.
Behavioral finance shows that the less an investor knows, the easier it is for him or her to be swept up in popular opinion (herd mentality). This behavior is a double-edged sword because the ignorant investors are also easily spooked into panic. Both actions, joining and fleeing, have very little basis in the quality of the news or the quality of the market. Instead, the herd follows the cow that runs the fastest, trampling the market.
During the craze before the Great Depression a number of academics, including Roger Babson, were predicting a crash if things didn't “calm the hell down.” Sadly, for every Roger Babson, there were four bull-blinded academics guaranteeing the eternal rapid growth of the American stock market. Although Babson had been predicting the crash for years, the capricious and ignorant investors finally listened. The twelve-year worldwide depression came and ended only with the declaration of war. This stands as the worst financial blow to the USA ever. The crash itself, though large in its own right, was nothing compared to the ensuing graveyard market and devastating depression.
Does the synopsis that I posted about the Great Depression ring a bell for our current issues?
I think that it's more like a gong.