I was surprised to read in the Times of London Online that the Nasdaq 2000-2002 stock market bubble burst was the second worst in history of the world for the industralized countries.

When all the dust settled the Nasdaq was down 89%. The worse was the 1929-1932 depression crash in America which brought the stock market down 92%. I felt the pain of the Nasdaq crash since I was very heavily leveraged. But even if you were not, losing 89% is no laughing matter. At least if you were leveraged the brokers forced you to sell way before the stocks tanked. For once a leverage investor, came out ahead of a non-leveraged investor. For example, I was forced to sell Lucent at 33 bucks and then again at 23 bucks. I was upset until I find out a few months later that those who were not forced to sell were still holding LUCENT at 50 cents. Who says margin does not pay...lol!!!

The USA had 7 of the worse stock market crashes in industralized world history.

Japan had one, Hong Kong had one and England has one for a total of 10. The Japanese crash was the longest lasting from 1990 to 2003. I think when the dust settled they were down 79%. Their real estate market was so inflated that it crashed alongside its stock market making the situation doubly miserable. Now they are undergoing a second crash similar to the one we are undergoing.

This current USA Stock Market crash has not made the top ten list yet, but another 10-20% down and it will make the top 10 list.

Anyone have a guess where the bottom will be???

One analyst on CNBC stated it would bottom at Dow 5000. If that happens I would be fried again and would start saving under my mattress like in the Stone Age!

I am going to go out on a limb and state the Dow will not dip below 7000. That is half the value of a year ago and should be enough of a blood bath for investors. Anyway, I could survive Dow 7000 but not Dow 5000. The latter would most probably wipe out all my stock investments since I have some leverage or margin.

I am over 75% in cash and real estate. So I will be around to blog a little longer if Dow dips to 5000.

I am afraid to buy more stocks at these great prices. Yes, I am! It is like walking in a high rise with no floors below you to break the fall. You just don't know how many floors you will fall. It is a lot worse than catching a falling knife!

Jack,

Your welcome!

I don't see 14,000 either for at least 5 years...maybe never. The Nasdaq never returned to 5000 and we are approaching 9 years. It is about one third of what it use to be.

I see the Dow trading between 7.5k to about 10.5 for the next few years. I will be buying at 7.8k or below as I did recently and selling over 10k. I don't have the patience of Warren Buffet either. I am surprised he has patience since he is approaching 80 years old. Maybe he plans on taking his personal stocks that he did not donate to charity with him to Heaven to see what happens.

I like to buy at recent lows and sell at recent highs. Sometimes my trading has a 2 week horizon, sometimes a 2 month horizon and sometimes it can reach a year.

Holding does not work for me. People that held the last 10 years got screwed royally. I learned my lesson about holding in the dot.com bubble. It was a lesson well learned.

I use to fall in love with my stocks when I was a rookie...and never sell. Now I hate all my stocks and only buy them to sell for a higher price. It works much better if you have no affection for your stocks.

I did not get screwed this time around.

Fool me once shame on you. Fool me twice shame on me!

There was no fooling me twice this time around...lol!!!

I think the Asians will eventually overtake the US Market as you stated. In reality they are way ahead of us. We import much more than we export to the Asians. Almost everything sold in Wal-Mart is made in Asia even though a couple of decades ago they promised they would only sell American produced products....lol....they went with the money and dumped the patriotism as soon as they could!!!

If the dollar continues to decline against world currencies, labor will become cheap in America as it was once cheap in China. There could be a reversal of fortunes one day with American exporting to China and Asia as the dollar continues to devalue. At least all the jobs that were exported may return due to cheaper USA labor.

But in truth, no one has a clue what will happen in 10 years. We can only guess!

Another Anonymous, thank you. I happen to be a big believer in the economist Nouriel Roubini at RGEMonitor. Watch a video of him giving a talk; he's amazing. So Buffett can be picking up stocks on the cheap right now, but I doubt the market will move upwards much the next two or more years. When will it even hit 14,000 again? Buffett believes patience is a virtue and I can see why he is picking certain stocks right now. They're cheap! He can wait it out and so can his investors. I think the US stock market will be overtaken by the Asian markets eventually.

Jack,

If you are saying we are heading for fool's rallies, than you are saying Warren Buffet is a fool since he put his 300 million of personal money in American Stock last week. (See New York Times opinion on Friday)

I think he made the right decison and I joined him. The stock market is 6 months ahead of Main Street. All the negative news is factored in even though we have tough times ahead on Main Street.

By the time the negative news is all over, it will be too late to invest in the stock market, unless you are a fool like those who bought when the Dow was over 14,000 and rallying daily.

I sold all my stock when the Dow was over 14k except for Walgreens. I made a mistake and should have sold Walgreens as it lost over half its value. Live and learn!!!

I believe we will retest the DOW 911 lows of about 7600. After that all non-corrupt USA oompanies with low debt will take off. Heavily leveraged corrupt companies may follow Lehman Brothers to the grave. Good riddens to them! It is nice to have a shake-out once in a while and clean the stock market from the corrupt elements.

I still like Walgreens especially at it current price of 23 bucks. It has little debt and a PE ratio of about 10 despite a huge growth forecast for the future. Walgreen's was the baby that was accidentally drained with the bath water!

It recently fired it CEO and suffered a 3 dollar loss. As soon as it hires a new qualified CEO it will have a 3 dollar rebound in its price. I recommed buy Walgreens and have bought more at these low levels!

Other stocks I like besides Walgrees are Agree Realty, Buffalo Wild Wings, Best Buy, Harley Davidson, Kohl's, Nokia, Nordstrom, Pfizer, Target, and the QQQQ's which is a basket for the top 100 Nasdaq stocks. Indidvidual tech stocks are simply too risky. One tech company can annihilate another. Google really annihilted Yahoo to smithereens! Be careful!

All of the above stocks pay nice DIVIDENDS except Kohl's. But Kohl's has violent upward upticks quite frequently that can make one rich. I have personally made tons of moey trading Kohl's. It is a great stock for trading.

Unlike Warren Buffet, I no longer believe stocks should be held forever as in the 20 century. All the indexes have lost money in the 21st century. No one really made money. Most of those who tell you they made money in the market the last 9 years are lying. Even the hedge funds could not make any money and are collapsing.

Most mutual fund managers underperform the indexes while charging you all kinds of fees and commissions for their UNDERPERFORMANCE. Stay away from mutual funds. You also can not realize your capital losses against your capitals gains properly as you can when you invest individually.

It is very easy to invest individually. Just call E*Trade and they can set you up in a day or two. You can buy or sell for 5 bucks per transaction up to 5000 shares all day long. If you like trading using limits as I do, it will cost you 10 bucks per transaction. I use them and I would recommend using limits as you can pre-program your computer the night before and go to work the next day.

JACK,

Both McCain and Obama tell lies. They equally lie!

I am not sure you can call them liars which may be libelous, but for sure you can say they both lie to promote their unachievable agendas.

To a great extent most politicians LIE! There are some exceptions!

Big business never will self-regulate itself. It never has and it never will. Without regulation, capitalism is a "jungle." That's what we have had the last ten years or so. The SEC was gutted and securities law was watered down and now people say, where's the SEC? Hahaha, what a total joke. We let Congress and the administration gut the SEC. When the party was on, no one seemed to care that the SEC was gutted and that there was no transparency. There has to be strong watchdogs, law and enforcement. Will we learn that lesson this time? No. The SEC and other agencies will probably be strengthened for a short time and then business lobbyists will pay off the administration and Congress to water down the laws again.

Since we all know Illinois is going to go BIGTIME for Obama, I find my vote doesn't count one way or another. I'll probably vote for Nader as a protest to the two major corrupt parties. Nader is the only person who was all along saying we needed regulation, that the whole system is corrupt and rotten to the core and needed to be cleaned up. That's why the two major party candidates never wanted Nader on the stage with them and the two parties worked with the election commission to keep Nader out. It's also why the two major parties got the independent League of Women Voters out from running the debates.

By the way, I bet unemployment will go up to 10% from the current 6% and the bailouts of the banks will probably be doubled from 250 to 500 billion. The situation will get far worse than people are experiencing right now. House prices will plummet further too as a lot of prime rate adjustable mortgages have yet to be foreclosed. Plus the credit crunch, etc. This is going to be a long, protracted severe recession with a few fool's rallies like earlier this week, but the major trend of the market will be down and it will stay down for many, many months despite government intervention. Paulson is in over his head. McCain is also in over his head. Obama is just a a straight out liar making promises he knows he can't keep. When the US becomes a banana republic, watch Americans standing around saying how did it get to this.

Not really.

Since the budget is set by Congress, it takes a change to Congress to really affect economic policy.

All the President can do is veto what Congress approves.

What are the underlying problems? If I have missed any feel free to chime in.

*Clinton and Rubin change rules to allow food stamps etc. as a source of income for home loan qualification along with zero percent down.

*Bush leaves this policy in place and appears to support it.

*Fannie and Feddi move into sub-prime (borrowers with a high probability of default).

*Acorn pickets the houses of Bank Managers and harasses them in their homes so that they will make high risk loans to people likely to default.

*Federal Government subsidizes Acorn and probably other groups pushing for insane risk loans.

*Fannie and Freddi sell loans to Wall Street that are advertised as having the Federal Stamp of approval.

*Wall Street bundles the loans and sells them to investors including foreign banks that are looking for high rates of return AKA high risk, but wait the US Govt is behind the loans.

*Republicans and Democrats responsible for overseeing the Banking systems either sleepwalk or close their eyes to the developing problems. In the Case of Barney it is social justice on the move. In the case of Sen. Dodd it appears to be bribes from Countrywide, maybe others.

Can one man/woman make a difference? YES!

Clinton started the mess with Rubin, Bush kept the problem growing by not changing the rules back or putting the screws to Congress to stop the monster while there was time. Two presidents created the problem.

Both of them acted out of political correctness (do they teach this stuff at Yale?) in PC politics.

I believe Obama is sincere in his desire to redistribute the wealth from those from those who earn it, to those who vote for him. "We need bold persistent experimentation" like what? Wealth confiscation and redistribution?

Small business is the backbone of the Republican Party; Obama means to punish them even if it drives the economy into the dirt.

I’m hoping McCain is simply pandering to the undecided and won’t march the country off the cliff of Socialism once elected.

Jack,

The violent V shaped uptick I predicted Moday on this blog site before the market opened did actually happen. The markety was up 932 points which created the temporary V. It was the largest point gain in Dow History. My prediction was right.

However, I do agree with you that now we got my V, we will soon go from this V to your L shaped Japanese style recession or depression and it will be a long time before we recover.

We have never recoved from the Nasdaq bust of the turn of the century. The Nasdaq was 5000 before it burst...now it is hovering around 1700 almost 7 years later.

I think the Dow and S @ P 500 will follow suit. I don't see the Dow returning to 14k for another decade. We are living in a different world. All those poor people who invest in the stock market to retire comfortably for the most part have lost tons of money in the last 10 years. No one I know truly made money in the 10 years ending Oct. 10, 2008 when everything his rock bottom unless you were in FDIC insured money at a bank making 4.25% or the going rate.

I agree with you that the Democrats and Republicans are worse than each other. They are all phony! They are drunken sailors.

Barak Obama is a phony. He was very pro-Palestinian throughout his activist days in Chicago. Not a terrorist but a justified supporter of the oppressed and occupied Palestinians. Fighting for their rights! He was well known amongst the Arab Community in Chicagoland. I personally heard him condemn and blast Israel as a racist state in one of his speeches as an activist. I wish I would have videotaped it but at the time he was not well known and no one could predict he would rise like a star that could one day be held accountable!

The minute he decided to run for President, he was advised you could never be President of this great country unless you are pro-Israel. He turned on a dime and became pro-Israeli supporting the racist and zionist policies of that corrupt country....it is simply another South Africa ready to crumble one day!

Anyway, I will be spending election day in downtown Chicago at work. I will not be wasting my energy voting for any party or any phony politician. I will not be taking an earlier train home...not worth it!

Senator McCain on the other hand seems as dumb as they come. When a lady accused Obama of being an "Arab," instead of saying there is nothing wrong with being an Arab-American, he simply told her he was not an "Arab" but a family man. He showed he is a racist who considers Arab-Americans less than respectable humans. He is naive to believe the actions of a few bad Arabs, constitutes and defines the identity of 400,000,000 Arabs in 18 countries from Morroco to the Persian Gulf....plus 7 million Arab Americans a third of whom are Christian.

Politics is sickening and time consuming. It is always about the ego of the politicians and not their contituents. I have never met a politician who did not have a big ego. They run for office to satisfy their ego of power...for the money the job provides...for the great pension and health benefits. They don't run because they care about us. Don't kid yourself!

If Obama cared about the poor, he would not be spending 90 million dollars on advertising per month. He would give it to the poor. The guy raised hundreds of millions of dollars and is wasting it on commercials despite getting massive free publicity.

Only in America, would presidential candidates waste a BILLION dollars on campaigning. What kind of country is this? No wonder we are broke...lol!!!

Let Markets Rule, your post is too sensible. Our government would rather waste hundreds of billions propping up the toxic banks than closing them. We probably will have a long Japanese-style severe recession if not worse.

I'm voting third party this year. I am too sick of the Democrats and Republicans for jointly causing this mess over the years. You know that line about "no taxation without representation." I think we're seeing it in spades the last few weeks and we'll keep seeing it while these two parties are in power along with their Wall Street backers.

Another Anonymous, the way Congress and this administration is spending, like drunken sailors, I think we'll end up in an long L- shaped depression or severe recession. We can't keep going on like this. The national debt and all of this deficit spending is going toward bailing out toxic assets, for all of these mega-rich clowns who wanted all of this deregulation. But when these same clowns get hit by their own mess, they want socialist bailouts and Congress, like the fools they are, bails them out. Meanwhile, our two illustrious presidential candidates keep talking about lowering taxes and about more bailouts to the tune of hundreds of billions which we don't have. In other words, more deficit spending. It gets more insane by the day.

Host Ted,

I don't think the crisis we are in can be solved by the presidential candidates.

It needs to be solved by the people.

People have to save money and then buy a car. Buying 50,000 or 100,000 dollar cars on credit is ridiculous. If you have the cash, go ahead and buy. If you don't buy a used car you can afford with the cash you have and save for your dream car. No one should borrow money to buy a car. I will say I never borrowed a penny to buy any of my cars throughout my lifetime. It has helped me become financially stronger.

I only use my credit card for convenience. I only have ONE! It is paid automatically each month, thus I have never incurred an interest charge or penalty.

I did borrow money for my modest home but paid it off in 13 years despite having a 30 year mortgage. I did refinance twice to reduce my payments before I finally accumualted the wealth to pay it off in 2001.

Borrowing can get anyone in trouble. I once used margin to buy stocks in 2000 and 2001. I was almost wiped out! I learned my lesson and have never borrowed again.

People can really get ahead if they avoid debt. Avoid buying what they can't afford. Live in a 400k house even if they can afford a million dollar home.

Keep 75% of your savings in FDIC insured money. I have and my savings increased 50% the last 10 years in the bank.

My 25% of savings in the stock market are one fourth of what they were 10 years ago as of closing Oct 10, 2008. Of course I margined in the last crash during the turn of the century but not this crash. If I did, I would have 0 in the market instead of 25% of what I once had.

I once bought 1000 shares of Yahoo for 30 dollars a share. They split to 2000 shares. I sold them for 503 dollars a share in early 2000 and walked off with a cool MILLION. When Yahoo hit 250 dollars, I used my MILLION to buy 4000 shares. I thought they would go back to 500 and I could make a second cool MILLION.

Well they dipped to 25 bucks while I was in constant denial. I finally sold them for 100k. Yes, I made 70k, but I could have made 970k if I knew when to quit. Last time I checked Yahoo was at 11 bucks. If I would have held on a little longer, I would have broken even after 10 years. That was as depressing a roller coaster ride you can possibly take!!!

Anyway, that is how dangerous the market is! Yes, I made a little money on Yahoo but I could tell you horror stories on Lucent, Tellabs, Cisco and even Microsoft where I was almost completely wiped out due to untimely margin calls.

The stock market is corrupt. It is controlled by insiders who are largely corrupt. You have no chance to make money in the market unless you are an insider. Don't kid yourself!

I bet most people would think Walgreen's is a great investment. I bought some Walgreens. It was at a high of 48 this year and it hit a low of 22.30 on Friday. I paid 38 bucks for it thinking you can not go wrong on a 10 dollar dip on such a powerful brick and mortar stock. Well it went down 26 dollars from its recent one year high. The CEO was forced to resign a few days ago! I guess the Cinderalla Walgreen's turned out to be a Frankenstein in a Princess's clothes!

In summary, we have to do our part to save the economy and strenghten it. The candidates are both unqualified and are all talk trying to cater to those who they can BRAINWASH!

Let us hope the City of Naperville does not add fuel to the fire by increasing taxes in the coming years. They need to find a way to reduce taxes as all other taxing authorities are attempting. If Chicago can reduce taxes, Naperville should be able to reduce taxes!

Anyway, I am going to predict we will have a V shaped bounce in the stock market. It will be a violent uptick to make for this violent downtick. Fasten your seat belt for the next roller coaster ride!

This time let us call get out on the top of the V and put our money in FDIC insured banks! That way it will be there when we retire....assuming we can!!!

One of the main issues in the past ten presidential elections has been what should the value of currency be? Since none of the presidential candidates or their political party want to resolve this issue, there is no need to vote.

With a currency allowed to lose purchasing power each and every year, it becomes more difficult to maintain infrastructure, social programs, and increase capital investment in plant and equipment.

Yes, some individuals will be able to have higher standards of living in the future, except there will be fewer of them. Half of those with higher standards of living will probably be government employees.

So if you want to vote, consider voting for a third party candidate from socialist to conservative. Send a real message to over paid elected officials. Do not waste your vote on a Democrat or Republican.

Interesting issue, this is an ECONOMIC PROBLEM, not a POLITICAL PROBLEM. There are no POLITICAL solutions.

What is the real problem? Financial transparency. We know that financial institutions made bad loans and investments. Have they written them down? Are they solvent?

The market's answer to the question (on solvency)? NO. Solid banks do not want to make loans to many of them. There is PLENTY OF MONEY, the Fed recently increased the money supply by 30 to 50%. What has happened? NOTHING. Why? Because people do not trust their money with Citicorp, JP Morgan or Bank of America. Add to that RBS, Fortis, etc.

So cash is being hoarded. The latest Paulson idea? INVEST IN THESE BANKS.

When was the last time this was done? In the early 90's by the Japanese in response to their banking problem resulting from, uh, REAL ESTATE LOANS. What happened? Fifteen (15) years of economic disaster. Not just a recession, but total DEFLATION.

The government should not be propping up these banks, they should be closing them, recapitalizing them, and start over. I for one do not want 15 years of misery to bail out the banks.

Take immediate action and close down the bad banks. Then people, companies, countries, and other solvent banks will return our system back to what has made this country and the world great for the last 40 years--CAPITALISM.

And NONE OF THE ABOVE is the correct solution for the next President.

Both of the current presidential candidates are corrupted by corporation lobbyists; they couldn't run fast enough to Washington to vote for the Wall Street bailout. That's despite 300 to 1 responses to Congress being against the bailout. As Nader has said, the Constitution starts with "We the people" not "we the corporations." Both Obama anad McCain and the two main political parties are bought and owned by the corporations and have not been responsive to the will of the people. That trillion dollar bailout should have gone into the hands of the average joe who could have been given jobs on fixing the crumbling infrastructure of this country. Both parties, Congress and the executive branch are completely corrupt as all they seem to be doing is anti consumer and anti labor legislation. Do you ever hear a peep out of Congress about offshored jobs?