5 Bad Signs for a Dow Below 10,000

America has been the econmic blackhole of this world since the indutrial revolution began. We have bought low and sold high for a century and corporate boards of directors and union leadership councils were so focused on making more money that the increasingly competitve nature of the rest of the industrialized world went unnoticed. We have made ourselves vulnerable by our spendthrifty ways. Spending more on petroleum imports than other nations pay for all the goods we produce garaunteed this comeuppance years ago. Our oil enemies in Middle East will gleefully pull out their sharpened scimitars to slice up our fiscal corpse and laugh loudly and scornfully all the way to their mosques.

S C Scott of IL 4:21PM October 08, 2008

It appears clearly that Obama only knows how to talk about this financial crisis and the mess that will ensue from this point on; he is all talk, no substance. An actor who seems to attract the disenchanted, lesser-informed young voters under 30 yrs of age.

McCain talks about the situation and offers a more knowledgeable approach to solving this BIG mess we are in. He is the real deal when it comes to facing and soling the ongoing and upcoming fallouts of this man-made financial crisis that started from the Enron creative investment schemes with Wall Street doing the same to the packaged mortgage-backed securities (or CDO's or credit debt obligations) which were sold with credit default swaps (CDS) contracts or what mere mortals call INSURANCE whioh should have been backed by actual money reserves in case things go down (as we are experiencing now). Since the CDS contracts or INSURANCE that collateralized these packaged investments didn't have money (or 'not worth the paper they are written on) in the first place, this mess came about and reared its ugly head.

Wake up America! The deregulation is not working. Every investment must be scrutinized from its basic structure. The SEC was asleep at the wheel on this one.

We, the people, should demand that all of those executives of the firms we bailed out must cough up all their pays and bonuses for the last 6 years at the minimum. Confiscate all their acquired assets (every asset) in that same period. Let's be serious in cleaning up these charlatans once and for all. Then, let's collectively demand that investment regulations be ramped up from the old books - revised to the present digital age and beyond.

Those executives of AIG that just enjoyed a luxurious celebration at a posh hotel recently after the government bailout of their firm should be a good start for punishment. Show the people of the USA that such behavior can no longer be tolerated and must be put to a screeching halt NOW!

This financial crisis will continue until every home financed with LIAR mortgage/s is devalued to its rightful value of 60% or less of the initial price. That will take beyond 2009 until this mess stabilizes. So, the new US President, and hopefully, Mr. McCain, will have his hands full and will do the right thing to turn our economy around with all the other issues he needs to deal with - healthcare, security, global warming, energy, education, etc.

I only hope those who were victimized by this financial crisis would wake up and become wiser for the experience. They realize surely that they are parties to the transaction, and they knew what they were getting into. To us who were not party to this mess, let's remain optimistic that the correction won't take longer than the year 2010.

May this financial crisis and the resulting impact to our economic downturn reverse course sooner than 2010.

Timmy Tran of TX 3:19PM October 08, 2008

Short version - I sat in my car outside work one October day 21 years ago and listened as the DJIA dropped 20.5 percent in that single day. Since then, there have been a couple of other blips, but even these huge point drops are just that - blips - compared to 20.5 percent. It would have taken a one-day, 3000 point drop, to match it.

The government, and all of us, need to understand what my folks knew - that you only borrowed for appreciating assets, kept your expenses on-budget, and saved a bit as you went. Dad was high school class of 1932, was never wealthy, but always got by.

We've become enamoured of huge houses and flashy cars and all the latest electronic gadgets. It's recently become clear that I don't need a 4000 square foot house for my three-person household. I don't need an Escalade or a Mercedes-Benz. I'm a fairly highly compensated person, but drive a 15 year old car, and even after all the recent drops, still owe less than half of my home's value. Brilliance? Excellent planning or advice?

No. A lot of luck, and a nagging suspicion that my friends who were refinancing every year for more toys and trips - depreciating assets and current expenditures - were making mistakes.

So my 401(k) is down 30% on the year. That takes away the last couple of years gains, but over the life of the thing, I'm still earning about 10-11 percent. Unless I believe the sky is really falling, that civilization as we have known it is screeching to a halt, then I know it will come back.

When I was just into college, the DJIA was trading notably under 1000 points. In that 35 years or so, it's still up by a factor of over ten times.

Last note. What makes someone making $50,000 per year think they can afford a half-million dollar home and a new BMW 7 series? Dad knew he couldn't. We grew up in a blue collar neighborhood, and drove three year old Fords and Chevies. Get real. A house shouldn't cost more than 3.5 to 4 times your annual pay. Your mortgage payment shouldn't be over about 25 percent of your gross. Dad worked on the concept that a car was about ten percent of the value of his house - he paid $16,000 for the house I grew up in, and $1600 for the 1957 Chevy we drove.

We'll survive. Just don't give up - if you quit, you lose. Dad was an aircraft mechanic at LAX. Our old house would still sell for about 3.5 to 4 times what an aircraft mechanic and a bookkeeper (my mother) earned together. It just isn't in Rolling Hills Estates. I can still get a new car for a tenth of that, and a nice one, too.

Gary of CA 2:37PM October 08, 2008

Oil and fuel prices need to get back to reasonable levels.

Oil $30.00 a barrel

Until this happens people will not have the money to spend on anything but the very basics and job growth will be non existent.

Interest rates on savings and money markets need to increase to where its worth while to save.

Dropping interest rates only helps the stock market look better over time, the money don't come back to the investors it goes to the CEO's and the other higher ups who benefits from rediculous salaries, bonuses and shares of stocks that make them more then wealthy.

Leon of IL 1:50PM October 08, 2008