Where Oh Where is the
Stock Market Bottom?
Updated: November 17. 2008
Since the start of September
the Dow Jones stock market average has sunk 39.2%. On
November 17 alone the market tumbled over 223 points. The key here
is that no one knows where the bottom truly is. The entire global
financial system is in a terrible tailspin.
Each month the number of
real estate foreclosures increases – at an increasing rate. The
number of layoffs and the number of workers laid off keeps
increasing with many economists predicting a massive wave of new
layoffs in January following what promises to be the worst retail
holiday season in several decades.
Banks all over the world are
teetering but no one knows how much money was lost. Over a dozen
different foreign countries are now approaching bankruptcy. General
Motors, once the icon of American business success, is burning
through cash at such a pace they themselves predict they will run
out of cash sometime early next spring.
Russia is in a similar
situation as they too are running out of cash. The easy money days
fueled by ever rising oil prices are long gone. With the price of
oil down below sixty dollars a barrel, Russia suddenly finds itself
in a deep crisis. Their government may soon fail if new funding
can't be found.
You can look forward to even
more stock market volatility but you can expect the overall drift to
continue downward. Where will we finally make a bottom? As I’ve
said, 2009 will be a recession year. Perhaps early in 2010 but more
and more economists seem to be pushing their recovery predictions
back to 2011 or even further. Suze Orman the TV financial guru last
week shocked her watchers when she confidently predicted that the
next bull market wouldn't be seen until - get this - 2015!
Stock market crashes burn
investors who have long memories. It can take a generation or more
for a market to get back to serious gains. After the crash of the
market in 1929 the market didn’t markedly recover until the later
1950s.
With the average 401k now
down 42%, you can expect any stock market recovery or in a broader
sense any recovery in the economy will be anything but vigorous.
A whole new generation who
didn’t remember the crash had to be born before the new "true
believers" can once again believe that the market can only go up.
The standard of living
of the average American is about to take a tumble. Survive and thrive during the coming bad
times. Get the facts -
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