Market farther in the tank!

Can we go below zero? I'm beginning to think we could loose it all. Everything will be worth nothing. Some South American countries went thru this scenario a few years back, and it isn't too nice.

I think many, many, folks are so heavily in debt, that they can't get out. This debt is the security behind most investments. If the debt all becomes worthless, then all the folks savings is loaned to all the people with so much debt. If they are all bankrupt, then you have no assets, because in reality you hold their debt. Only the bank is in the middle, so you can't see the people who went bad.

So if you saved and did without all these years, and socked it away and had a nest egg, the banker loaned it all to your shoddy neighbor. The guy that has less income than you, that has the fancy car and the 600 inch flat panel TV. The guy down the street with the bigger house, he can't make his payments, so the bank can't give you your money back. The classic 1930's depression. I thought we knew better, how not to have these anymore. The regulators have all failed to inforce the rules. Congress has deregulated all the rules!

There will be a bottom here somewhere, but it may require this election to get over. The conservatives are scared to death that the liberals will win, and all hell will break loose. So they are sellers, and the liberals have no confidence because the conservatives run the government all wrong, so the markets are essentially stalled. All sellers.

We need to pick someone, so half of the folks are happy. They can be the buyers, so the unhappy folks can sell to them. Active trading usually makes the prices go up. As long as it isn't panic trading.

There will be some really big opportunities one of these days if only we have the ability and cash to buy in. If only we had bought GE, GM, or the other old stocks in the thirties. It was ten cents a share back then. Many folks burned their stocks because they perceived them to be worthless.
In those days you held your own certificates, and they were bearer.

So do you sit back and watch your entire net worth be gone? But if you cash out how can you get back in when it goes the other way? Where will you put it while you wait? Even dollar bills have a trading value against other currency, so they are not much safer. Euroes have been declining against the dollar lately, so that won't work. Gold is all over the place and way too high priced.

My son said to save it in the bank under 250K in each bank. But that requires the FDIC to remain solvent to insure that the banker doesn't loan it all away. What's to say the Government won't go bad on the FDIC insurance if we get that far down? Need another bail out!

So its all a function of perception and belief. If you trust that you will have a strong investment, it will not cause a run on the bank. Right now everyone perceives that they need to bail, so there is no end in sight.