OK,I admit I dont know much about econ - I thought "market correction" was a good, or at least

[Kashka-Kat]

a not-unexpected thing?

So its back to what it was in 1997?

Sure,I see some personal tragedy in this for many individuals but is it really the end of the world as we know it disaster that they make it out to be?

[Warpy]

1. It depended on how you invested.

If you invested the way my dad did, on slow moving stocks that produced income, you noticed a steep drop in net worth but little to no loss of income.

If you invested in fast moving stocks and were relying on paper profit to provide your nest egg, you are feeling a very hard squeeze right now. If you're close to retirement and have been able to invest only when the kids are out of college, the past 15-20 years, you're feeling devastated.

The market was overvalued. I don't think there's any dispute there. It was pumped up by imaginary dollars generated by the casino known as derivatives trading as well as imaginary dollars that owed their existence to working people paying off their debts. The correction is a necessary one to bring P/E ratios back to historic levels.

That doesn't help people who were counting on the sale of a family home plus stock market net worth to fund a retirement. Not only are they now unable to sell the house, they are looking at a depleted stock market nest egg and the probability of working part time to supplement social security in the near future.

Whether or not this is the end of the world depends on how you invested and how old you are.

[upi402]

2. Funny isn't it? The word for a market loss is... "correction"

As in, it corrected an incorrect market level. Gee, maybe it really is common knowledge that it's a Ponzi scheme.

[Art_from_Ark]

11. So in other words...

The market ISN'T always right?

[notesdev]

3. We're only halfway through

The market still has the other half of its remaining value left to lose, and most of that will be gone within 18 months.

Take a look at the 1929-34 bear market, it took several years before the market finally bottomed out, with 89.2% loss from peak. A similar run for us would last another year and leave us with a Dow below 2000.

[Hawkowl]

5. Bingo!

This is the real danger. The wrong economic policies right now will destroy the economy. After observing Geithner and Summers incompetence (misdiagnosing the disaster as a mere liquidity trap) and continuation of Wall Street cronyism, I think we will approach the 89% declines of the Great Depression. At the very least I see us hitting a 70% loss off the highs of the DOW and Nasdaq etc. Typically, prices find support at 1/3, and 2/3 off the highs. Once a market breaks through these supports on high volume, expect further declines. Nobody knows why this holds true- it is simply empirically observed behavior. Once we plunged to half off, I think the decline down to 67% off is guaranteed. Hopefully that will be the furthest decline and we won't reach the mythic disaster of the Great Depression(s) (Great Depression used to be common!)

[barb162]

4. This is not simply a market correction; it's better termed a meltdown.

Also this meltdown is part of a severe recession that is also taking the housing, jobs and other markets with it.

[Hawkowl]

6. Meltdown is the symptom

I think you hit the nail on the head. The market isn't the economy, it is just a reflection of the real economy, i.e; employment, housing, autos, etc. that has fallen off a cliff.

[SupplySideLiberal]

7. A correction is good until it interferes with political careers. Then it's bad.

If the market is so weak that incumbents are in danger of not being re-elected, then we have a serious financial crisis and urgent steps must be taken.

[OllieLotte]

9. Uh...right.

Not to mention millions of additional unemployed. A huge (possibly insurmountable) debt being passed on to the next generation and a general decline in the standard of living.

[FlyingTiger]

10. You know what adds to that debt?

Spending trillions that we don't have to prop up businesses that no longer work.

It sucks. It's gonna suck either way. But blowing trillions of dollars on companies that need to either pretend the bubble never popped or go under isn't going to fix things.

[leftofthedial]

8. market correction was an occasional necessary evil, to reset ordinary people's investments

occasionally so they wouldn't notice the scam.

But this correction is wiping out billionaires and that can not be tolerated.