10 years lost and then some. 10 years of my original investment in a retirement account, now worth less than it was when I put it in the market after I left my job in the states. Luckily, since then I have been putting everything in a Roth IRA cd.

And the fact Republicans run around acting as though they don't have their head totally up their ass is nauseating. I hope they get their asses completely handed to them, White House and Congress.

I had a buddy of mine used to go to Rio back then, I saved my money. At this point at least he has memories.

Not to be too much of a nit-picker, but mathematically, you're not quite right.  Since the amount from which the 3% is calculated declines each day, it takes less of an absolute point-value drop to decline by 3% tomorrow than it did today.  Strictly speaking, the stock market can decline 3 percent per day forever.  Stock values would asymptotically approach zero, but never reach it ...  

blackton said:  "10 years lost and then some. 10 years of my original investment in a retirement account, now worth less than it was when I put it in the market after I left my job in the states. Luckily, since then I have been putting everything in a Roth IRA cd."

Too bad about your loses, Blackton.

You have my sympathy.

Anujdesdai, it's your kind of thinking that so cruelly and accurately exposed Mike Huckabee's FairTax as not a 23% tax, but a 31% tax. Incredibly, the proponents of FairTax refer to the 31 extra pennies in taxes per dollar (also known as "per cent") consumed as a 23% tax rate because 31/131 is 23%. Doesn't work that way.

David Brooks has interesting article about the current financial mess:

"The Behavioral Revolution"

By DAVID BROOKS

www.nytimes.com/.../28brooks.html

I got hit also though thankfully  not as bad as some other people I know.   I know some people ready to retire who really got hurt. That makes me sad.

I don't blame McCain though, I blame the libertarian economic philosophy pushed by a lot of Republicans. I too hope they all lose their seats in the coming election.

lol....well technically there isn't, as you're subtracting three PERCENT, but point taken. Eventually the only place we'll have to go is up.

Didn't Leon recently write his only law of life... that there is no such thing as rock bottom?

Brooks raises some interesting points. Some of my own research has a direct or "once-removed" impact on estimating the probabilities of natural hazards -- long-term earthquake hazard forecasting, for example. I have advised a group that has as part of its mission to educate the public about earthquake hazards, and they run into the problem that people aren't very easy to educate about the topic. On the whole, the public does not act rationally with respect to the actual risk they face. Specialists and experts get it because they understand the processes that cause the hazard, but most people don't understand those processes, nor can we expect them to. But the public as a whole tends to worry a lot about certain things and not at all about others, with little regard to the actual probability of those things happening. In part it is because people have a very poor intuitive understanding of probability. I've learned a lot from talking with the sociologist on the advisory panel, but it seems to me that there is still a lot left to learn about how people perceive risk and hazards.

Brooks is talking about economic risks, of course, but I think the perception issue is similar whether one is talking about economic risks, your city being devastated by an earthquake, or the risks of terrorism.

As for taking heart, I am dealing with the losses at the moment by not opening the statements, and taking heart that I have 20 years to wait for the market to go back up. But I really feel for people who are close to retirement or retired now. They are being forced to lock in their losses now.

jackson, thanks, but I am like Jeff Frey and I have 20 some years to come back, plus I have my health, a beautiful wife, 3 kids, etc. so I count my blessings daily. I also know that I am in pretty much the same boat as many, many other people.

I agree with Brooks, this whole credit default swapping, which was illegal 100 years ago, was brought on by this Ayn Randian b.s.

Marty is right about one thing, this won't last forever. In less than 3 years everything will turn around.

I knew Bush was right all along.  We should have done private accounts for social security.   Had we done so, a Republican would be now known as a scary costume a person wears for halloween.

Says the optimist Blackton: "Marty is right about one thing, this won't last forever. In less than 3 years everything will turn around."

Let's see -- the Dow Jones has dropped by at least 3% in a single day 13 times so far this year.  In 1929, the Dow Jones fell at least 3% on 18 different days, but it took more than three years for things to turn around.  The market had 20 such days in 1930, 33 in 1931, 49 in 1932 -- then things finally began to turn around in 1933, when there were only 25 days of 3% losses.  Happy days are here again!

"10 years lost and then some. 10 years of my original investment in a retirement account"

Didn't you lose most of your money during Clinton high tech bubble?

jacksondyer said

"I don't blame McCain though, I blame the libertarian economic philosophy pushed by a lot of Republicans."

[T]he most recent data from the Bank for International Settlements should wipe the smirk from many European faces. Western European banks lent three-quarters of a total $US4.7 trillion ($7.5trillion) to emerging markets in eastern Europe, Latin America and Asia: a bursting bubble that surpasses the US sub-prime mess. Again, in Germany alone, financial institutions lent $US21.3 billion to Icelandic banks now collapsing, accounting for more than a quarter of all foreign lending to Iceland and more than five times the level of British lending, Iceland’s next biggest creditor country.

[…]

The truth is the most awful weapons of mass financial destruction came from London and Frankfurt. Aggressive German financiers were busily inventing and packaging up derivatives that Europeans would prefer to frame as a curse of American capitalism.

www.commentarymagazine.com/.../40411

Tross since your big on pulling up historical information you may even just want to eyeball the last 50 years of the stock market.  We had a huge boom due to credit.  Credit has dried up and the market is going to stabilize somewhere in the low-middle state of the credit boom.  I agree with Tep here (To bad he appears to have split on us) that America has real businesses that produce real goods.  Many other sectors are turning profits even in this dismal market place.

It will be about 1-3 more years before the housing market is done collapsing  (Depends on how fast house values drop to reflect actual incomes).  Once this massive drain is complete the rest of the economy should start picking back up.

blackton:  I used to worry about your political strategy.  Now I'm worried about your investment strategy.  If your candidate wins, as appears likely, and turns out to disappoint you, you'll be sad, but get on.  If your IRA disappoints, you'll be sad and may not get on.  Take a little advice from an elder.

Put your retirement money in a fund or funds that are diversified across asset classes and are 60% stocks and 40% bonds. Classic advice in newspaper financial columns since forever.  This semi-retiree, currently bleeding but not --yet--in need of triage can attest to it.  I retired at the end of '02 at 62.  At the end of '07 my rollover IRA balance was exactly double what it was at the end of '98 (with no contributions since '02 and withdrawals of principal equal to about 10% of the balance at the end of '02).  With the current bloodbath, the balance is back almost to the nickel to where it was the day I retired.  A big setback, but not--yet--a fatal one.

Nothing special here, just stubborn adherence to what just about every decent financial columnist has long recommended.  Enjoy the election and after it is over rethink your financial plans for the next 20 years. CDs aren't the answer for your timeline. Best wishes.

blackton said:   “jackson, thanks, but I am like Jeff Frey and I have 20 some years to come back, plus I have my health, a beautiful wife, 3 kids, etc. so I count my blessings daily. I also know that I am in pretty much the same boat as many, many other people.”

I wish you success, Blackton. It wouldn’t hurt though to listen to lsernoff’s excellent and prudent advise which I have been following all my life.

“I agree with Brooks, this whole credit default swapping, which was illegal 100 years ago, was brought on by this Ayn Randian b.s.”

I liked Brooks article and no one could say enough bad things about Ayn Rand and her pernicious influence on American conservatism. We are a nation of individualists and her philosophy gave that individualism an “intellectual” rationale which allied as it became to our emotional attachment to a free unconstraint self made it all that much harder to dislodge.

It’s ironic that libertarians often accuse liberals of having feelings and not ideas when libertarian philosophy is all emotion with very little intellectual content. Rand’s appeal to Aristotle is laughable.

In any case while I liked Brook’s article he dropped the ball when he tried to analogize individual economic decisions with those made by governments. Individuals don’t often act rationally but that is because there is no distance between the desire and the act.

This isn’t true for impersonal agencies which while motivated by other subjective and hence non-objective considerations there is still a mediation process in place. Impersonal agencies can be wrong (sometimes very wrong) but they are not irrational.

“Marty is right about one thing, this won't last forever. In less than 3 years everything will turn around.”

I am sure it won’t but that is in the long run, in the short run a lot of people who don’t the strength you (or I) have will suffer.

Ah, good point lsernoff.  Many people love financial roulette, not just those great big Wall Street Fat Cats.  My wife comes home with these stories about people having to put off retirement now.  And they almost made it!  Just a year or two to go!  And with retirement right around the corner, what were their retirement account holdings?  100% equities of course, and not that boring S&P 500 stuff in a good many cases (I know, like it would have helped - but it tells you a lot about the mindset) but aggressive growth, emerging markets, you name it.  The mind boggles - hell, I've got 30 years to hang around and wait and I've got half my nut in cash for the last year or so.  These aren't unintelligent people either; they were just going for the home run.  Greed exists everywhere.

Anyway, good job playing it smart and I hope you make out all right.

At the arts and letters digest on line there is an interesting debate posted between a left of center anti Libertarian and a libertarian about the causes of the current crises.

“The End of Libertarianism: The financial collapse proves that its ideology makes no sense.”  By Jacob Weisberg

www.slate.com/.../2202489

and by way of rebuttal:

“The Libertarian: Strident And Wrong”

Richard A. Epstein

Defending libertarianism Mr. Epstein makes some interesting points blaming the crises on governmental home mortgage landing policies. How else would a libertarian respond?

Still he ends his piece with the following.

“Accordingly, we recognize that the specter of bank runs, illiquidity and credit freezes might justify some regulation. In dealing with the current crisis, we have to accept some role for the Federal Reserve as a lender of last resort under our current institutional arrangements. But we are equally adamant that bad regulation can wreck credit markets. And we insist that governments must mend their lending habits to reduce the odds of credit trains going off the rails yet again. We also strenuously oppose using the credit crisis as a lever for introducing all sorts of senseless gimmicks to disrupt labor and product markets.”

In other words because people would react like libertarians and take their money out of Banks if they believed they weren’t safe he would support “some government regulation.”

This is like a Leninist saying the Marxism is the only correct economic program that will help mankind abolish poverty but for the sake of social stability they would in the meantime accept a market driven economic system.

No fanatic, be he or she, Libertarian or Communist will ever admit that their ideology isn’t perfect. They always put the blame on the other side.

The government is to Libertarians, or false consciousness is to Marxists: the hidden cause of the failure of the realization of their ideology.  

Mr. Epstein in accepting some role for the Federal Government in regulating the economy has contradicted the basic principle of Libertarianism: “the government is always the cause of the problem never the solution.”

No wonder he ends his article by attacking his opponent Jacob Weisberg:

“Weisberg is oblivious to these strands of the libertarian tradition.”

I wonder hoe many honest libertarians would agree with Epstein that there is a role for the Federal Reserve in libertarian philosophy? Would Russell Kirk have agreed to that proposition?

TLaBorn suggested I "eyeball the last 50 years of the stock market."  The problem with looking at only the last 50 years is that it may be too short a time period (perhaps our descendents will know better when there is enough data, say in another 300 years or so).  

Marty's opening comment on this thread concerned the number of times the stock market can decline 3% a day, something that has happened 13 times this year -- so far.   There have not been as many as 10 such days in any other year in the last 50 years (there were 9 in 1987).  Between November 18, 1974 and October 25, 1982 -- a period of almost eight years -- there were NO days in which the market lost 3%.  Most of us probably thought a Wall Street panic was something that happened in the old days, or just one of Faulkner's more obscure Snopeses.

Go back 100 years and we get more perspective -- there were more than 10 such days in 1929, 1930, 1931, 1932, 1933, and 1937.  We are seeing things in the market that very few people alive have lived through.  

We've also had an alarming large number of very good days -- 10 times so far this year the Dow Jones has gone UP by more than 3% in a single day.  This did happen once before within the last 50 years (2002), but it happened 6 times in the decade 1929-38. Are we near the bottom of the current crash?  I hope so, but we may not know for years.  Are we in for another dismal decade or two?  It's happened before.

There is an interesting discussion about the current financial crisis and the role lack of regulatory oversight played in sparking it on WBUR's ON Point:

"The Economy According to Kaufman"

"Amidst rising home foreclosures and the worst financial crisis since the Great Depression, Americans are asking, what can be done?

Now that blind faith in unfettered markets, by the likes of Alan Greenspan and a generation of free market hot shots, looks fatally misguided — who can we trust?

How about Henry Kaufman — the Wall Street sage who predicted back in 1990 that we’d pay a heavy price for Wall Street’s recklessness. Back then he was known as Dr. Doom, but he was right.

This hour, On Point: Henry Kaufman’s plan for a new economic era, and his faith that this too shall pass.

You can join the conversation. Are you feeling this economic downturn? Are you worried about the future? Do you see hope on the horizon? Share your thoughts."

You can here the podcast here:

www.onpointradio.org/.../the-economy-according-to-kaufman