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When will this occur? The next 6 months, a year, two years from now?

Same thing was said about the catastrophe theory people who warned about the statistical risk with the known flaws in the shuttle program design. They predicted a calamity of around 1 in 20 launches. When we go long stretches of success, we mistakenly assumed we are immune to the probabilities. It ain't so, as we learned tragically with Challenger, and Columbia. Same thing with the economy. We have a whole generation of stock managers whose only experience is with markets, and economies, that grow. Hence, they don't understand why we can't allow hemmorhaging at these levels. They don't understand the limits to the underlying industrial economy that underpins the whole thing.

"We have a whole generation of stock managers whose only experience is with markets, and economies, that grow. Hence, they don't understand why we can't allow hemmorhaging at these levels."

Yeah, that whole Crash of '87 and Internet Collapse of 2000/2001 was completely missed by today's generation...

< /mocking! >

I remember the panick mongers who wrote stock market panic books. I remember one which was published with 1990 on the cover, then republished with 1995, and then republished with 1999.

I wonder how much of this is facilitating SPECULATION rather than INVESTMENT.

How many times has the public been suckered by such panic stories? If a money "investment" is hitting the MSM then it is already too late to invest.

"Hence, they don't understand why we can't allow hemmorhaging at these levels. They don't understand the limits to the underlying industrial economy that underpins the whole thing."

I think Larry Kudlow understands perfectly:

"The dollar, in actuality, isn’t really weak. A broader dollar index of 26 currencies published by the Federal Reserve paints a much stronger picture. Since February 2002, the dollar has fallen 14 percent from a greatly overvalued position that deflated the U.S. economy into recession. However, over the last 10 years, this broad-dollar index is basically unchanged. The dollar is at nearly the same point today as it was in 1994. During this period the average inflation rate in the U.S. was 1.8 percent.

For even more perspective, since 1980 when the U.S. embarked on “cowboy capitalism” -- meaning Ronald Reagan’s policies of low tax rates, deregulation, free trade, price stability, and massive entrepreneurship that lead to Schumpeterian gales of creative destruction -- the widest profit margins in the world have attracted investment inflows from the four corners of the globe. Consequently, the dollar has appreciated 200 percent over the past 24 years.

Adjusted for inflation, the price of gold during this period has dropped from $1,264 an ounce to today’s $430, a decline of 66 percent for the yellow metal. So much for inflation. As for wealth-creation and the health of American business, the S&P 500 stock market average increased 950 percent during this long period."