I guess we no longer have to speculate how the Almighty Market will react to the recent credit downgrade.

Let me clearly state that I am NOT an economist, thank heavens, but this was not hard to see coming. Indeed, even though I am someone who started saving relatively late in life and I was, therefore, invested 100 percent in securities, I took all my retirement funds out of the market three months ago and put it in cash.

I had no formal financial advice. I did no research. I merely looked at the macro indicators all around me and the decision was easy. No way could I see that we were in for any period of recovery, let alone prosperity.  Both parties had taken a course of austerity at a time when we actually need a new WPA.  Democrats had retreated into Reaganism. Republicans took shelter in the economic wisdom of Herbert Hoover.  One out of six Americans have no real job. And little prospects. Manufacturing has disappeared.  Corporate management has acquired a taste for keeping things as lean as possible. Credit is still stiff. Consumer spending as portion of the GDP is at an all time low, reducing driver demand to impotency.  Spending on the military was to remain at an all time high and there was no chance of taxing the wealthy.

The market was OBVIOUSLY over-valued and it was only a matter of time that it would crash.  The perfect storm of the manufactured debt ceiling crisis, the tottering economies of Europe (punctuated by various riots here and there) and the credit downgrade all converged to break the back of the Dow.

One can play a guessing game, as one will, whether or not the plunge will continue, level out or even slightly reverse itself. One thing I am certainly sure of is that there is not going to be any sustained upswing any time soon. And those who talk of a "lost decade" may be understating things.

I was grimly entertained today by the flood of re-assuring advice on what to do about the market spewing forth by business editorialists, brokers and financial analysts.  I had to chuckle when I got a mass email from my Ameriprise brokerage urging me not to panic, encouraging me to see its counsel, and trying to soothe me by saying their experts were "closely monitoring" the situation.

LMAO.

If they had been monitoring closely enough, they might have forewarned their clients about the disaster in the making.

I also got forwarded an email that a friend received from his very, very respected fund manager.  This friend, already past retirement age, was advised to NOT even think about pulling out of the market as investments should be made in a way that they could weather a variety of different scenarios.

Right.

The only scenario that is never considered is that there just might be some tectonic shifts in the global economy and that the next 25 or 50 or 75 years could possibly be different than the previous. Really?  Typical of this religious faith in the perpetuity of stable global capitalism is this doggerel from today's New York Times. Economics writer Ron Lieber offers this nonsense:

So ask yourself this: Why are you investing in stocks in the first place? The answer should give you a sense of whether you should stay or you should sell.

If you need the money soon, for a down payment on a house or living expenses in retirement, you shouldn't have had much of that money in stocks in the first place. Selling now means locking in your losses, which will not feel so good if stock prices go up again in the next couple of months. Still, having most of your money in a savings account now would be better than having your stocks fall another 10 or 20 percent and then losing your cool and bailing out then.

If you can't sleep at night or concentrate during the day, then that's a sure sign that you did not belong in stocks in the first place. There is nothing like a quick market decline to provide a real-world test of risk tolerance. But so far, this is nowhere near as bad as what we experienced in late 2008 and early 2009. If you survived that, then you'll probably endure whatever happens next.

You can read the other 300 words if you like but I can save you some time. Here's the one sentence translation:  Keep putting money in the market so long as you have no interest in what happens to your money.

Meanwhile, the riots continue in Great Britain. The ECB is trying to shore up Italy and Spain. Moody's is considering its own downgrade of U.S. Treasuries. Gold crossed the $1700 mark. Barack Obama said he has a plan but didn't say what it was. And Eric Cantor wrote to his colleagues telling them not to cave into any post-crash pressure to raise taxes.

But don't worry. You'll probably endure whatever happens next.