Answer:  Very low, though I wildly speculate (putting me in the same expert category as any expert you can name) that DOW at 7000 and S&P at 700 will be the bottom of this megabear market, after which we’ll continue to see major trouble with the economy continue for at least 2 years during which many businesses will die, successful ones will consolidate and just keep in the game, and a handful of nimble and clever new businesses will thrive and lead the new “post recession” economy forward, probably based on impressive technological innovations now testing in a handful of big company R&D departments and literally *millions* of small business efforts around the globe.

Thanks to the internet, the rise of highly social media, and the plummeting cost of powerful computing I remain optimistic that technological innovation will pull us out of this crisis and remain for yet another century the key force behind most socioeconomic progress.

What’s pushing things down in stocks?    I think the main factor is simply that the market, which is predictive rather than reactive, overvalued how fast technology would trump other considerations and continue to lift mediocre companies ever higher.    It’s not as if many companies were doing profoundly brilliant stuff out there – on the contrary the auto companies were up to the same old stupid nonsene they’ve been doing for decades.   Financial companies were gambling with Credit Default Swaps and fueling the mortgage crisis with fundamentally irresponsible and misguided profiteering.   Even high tech companies, home to many of the globe’s best and brightest working for Yahoo, Intel, [Google?], and MSN found themselves in huge battles to protect market share and profitability while containing the onslaught of online spam.    Google may be something of an exception here as their profitability and advertising brilliance has – until recently – kept them squarely above much of the fray and on the path to more innovation.

About eight years ago this foolishness led to the bubble of 1990 where the internet company valuations were out of line with their potential for innovation.    The commercial internet revolution was an amazing thing in the 1990s and remains the most profound new development in history, but the companies were not all that inspired and most companies were destroyed by the very markets they had convinced to fund them in the first place.

So a far better question than “why are my stocks dropping?” is “Why were all these companies valued so highly in the first place?”     We needed a contraction to square the values with the prices, and now we are watching that happen.

Why 7000 DOW and 700 S&P?    At that point the markets will have dropped just over 50% from the highs of a few years ago.    I see that as a significant practical and psychological milestone.    “half off” is a very accessible notion as we know from retail, and we already know there’s a lot of money waiting on the sidelines to buy into a “market bottom”.     It’s reasonable to assume that at least some, and probably many of the companies hammered by this have been penalized irrationally by the broader market downturn.  As prices drop to 5 and 10 year lows some of these bargains will be irresistable to those with cash on hand, and this buying should  stabilize the market.

Will it rise quickly from 7000?    I say no – I think the globalized chickens have largely flown the coop and many of the unfair advantages we have enjoyed as Americans … will be no more.      I see no major depression looming and I see the USA as the economic “safe harbor” and leader for at least the next decade, but the days of easy prosperity are probably gone for some time so … buddy …. can you spare …. a dime?