Every correction is the same, a normal downturn in one or more of the markets where we invest. There has never been a correction that has not proven to be an investment opportunity. You can be confident that governments around the world are not going to allow another Great Depression “on their watch”.

Every correction is different, the result of various economic and/or political circumstances that create the need for adjustments in the financial markets.
While everything is down in price, as it is now, there is actually less to worry about. When the going gets tough, the tough go shopping.

In this case, an overheated real estate market, an overdose of financial bad judgment, and a damn the torpedoes stock market, propelled by demand for speculative derivative securities and Hedge Funds, finally came unglued.

But it is the reality of corrections that is …

“The Big Takeover” by Matt Taibbi is probably the best article written to date explaining the financial crisis and how we got to where we are now. Taibbi’s necessarily lengthy article explains the problems, names the “poipetrators”, and exposes all of the conflicts of interest— absolutely a must read.

AIG, Goldman Sachs, and J. P. Morgan turn out to be the major players causing perhaps the greatest financial crisis in modern history— even if the pain is unlikely to get near Great Depression proportions, the dollar losses to individual investors have certainly gone as far.

JPM was the brewmeister of the CDO, a vat full of various kinds of income securities, determined to be less risky because the income on most would almost certainly keep flowing— kind of like the once popular junk bond fund that Wall Street insisted was not risky …

Dr. Jeff Masters gives us the latest on monster hurricane Ike …

Ike's long-term fate has two main possibilities:1) Ike may hit eastern Cuba, as forecast by the latest (12Z, 8am EDT) runs of the GFDL and ECMWF models, and a number of ensemble members of the latest 12Z GFS model (Figure 2). A hit on Cuba would severely disrupt the storm, weakening it to a Category 1 or 2. Ike could then move on into the Gulf of Mexico and re-intensify, as forecast by the ECMWF model.2) Ike may plow through the Bahamas and come very close to South Florida (the consensus of the HWRF, NOGAPS, and GFS models). A trough of low pressure may then pull Ike to north. This turn to the north might occur over Florida, or over the western Bahamas, within 200 miles of the Florida coast. In the latter case, North Carolina might

...

By Jennifer Yousfi Managing Editor Just days after a key U.S. stocks index posted its worst month since the Great Depression, three global investment banks are predicting the biggest second-half rally in more than 25 years. Market strategists at Deutsche Bank AG (DB), Lehman Brothers Holdings Inc. (LEH) and UBS AG (UBS) are predicting that the Standard & Poor’s 500 Index will soar 25% to 29% in the last six months of the year - making for the biggest rebound in that closely watched index of U.S. stocks since 1982, when Ronald Reagan was in the White House. Deutsche Bank Chief Strategist Binky Chada is the most bullish of the lot, betting the S&P 500 will rocket 29% in the year’s second half, to close at 1,650 before January. Lehman Chief Global Strategist Ian Scott is calling for ...

Harrington Emerson was more than a consulting engineer. He was a pioneer of professional business management. The zenith of his career coincided with the development of a stock market structure, and with the Great Depression and its aftermath as well. He passed away more than two decades before Peter Drucker introduced Management by Objectives to the management world. After reading the writings of Harrington Emerson on the 12 Principles of Efficiency, a person has to conclude that Drucker did not know about this book when he was published for the first time.

A take-away from this piece of U.S. business management folklore is that records are like carpets. We do not know what transpired, on a day-to-day basis, in the minds of pioneering executives who pulled North America from depression to dominance. Though we cannot recover such treasures, there is not a day to lose when it comes to preserving

...

By Jason Simpkins Associate Editor High oil prices, a steep drop in consumer confidence, declining home values and a weak dollar conspired to drive the Dow Jones Industrial Average to its lowest point in two years, and made for the benchmark index’s worst June since the Great Depression. After falling more than 300 points last Thursday and extending losses on Friday, the Dow lost 4.2% in the week ended closing at 11,346.51 - its lowest level since September 2006. All totaled, the Dow plunged 9.5% in June - its worst mid-year performance since the 18% drop in the 1930s. Story continues below… Sign up right now, and we’ll send you an important new report for free: “The Three Best Investments in Asia.”...

As a cheerful Bloomberg headline reminds us, equity investors are facing their worst June since the Great Depression. And sure enough, most major markets (the Hang Seng, Dax, CAC, S&P 500 … ) are down more than -8% this month, pulled lower by a number of concerns including a) the health of Western banks, b) the rise in oil prices, c) deteriorating economic growth and d) worsening inflationary pressures.

If the current month ended today the Dow Jones Industrial Index would be down 9.4% and have locked in the worst June since 1930. Check the following chart, coursey of Paul Kedrosky, for the painful picture.

“Granted, June 2008 is not in the top 30 bad months of all time, so let’s keep our

…

A couple of great questions came in on the Seeking Alpha version of this morning's post about run-of-the-mill bear markets and I thought it would be useful to post the questions here and how I answered them.Why do you think we won't have a decline similar to what we had in '00-'03, which was a lot more than 30%?Markets cut in half every so often; the great depression, the mid 1970's; the start of this decade and I also know there was a depression in the 1870's but do not know what the market did then, there was also a bank panic in 1907 that lead to a 37% decline that year. If you notice you see the gaps in time ranging from 22 years on up.I believe the reason for this is that the market "can't" cut in half so soon after doing ...

Some very harsh rhetoric coming out of the newly elected Russian President. I guess our financial innovation did not go over so well with other countries... ahem. Should be an interesting era we enter next - in the "World of Shortages" scenario each country will have their natural resource strengths and if true scarcity develops it will be very interesting to see how cross border trade develops. One advantage for both Russia and America is their natural topography - worst case scenario if things really turn bad globally (lack of serious technological breakthroughs to compensate for 2.5 billion more humans by 2050) both countries enjoy abundant agricultural production. Then again you need fresh water for said agricultural production, but that's a worry for another day. We can always invade Canada for water anyhow, I mean we outnumber than 10:1. ;)Russia ...