We all own Bear Stearns stock

Over this weekend, J.P.Morgan acquired Bear Stearns for $2 a share. Those of us who didn't DIRECTLY own Bear Stearns equity should not breathe a sigh of relief. INDIRECTLY, we who live in or near Manhattan own Bear stearns stock. Forget the impact in the near term on our common stock portfolios or the long term impact of the Fed's recent intervention on the nation's budget deficit. For those of us who own coop apartments, condos, and homes in the New York area, the major impact will be the substantial decrease, perhaps on the order of 20 to 25%, in property values, even at the "high end" of the spectrum. The deleveraging of our nation's economy will cause employment on Wall Street to shrink; and when that happens, property values will shrink as well.
As far as the stock market is concerned, we are entering the "puking" stage, or, for those more refined, the "throw in the towel" stage. This may be necessary to reach a durable bear market bottom. The final so-called selling climax is accompanied by a very rapid descent in stock prices on very heavy volume. Here is where Fibonacci numbers are helpful. The next such number, a 1/2 retracement of the bull market over the last five years, is 1170 in the Standard & Poors 500 Index. The last Fibonacci number, a 5/8 retracement, is 1070.