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Financial crisis fallout: from your stocks to America's global role

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At the market bottom, 3,518 of 9,194 stocks tracked by S&P were trading at less than eight times their prior year's earnings. The historic average is 16 times. Nearly 10 percent (876) of the total were trading below the value of their per share holdings of cash, notes Froehlich. He sees "an unbelievable buying opportunity."

The problem is that no one knows when enough investors will agree to move their cash back into stocks to end the bear market.

The US economy

Most economists figure the economy is in a recession, but differ on the depth and length of the slump. Much depends on whether the credit squeeze eases as a result of the numerous government measures announced or already in place.

The general tenor of the political scene is moving left, says Bradford DeLong, a former Clinton Treasury official now teaching economics at the University of California, Berkeley. History shows free market principles are "forgotten fast" when a financial crisis comes along, he says. So the major banks are being partly nationalized.

Even the late Milton Friedman, the famed advocate of stable growth in the nation's money supply, would have advocated drastic measures to keep the money supply stable rather than shrinking in a financial crisis, says Professor DeLong.

Noting that it is financial institutions being rescued, he comments critically: "Rugged individualism applies only to the poor and the middle class."

A Chicago Council on Global Affairs public opinion survey released last week found 60 percent of Americans believe the next generation of Americans will be economically worse off than today's working adults.

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