Economic trends can in no way be absolutely predicted.  There is no way a strong economy can always dominate in any country.  We saw the tech, financial, and real estate bubbles blow up in our face.  I live in California where home prices have sustained ludicrous values for years.  Median income has never approached a level suggesting these prices were justified.  Illegal immigrants, bad credit risks, and the rest of mortgage holders who bought a home without any cash down and a serious lack of income; are as much to blame as the lenders themselves.  Buying a modest townhouse in a suburban Los Angeles middle income neighborhood for $450K is poor judgment.  I have believed the housing market to be inflated atleast 40 percent in California.  Now every politician wants to find a way for real estate values to hold their value.  What?  These homes are amazingly overpriced and cannot sustain their value, let the bubble burst!  It will hurt but spending tax payer dollars to re-mortgage property is just stupid.  The money will be spent, the credit market will remain somewhat tight, and the overall property values will drop anyways.  Everyone is so worried about incompetent buyers, what about people thinking about buying their first home.  Why should they have artificially inflated prices to deal with?

The current carnage is awful but eventually the market will gain ground.  If you’re buying stocks for short term investment, I feel sorry for you.  If your portfolio is your 401K, calm down because this trend won't continue forever and fifteen years from now you will be happy you didn't panic.