Dow tumbles to lowest in 12 years

March 2, 2009 11:47:00 PM PST
What was once a shock when stocks collapsed, has left so many investors dazed and confused. The Dow lost a whopping 300 points on Monday ending well below the 7,000 mark, at 6,763. That's the lowest level for the Dow in 12 years -- since April 25, 1997.

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It was another day, another closing bell, another drop in the Dow Jones industrial average. People we talked to in San Francisco, are seemingly unfazed by the market's volatility.

"It's getting to the point where you don't really care anymore because it's already gone down 50-percent, what's another five?" said Ben Bernstein, a San Francisco resident.

This latest sell-off was brought on, in part by billionaire Warren Buffett. In an annual letter to shareholders of his Berkshire Hathaway company, Buffett wrote, "The economy will be in shambles throughout 2009 and for that matter, probably well beyond."

Also troublesome to investors was the news that the government would give AIG a fourth infusion of taxpayer money, bringing the bailout total to $162 billion.

"We have a long ways to go, I think the bottom hasn't even hit yet," said Andrew Biernat, a San Francisco resident.

Perhaps, but the big question is "When will we hit bottom?" Contrary to what Buffett said, Fed Chairman Ben Bernanke last week said there is a reasonable prospect the recession would end this year. A sentiment echoed by the president's budget director, Peter Orszag.

Norm Boone, founder of Mosaic Financial Partners in San Francisco, is also optimistic. He predicts the economy will begin to stabilize within the next six months as a result of the recently passed stimulus package.

"While it's not a perfect bill, it is going to have some positive impact with regards to the economy and it just takes a while for those kinds of things to happen. It takes a while to get the checks out and it takes a while for people, to put people to work," said Boone.

Many people we talked to say they'll believe it when they see it.

"It's the same time you hear about three more of your friends who've gotten laid off, it just seems like there's no way things can't get good again or bounce back," said Lauren Quinn, a San Francisco resident.

The February employment report isn't going to do much to boost people's confidence. The report will be released Friday and will show a decline of 785,000 jobs which would be the largest one month decline in 60 years.

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