The U.S. Stock Market will stabilize when people believe that asset prices including homes and commercial real estate stop declining.
Currently the financial markets are in turmoil because many loans have been taken out on residential homes and commercial real estate where the value of the asset has dropped and is now worth less than the loan.
Lenders are concerned that borrowers will walk away from the asset used as collateral for the loan, leaving them to hold the bag and pick up the pieces.
I do not believe that asset prices will stabilize until 2009 at the earliest.
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