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Stock market crashes have happened a number of times since the crash of 1929-heralding the great depression of the 1930's. Some have been spectacular like the 1987 global crash, the Nasdaq-'dot.com' crash of 2000-2001. They happen, they're cyclic, they're bloody and the market does eventually recovers. The stock market after all most of the time is based on informed speculation; a raw gamble, a spin of the wheel, a throw of the dice.

The market is very cyclic, crashing, going into a Bear market and then recovering. The 1970's oil shocks led to steep market declines and Bear markets before starting a Bull market in 1982, ending in 1987. They happen, there to be expected. Crashes cannot be avoided. Market players adeptly refer to them as 'corrections'-they are crashes-plain and simple. Trillions of dollars can be wiped out worldwide.

In 2008, we have the ingredients for a stock market crash. Huge amounts of debt being carried by mortgage companies, brokerage houses, banks and personal lenders. Liquidity is tightening significantly due to the amount of shared debt these companies carry from the sub-prime crisis, and the reluctance to put out new capital. What makes matters worse is that the OVERALL debt carried by consumers, corporations and the federal government is HUGE, and an ever-growing monster. These events are eeriely reminiscent to the events that directly lead to the great depression: a severe liquity crisis brought on by huge debt loads and monsterously rampant overspeculation.

We will not necessarily go into a depression due to the number of checks and balances. But the stock market is after all one gigantic room of speculators that can bring the market down easily. It's human nature to panic...it's even more human nature to protect one's money and other financial assets. We are a capitalist-driven society, after all. The Dow Jones is a huge market. Even a drop of seven to nine percent can have a huge financial impact. Couple a more moderate crash like that with a Bear Market and you have a recipe for huge losses.

The market is poised to have a 17-25% crash this year, followed by a one to two year Bear Market, as the sub-prime and other financial woes finally bring the market down. The issue is for investors to quickly diversify their investments as much as possible now, before they are caught up in the slaughter of the crash. Diversification and personal debt reduction is the key to ride out the coming bad times. Then when the market does finally

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