bigworld, you put a lot of time and effort into your response, in laying out your positions and the reasons for them. I'm willing to let it stand at that.
I don't dispute that the macroeconomic situations of the US and Europe especially are in trouble. I just don't agree that these woes will be reflected in the stock markets. US corporations, which make up the S&P 500 index, are doing well and I believe will continue to do well. Market valuations would have to shrink by about 58% on average from current levels for the index to retreat to 450. People and businesses around the globe are not going to stop (or diminish to a great extent) buying products and services from AAPL, IBM, HPQ, WMT, XOM -- I could go on and on -- you get the idea.
You're not looking at this question -- will the S&P 500 retrace to 450 or even 400? -- from the same perspective as I am. These companies are not going down the tubes for lack of doing business. Why should stocks lose favor as an asset class so that these profitable businesses begin to sell at P/E's of 4 or 5? And with dividends of 15%? Your prediction doesn't make sense to me looking at the question from this point of view.