Deep, disturbing thoughts
Here's what I fear. It seems to me there is at least a chance that this depression will be something like Noah's flood, washing the ground completely clean of all the companies and institutions that went before it. Not unlike what happened to the social conventions of the late nineteenth and early twentieth century in which my grandmother grew up (gentlemen all had a man-servant to help them dress and ladies all had several live-in house servants and a nanny to help them run the household and take care of the kids, people dressed for dinner, etc., etc.) after the first World War scoured the social surface of the earth, all the companies we now know may go the way of the horse and buggy. Yes, the economy will come back, eventually, but will any of the companies that now make up that economy come back? I'm not sure. I always believed in diversification as a means to eliminate having all your eggs in one basket, but this may be the time that the diversification becomes irrelevant.
Why do I fear things might get this bad? Because the current government is doing everything it possibly can to make things worse. It is refusing to use the bailout money. It is refusing to save three million auto industry jobs. It is refusing to do anything sensible about the foreclosure crisis. It is promising to veto any extension to unemployment insurance. It wants to CUT spending (along with taxes on the rich) at the very worst possible moment. If it's not a deliberate effort to destroy the country before Obama gets it (a la, "if I can't have it, nobody can"), it might as well be. By the time Obama gets into power, it may well be too late to salvage anything.
And, if the today's companies all fail, where does that leave my portfolio? A scary thought, at least for me and most of my friends who plan to retire soon on their 401-Ks. Yet, I still haven't been able to bring myself to bail on the market. Am I clinging to a false hope? I just don't know, but I'm not sleeping very well these days.