Ten days ago I said that investing one’s money takes confidence. It seems I was more accurate on that point than ever, as August 2010 turns out to be the worst August since 2001, and that was days before what happened to the World Trade Center.

The Dow dropped 4.3% in August, including dipping under the magic 10,000 number a few times. It’s ending the month around 10,014, but there are big questions as to whether it’s going to stay there. Negative job reports on unemployment, housing reports, and the slow growth of the economy has many of these high powered brokers and their companies scared, and it’s probably scaring the regular investor as well. The Federal Reserve has changed its forecast of recovery and reduced expectation, and there’s even been some talk about lowering interest rates even further, although I not only don’t think that will happen, but I’m not sure it should happen.

Frankly, I’m wondering what’s about to happen as kids get ready to go back to school. Often a time when the retail market gets a nice little boost, it’s possible that things will be drastically different this year, which could continue the slide of the market if retail stores don’t hit traditional numbers that are often expected by early October. Many communities around the country have reduced the number of teachers and canceled programs of study, so those students won’t need supplies or books for those classes. Here in New York, they’ve eliminated the no-tax on clothing, thus parents may not be shelling out as much money as they have in the past for clothes, or looking for more discount clothes, and my bet is that New York won’t be alone. Oh yeah, there are also fewer kids, so more schools are being closed as well.

I haven’t read about their being a rush to get college students laptops for school this season, and if the iPad can handle a lot of what students need (I don’t know the iPad all that well) then traditional computing will be in trouble, as it’s been predicted to occur by technology researcher Gartner.

It certainly doesn’t have the feel of a confidently growing economy, does it?

Last December I wrote on Intel being sued by the Federal Trade Commission based on the sweetheart deal Dell was getting for using their chips in Dell computers. The suit against Intel is about to commence, but it seems Dell did a proactive move and decided to settle with the Securities and Exchange Commission to the tune of $100 million in fines. The reason for this is because they reported all that extra money coming from Intel as revenue, which of course helped improve their bottom line for investors, and that’s a major no-no. How any of this affects Intel long term no one can say, but this is the kind of corporate ugliness that makes us not trust large companies.

In April, I wrote about black farmers finally getting a deal with the government to pay them for long standing abuses that pretty much wrecked their lives. The last remaining piece of legislation was to pass the bill to pay for it. In May, I wrote a follow up to that, saying that they still hadn’t been paid, and that if Congress didn’t get a move on that the deal would expire and open the government back up to multiple individual lawsuits.

It seems that the government missed another opportunity to provide funding for this lawsuit when the house passed a war supplemental bill last week. The provision was in there, but it was scrapped to get the bill passed. I hate calling anyone out, but it seems one party in particular, in the Senate, is really against paying any money to black farmers; they sometimes go by the moniker “party of no”. The Senate minority leader is saying all the right things, yet it remains locked up and the bill will probably die without ever being voted on. I thank Tim for bringing me up to speed on the issue, since it didn’t make the headlines.

We all knew it was coming, and today it finally came.

The Dow Jones Industrials has been up and down, riding an interesting roller coaster over the past couple of weeks that saw it drop below 10,000 a couple of times, only to rally back above the mark by the close of the day. Last Friday was the last time the market dropped, only to recover later. Today that didn’t happen, and the Dow ended the day at 9,974.45, dropping about 70 points or .7% on the day. This time, things started out well, then slowly declined.

Once again, world events have impacted the Dow, as the euro continues its slide. Last week I mentioned Germany, but now it seems there are worries coming from Portugal, Italy, Ireland and Spain, and even the United Kingdom seems to be somewhat shaky. Not to mention Microsoft’s message today saying they’re going to reduce marketing and potentially stay away from China because the country won’t enforce their copyright laws & protect Microsoft’s licenses. And China might be the catalyst for the market’s decline because they’re heavily invested in European bonds, and with the market so shaky there they’ve started making overtures that look like they might try to get out from under some of them, hence a little bit of panic.

With all this uncertainty, is it the right time to put your money into the stock market? I asked a broker friend of mine about it and he said yes, but it depends on what it is you’re putting your money into. Putting one’s money into a money market account, where your funds are spread out among a bunch of different types of stocks, is always a good bet because, on average, they end up growing over the course of 5 to 10 years as opposed to suffering drastic losses. However, one still has to be predisposed to be ready to ride it out for the long haul, as one’s money could always potentially stagnate or even decline if there are more losers than growth stocks, as what happened to my portfolio last year.

Prediction for the next two days? Nope, I’m out of the predicting business, because it turns out the only real way one can hope to do it with any real chance of making money or losing very little is to keep watch on it every hour to see what’s going on. By the way, the NASDAQ and S&P were also down, .68% and .57% respectively.

What a wild ride on Wall Street this past week. With worries about many countries in the European Union, the fall of the price of oil, and of course the massive oil spill that seems to be taking a life of its own, numbers were dropping for much of the week, even falling below that magic 10,000 number early Friday.

Then, without much fanfare, stock prices started going back up, finally closing the day at 10,193.39. This was after Germany pushed through its own package of emergency aid to help get the region back to some kind of fiscal balance.

The reality that many of us have to realize is that in today’s world there has to be a great consideration of what’s going on in other countries as it pertains to their financial health. There are so many American companies tied in to the infrastructure of other countries, and of course exports and imports to other countries are a big deal.

If other countries can’t afford to buy American goods, then it affects American businesses. If our country is in trouble and starts holding onto its money, then companies in other countries will be in trouble as well.

Banks really proved to be a big deal in 2008 and 2009 when they had to be bailed out. It wasn’t necessarily because the United States would have been injured, but because those banks had their tentacles into so many other countries that it could have caused a world wide catastrophe. Some of us didn’t like it, but at least the government’s heart was in the right place.

In any case, Friday’s rise ended a 3 day skid, which included a 376.36 point drop, or 3.6% drop on Thursday, which was the largest percentage drop since March 5, 2009. It’s no wonder everyone on Wall Street was breathing a collective sigh when the bell rang on Friday.

Just when you think you’ve seen everything, you come across a day like this. The stock market took a major league tumble, then found a way to right itself. At one point during the day the Dow was down more than 900 points, before rallying to end the day down a little more than 300 points.

Even though it was initially estimated that the problem was worry about the situation in Europe, where Spain suddenly seemed to be in the same position as Greece was last week in needing emergency money, it’s now being speculated that there might have been a glitch in the computer system that helped cause the dramatic downturn.

Either way, it had people scurrying around with their heads cut off, or at least looking like they did, as everyone tried to figure out what was going on. When something is coming across email with breaking news that looks like someone’s announcing that the world has come to an end, it’s dramatic to say the least.

By the end of the day the Dow was sitting at 10520.32, a reduction of -347.8 points, or a -3.20% decrease on the day. They’ll take that because there had been a drop of 600 points in the course of 7 minutes which is what got everyone up in arms before the rally. As a matter of fact, after all the markets had closed, the NASDAQ decided that they were invalidating any trades that occurred between 2:40 and 3PM, saying there had to be an obvious glitch. That left the NASDAQ down 3.4% on the day, and Standard and Poor also took a hit, falling 3.2% on the day.

If it turns out that it was some sort of computer glitch, it’s going to set a scary precedent that might remind some people of the movie Die Hard With A Vengeance, since the premise of that movie was the ability of one man to crack all the country’s most secure computer systems at once. We’re starting to see just how reliant this country is on its technology, and who’s to say that it won’t be a target of terrorists one of these days.

It should be interesting to see how the markets close tomorrow, especially after the elections in the United Kingdom, which didn’t produce an outright winner and thus leaves their financial markets still in disarray. It’s looking a lot like that 8-week streak of gains by the Dow will be over.

This can’t be a surprise to anyone, but yesterday, the Dow Jones closed at 9,908.39, falling 104 points from last Friday. Supposedly, the market is falling because of three reasons. One, President Obama wants there to be a bit more regulation in watching what these guys do. Two, foreign markets have been erratic, especially with there being many worries about the Chinese markets and what’s going on in Dubai. And finally, supposedly many of these guys thought that our economic recovery was going to be better than it is, so there had been a lot of optimism, which inflated the market without any proof that it was on its way back, and now it’s falling back to where it probably should have been anyway.

Let’s look at this realistically, if we can. First, President Obama is absolutely correct, and all we need to do is look at how Bernie Madoff and others pulled off Ponzi schemes to realize that the market hasn’t figure out how to take care of itself. If we need more proof, look how far the market fell last year, almost going below 6,500. And finally, what’s with the price of oil, and the way these people speculate on it? Suddenly it’s falling again; why? I’m not mad because I love gas prices coming down, but there’s no real reason for it to be falling now, just as there was no reason for it to have gone up the way it did in the first place.

Second, this reliance on what’s going on in foreign markets needs to calm down. Anyone who didn’t know that Dubai was spending its way into trouble wasn’t paying attention. Anyone who is suddenly shocked with China’s finances and how they do things hasn’t been paying attention. There is literally nothing I see going on that shouldn’t have been expected by anyone who does a lot of stock market work, and that’s easily not me. These brokers take some major chances with our money, get it wrong, then get scared; that stuff has to stop.

Third, economic recovery; come on. I’ve written about this one often enough; unemployment really hasn’t come down, even if the percentage dropped, because there are no jobs. Jobs keep getting lost and there’s nothing replacing them; just where was this economic recovery everyone keeps waiting for supposed to come from? That, plus banks keep closing, foreclosures keep occurring, and there’s still this big negative prediction about the commercial real estate market. These guys are consistently grasping at straws; if we, the supposedly uninitiated, can figure this out, why can’t these high priced traders?

Wehre will the market go fro the rest of the week? I’m not sure, as I’ not a broker. I will say this, however. If it falls throughout the week, I won’t be surprised. After all, it seems like these guys are more like lemmings than true evaluators. And, truthfully, I think the market’s high was false anyway, so maybe it needs this bit of readjusting to get back to where it was supposed to be in the first place.

The date was 9/11/01; the time was 8:46AM. The stock market was supposed to open that day; it didn’t. Other than holidays or weekends, the stock market had never been closed for any other reason. This was the day it all changed.

The stock market stayed closed for days. I don’t think anyone cared. I certainly didn’t care; I doubt the people who worked at the stock market were happy to be away from there. Terrible way to get days off.

It’s funny, but if you look back at things, it’s possible that we owe a lot of our financial problems today to that day. Our economy was riding high before that. President Clinton had left us with a wonderful surplus. The stock market was riding high. We hadn’t had a dotcom bust yet. We all believed we would be something big, something special, even if there was still anger at how our election had turned out, not necessarily the choice of the man but the way the Supreme Court got involved.

On this day 8 years ago, we all forgot about that. We didn’t care anymore. But somehow, we knew everything had changed.

And it’s still changing us all today. Peace to you on this day.