I wrote last week that it wouldn't be unreasonable to expect the S&P500 to bottom out around 150. That estimate was based, among other things, on the explicit assumption that profit for the S&P500 would fall by only a third.
Well, Warren Buffett said today that Berkshire Hathaway's 2008 profit fell by 62 percent, and its fourth quarter 2008 profit fell by 96 percent. If those are benchmarks for the profits of the entire industrial sector, we may be looking at an S&P500 bottoming out around 75, and the Dow in three digits, much as Professor Casti predicted.
(Comic footnote: In an apparent attempt to prove that American conservatism is the cognitive twin of Monty Python's Black Knight, AEI "scholar" James K. Glassman is still defending his claim that the Dow will soon hit 36,000.)