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9:00 AM EST, Thursday, September 18, 2008: There are several theories:

1. It will continue going down. This chart compares 1973 with today. It was widely circulated on Wall Street yesterday. The chart shows, theoretically, we have a lot further to go down..

2. The world's central banks will save us by pumping more and more money in. They're trying that strategy today. I don't believe it will work. When the U.S. saved AIG, stockmarkets should have rallied. Instead, they plummeted. No one can solve this by writing checks. Checks solve individual crises. But they don't fix the underlying cause -- the dropping value of assets, from houses to commercial property, from the creation of new jobs to the hugely-high price of oil, etc.

3. Two years from now, many of today's stock prices will be great bargains. The problem with this theory -- which suggests we should all be buying now -- is that outside of financials, there really aren't any great compelling bargains. Despite huge price drops, Apple is selling at a 25 P/E. Research in Motion is selling at 34.4 P/E. Bucyrus is selling at 17 P/E. CSX at 16.1. Google at 27.2. Johnson & Johnson at 16.9.

4. Fear is palpable, exacerbated by fear of the unknown, and what might happen next. Here's an example, from the Financial Times:

AIG takes the biscuit. Here was a huge multinational insurance group with a reputation for solid underwriting and risk management that decided to diversify from insuring risks it knew well – car crashes and fires – to covering derivatives it did not understand.

Of course, it thought it understood them. In presentations to investors this year, it emphasised how thoroughly its AIG Financial Products arm assessed the risks of insuring CDOs. It ran all the data and decided that, in the worst case, it risked losing $2.4 billion on the portfolio.

Well, $24 billion of write-downs later – a mere 10 times its maximum estimate – the company has burned through its equity, spread financial chaos to all corners of the earth and humiliated the US Treasury. The job of insurance companies is to guard others against catastrophes, not cause them.

The word “irresponsible” does not begin to describe AIG’s behaviour. Like Bear, Lehman and others, it saw a way to get in on the growing action in mortgage-backed derivatives. Its bankers were soon earning huge fees for themselves and AIG by piling up unimaginable risks.

Buffett has argued that some of the new financial instruments were time bombs. I admit I'm in his camp. Don't buy something you can't understand. I found this explanation last night:

Credit-default swaps are financial instruments that are used to speculate on a company's ability to repay debt. The agreements between so-called counterparties trade over-the-counter, leaving each side exposed to the risk that their partner will fail to pay its obligations. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.

Money Market Funds Enter a World of Risk. The first money market fund has "defaulted." See yesterday's column. Today the New York Times has a piece on what's happening to money markets. Click here. Investors are obviously scared of money market funds (as I am). Investors have flown to "safety" -- everyone is rushing to buy treasuries:

There are money market funds which only invest in treasuries. There are muni bond funds which only invest in muni bonds. The "problem" with muni bonds is that some municipalities are suffering a huge drop in their tax revenues. Their bonds are less safe than they used to be.

Gold is also up. But I wouldn't gamble on it. It's been erratic.

The year is 1533: King Henry's wife, Catherine of Arragon, can't deliver a male heir. Henry wants to annul his 18-year marriage to Catherine and marry his mistress, Anne Boleyn. The Pope refuses. The King severs with Rome, and establishes the Church of England, whose new boss goes along with the annulment and marriage to Boleyn. Meanwhile, Sir Thomas More, Chancellor, baulks, gets thrown in jail and a year later loses his head. The story has been retold a thousand times. But you won't find a better telling of it than presently playing on Broadway in New York. Go. Please go. It's truly great theater.

Frank Langella is Henry. He's stunning. Tickets at Roundabout.

Marriage saver: Men lose their hearing faster than women. Hence we battle over TV volume. The solution is the Sennheiser RS 110 headphones, which I have now attached to each of our family's TV sets.

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There are two ways of buying these headphones -- with the charging cradle, for $76. Or without the charging cradle, which is Amazon's incorrect name for the gray wireless transmitter. You want them with the transmitter. You can use as many headphones as you want on with one transmitter. You can actually be in bed and listen to a TV in another room. The headphones, by themselves, are called Sennheiser HDR 110. For the set with the transmitter, go to Amazon. I've mentioned all this before. Many of you are now cursing me because your headphones are no longer working as well as they did when they first arrived. Solution: Put in new batteries. That's it.

Wonderful billboard: It's outside a restaurant in North Versaille, PA.

The restaurant's website is www.casadice.com.

Bran Muffins.
An elderly couple were 85 and 86 years old, and had been married for sixty years. Though they were far from rich, they managed to get by because they watched their pennies.

Though not young, they were both in very good health, largely due to the wife's insistence on healthy foods and exercise for the last decade.

One day, their good health didn't help when they went on a rare vacation and their plane crashed, sending them off to Heaven.

They reached the pearly gates, and St. Peter escorted them inside. He took them to a beautiful mansion, furnished in gold and fine silks, with a fully stocked kitchen and a waterfall in the master bath.

A maid could be seen hanging their favorite clothes in the closet.

They gasped in astonishment when he said, 'Welcome to Heaven. This will be your home now.'

The old man asked Peter how much all this was going to cost.

'Why, nothing,' Peter replied, 'remember, this is your reward in Heaven.'

The old man looked out the window and right there he saw a championship golf course, finer and more beautiful than any ever built on Earth.

'What are the greens fees?,' grumbled the old man.

'This is heaven,' St. Peter replied. You can play for free, every day.'

Next they went to the clubhouse and saw the lavish buffet lunch, with every imaginable cuisine laid out before them, from seafood to steaks to exotic deserts, free flowing beverages.

'Don't even ask,' said St. Peter to the man. This is Heaven, it is all free for you to enjoy.'

The old man looked around and glanced nervously at his wife.

'Well, where are the low fat and low cholesterol foods, and the decaffeinated tea?,' he asked.< /B>

'That's the best part,' St. Peter replied. 'You can eat and drink as much as you like of whatever you like, and you will never get fat or sick. This is Heaven!'

The old man pushed, 'No gym to work out at?' 'Not unless you want to,' was the answer. 'No testing my sugar or blood pressure or...'

'Never again. All you do here is enjoy yourself.'

The old man glared at his wife and said, 'You and your horrible bran muffins. We could have been here ten years ago!'

Something has happened to my tiny brain. I now think old people jokes are funny.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.