Anderson Cooper: A lot of questions, a lot submitted on the AC360° blog. There is down right fear, panic. Is that counterproductive?
Suze Orman: It is not counterproductive, it's real. It's how people feel and the markets are made up of how people feel. They buy or they sell based on their emotions, Anderson. It's how it has always been. When Ali does this thing with the drugs, I was talking to you before we went on air, this is what is happening. People feel they need medication because they are panicking.
It's as if the economy right now is in the I.C.U. unit of a hospital. We are in intensive care and they are throwing everything type of medication at us to cure what is going on. They are panicking because why? Nothing is working. They tried this, it didn't work. They tried that medication, it didn't work. They are running out of prescriptions to give it. We are going to be in the I.C.U. unit for a while. Eventually, I don't know when that will be, six months, a year, year and a half, we will get out, we’ll be in the hospital then. We'll stay in the hospital for about a year or two. After another year or two we will end up in rehab and then we'll be okay. This is a long stretch. People have to stop panicking. This is here to stay, if you ask me, for a long time.
Anderson: Panic produces paralysis. People need action. How low do you think the markets can go? In terms of stock market, the credit markets matter, but you talked about the 8,000 range for the stock market.
Suze: 8,200, 8,000. Hopefully that is as low as it goes. But I do think we are about 1,000 points from where the bottom should be.
Anderson: We have a couple of questions from viewers. Lorie Ann in California asked:
If it is a possibility everything we throw at the crisis doesn't work, what will that result look like, bread lines or something less frightening?
Suze: I’m sorry to say that it could look like bread lines. I know that is not really a great thing for me to say. But I want you to think about the reality of this, for those of you who have credit card debt, you are losing your home because you are behind on your payments, you can't make your car payment, you work in an industry possibly that you are going to lose a job in, you have absolutely no money and this keeps going on and you can't get another job what are you going to do? It is very, very possible you will start to see things not where there are bread lines like we saw and nobody having – but a lot of people out on the streets. People calling into my show that are living in their car because they don't know what else to do.
Anderson: A lot of people losing their jobs. Lilibeth in Washington:
You say for those with ten or 20 years before retirement to ride this out. I cringe. At what point do you say enough is enough? When the DOW hits 8500, 8000, when?
Suze: No, in fact, let's say you are you have ten, 20, 30 years until you need your money, the biggest mistake you will make, please listen to me, everybody, the biggest mistake you will make if you stop contributing to your retirement accounts now. If you have been putting money in your 401(k)s, now is not the time to stop. You want to see, if it continues to go down you want to see your contributions continue. Because, again, as I’ve said, the lower the market goes, the lower your shares go in your 401(k).
Anderson: Even if it is going down every month.
Suze: If they make a stoppage and freeze everything they have to get out of the market. Otherwise they are not dollar cost averaging down, Anderson and they don't accumulate more shares and there is no way to make the money back when they come back up.
Anderson: Suze Orman, thanks so much, as always.
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