I still remember when I realized that a real estate crisis was on its way. My wife and I were contemplating buying a home in Roanoke, Virginia, and began talking to a mortgage broker. When we saw the final offer, we realized that, if the real estate market continued on a stable path, and if the (then marginal) neighborhood continued to have a declining crime rate, and if the price of gas didn't go up, and if neither my wife nor I became seriously ill, then we would be great. In five years, when the rate went variable, we would refinance and everything would work out beautifully.

That was in 2004.

Thinking about it, my wife and I soon realized that those were a lot of ifs; while we wanted the house, we knew that we couldn't base our financial future on a deck of cards. After turning down the offer, I thought more and more about it and began to get worried. If a lot of people were buying into the kind of mortgage that my wife and I had declined, and if they had similar expectations about refinancing when their rates went variable, then it seemed likely that the mortgage industry was sitting on a major time bomb.

Welcome to Way Off Wall Street, a column dedicated to providing Main Street opinions on topics of interest to investors. Each installment highlights the views of Americans who are far removed from the canyons of Wall Street -- and who often see things more clearly as a result.

This is the second part of a two part report in which I have examined current retirement attitudes. In Part One, I revealed some of the current thoughts and concerns that were expressed to me by people who are already retired, and by people who expect to retire within the next five years. In Part Two, I present the thoughts and attitudes of people who expect to retire more than ten years from now, and people who believe that the concept of a traditional, full retirement cannot be applied to their lives.

When examining the attitudes of people who will reach the retirement stage of life more than a decade from now, I found it difficult to form a well-rounded picture. I had expected that I would encounter numerous strategies and "secret formulas" for retirement success. However, what I actually encountered was a vast swamp of bewilderment, misinformation, and noncommittal apathy. I'm still rather stunned by it. These are people generally ranging in age from 45 to 60. I find it quite distressing that most of these people don't have a solid grasp on their own retirement planning. An article presented by redwoodage.com quotes Peter Smyth, executive vice president of The Hartford's International Markets, as stating: "The overall level of financial preparedness globally remains low and is deteriorating."

Most of these distant retirees seem totally blind to their own retirement financing. They complain that it's going to be difficult and expensive, but then they defer the responsibilities of their future financial security to employer-provided savings plans and government entitlement programs, including Social Security. Rare was the person I found who was involved in creating their own independent retirement nest egg. Additionally, I never expected to encounter such a stark contrast between this group and the people who are only about ten years older than they are.

Of this distant retirement group, those people who are actually taking an active hand in planning for their own financial futures seemed to favor two particular strategies. The first strategy encompasses those people who have engaged a professional financial planner for guidance in retirement planning and those who are utilizing their own skills and knowledge to actively develop a retirement portfolio on their own. The second active planning strategy is generally defined by a slow, and sometimes questionable, accumulation of tangible assets.

Banking analyst Meredith Whitney is credited with questioning assets on bank balance sheets given the collapse in the real estate market.

Taking advantage of a complete lack of information, Ms. Whitney triggered a massive collapse of trust in an industry by claiming that mortgage-backed securities were worth far less than what the market had perceived.

While she may have had a basis for her claims, her assessment was more sensational than factual. Mortgage-backed securities are quite complex instruments whereby loans are sliced, diced and packaged for sale to a global market.

With maturities extending 30 years into the future, it is unreasonable and unfair to assume that paybacks, even with high default rates will amount to what is currently priced into the market.

The lack of understanding of the underlying security or loans at the individual level has created uncertainty that has yet to be resolved.

For fans of the original "Star Wars" movie, think of the weakness in terms of attacking the Death Star. That one hole was exploited (we can debate the merits of doing so later) by Ms. Whitney and those like her.

If you were hoping that last week's stealth rally was going to continue, that didn't happen. Manufacturing data was atrocious here in the U.S., and even China gave horrible data on that front. Then, the NBER came out and officially declared the recession has been afoot -- in case you hadn't noticed. To show how much demand destruction there is, oil was down another $4.00 by 2:00 PM. All this data led to record lows on Treasury maturity yields.

Here are today's unofficial closing bell levels:
Top Upgrades & Downgrades

General Electric Co. (NYSE: GE) was hit on a research report predicting that tomorrow's GE Capital presentation will be a platform that will allow the company to reduce guidance further than it already has.

Yahoo! Inc. (NASDAQ: YHOO) traded up early on reports that a new deal between Microsoft Corp. (NASDAQ: MSFT) and Yahoo! may occur on a search pact rather than a merger. This was refuted elsewhere and it took the wind out of the rumor.

George W. Bush is beginning to realize he made some mighty big mistakes. He admitted today that he's sorry the stock market and economy have collapsed because it happened under his watch. And he thinks that there was an intelligence failure when it comes to those Iraqi WMDs.

He'd like us to believe that he was just a passive victim of all this bad stuff that happened around him. If he is really that clueless, I need help understanding how he got "elected" twice. In any case, there's plenty of evidence that Douglas Feith created the WMD evidence to please Dick Cheney.

And Bush repeatedly ignored warnings that subprime mortgages were being abused and that securitization was creating a huge risk for the economy. He also failed to apologize for two other memorable events during his presidency -- his August 2001 decision to ignore that President's Daily Brief called "Osama bin Laden determined to strike in U.S." and his famed New Orleans Katrina flyover, capped by his heck of a job Brownie comment.

Bush has left the U.S. in a sorry state -- and I'm sorry, but sorry won't cut it.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Over the long holiday weekend, I had a chance to do some much needed reading. Given my vocation, sometimes I like to read articles that have little to do with the markets or finance as a way of recharging my batteries.

Of course, even when I partake in this guilty pleasure, there really is no way to truly escape. Somehow every story has a link or relationship to investing that I can utilize in my stock-picking mission.

This weekend, it was an article critical of a Shape magazine cover featuring a bikini-clad Faith Hill that has import for individual investors. In this particular article, the author does a really great job of highlighting the battle of fitness versus self-image.

How exactly did the 41-year-old country singer get that body? Was it photoshopped? How about plastic surgery? Is it really fair to present her in that way without the caveats, if any? The image alone implies that this woman, a busy professional with young children, managed to eat right and exercise in a way that created the image you now see on the magazine -- and that you can achieve yourself.

Wow, what pressure. The problem, of course, is that Photoshop was probably used in this instance, and if not Photoshop, then plastic surgery for certain.

So what does this have to do with investing?

This morning I awoke to the news that Johnson & Johnson (NYSE: JNJ) announced a definitive agreement to purchase Mentor (NYSE: MNT), a leading supplier of medical products for the global aesthetic market -- namely, breast implants.

JNJ is paying $31 per share, or $1.07 billion in cash, for the company. The purchase price is about double what MNT fetched in the open market on Friday.

A premium price of that magnitude in this market environment is hard to believe, but I would not bet against JNJ here. They have their pulse on the market and a copy of Shape magazine on their desk. As the baby-boomer generation ages, plastic surgery looks to be a huge market. Fueled by images like those in Shape magazine, the market is more than worthy of a premium price.

The fact that MNT was valued at the purchase price as recently as June is telling. Yes, the economy is in recession, but the desire to improve self image is alive and well.

This is a brilliant deal for JNJ. The company enters a strong market with great demographics at a time of economic weakness. Taking advantage of a strong balance sheet and rich cash flow, JNJ is a winner in this economy.

Self-image issues aside, I like this deal.

Jamie Dlugosch is a contributor to InvestorPlace.com.

U.S. Federal Reserve Chairman Ben Bernanke Monday provided the markets with his latest -- and strongest -- hint about new plans to counteract both the credit crunch and the U.S. recession. Now it looks like the Fed may buy Treasury notes and bonds, and/or agency bonds, in an effort to push interest rates even lower and "spur aggregate demand."

"Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective," Bernanke said in a speech Monday in Texas. "The Fed could purchase longer-term Treasury or agency securities on the open market in substantial quantities. This approach might influence the yields on these securities, thus helping to spur aggregate demand."

Fed deploying unconventional tools

Bernanke's comments are the Fed's latest hint that the world's most powerful central bank will deploy a 'new tool box' and unconventional techniques that Bernanke has previously said most likely would be needed to help the nation cope with its most serious financial crisis since the Great Depression.

Moreover, although the potential actions announced Monday technically are not quantitative easing, they will have that effect, says economist David H. Wang. Quantitative easing involves increasing the reserves in the banking system after the Fed loses the ability to lower the cost of money from an interest rate standpoint.

There are few topics as popular on BloggingStocks as Apple Inc. (NASDAQ: AAPL), one of the original eight we focused on. In the past 52 weeks, the stock has fallen from a high of $202.96 to a recent low of $79.14 amid the greatest market turmoil in 80 years.

Everyone has finally agreed that we are in the midst of a severe recession, and Wall Street has punished Apple, the inventive high flying growth story, because of fears that a slowdown in consumer spending will stall its market expansion.

Black Fridays promise aside, the market is in a wait and see mode. In the meantime, after five consecutive trading days in the upward direction, Apples shares closed Friday in a shortened trading day at $92.67, down for the day but notably off its earlier lows.

A sixth up day was too much to hope for as the market is down, and Apple hit a Monday low of $89.00

So what now? Is the growth story over? I think that for those who have an interest in owning this stock, now is the time to buy. Given a P/E of 17 and a reported $27 in cash and no debt, could there be a better time? I think not.

"My Maserati does one eighty five,
I lost my license, now I don't drive."
-- "Life's Been Good," Joe Walsh

U.S. auto sales most likely will register yet another year-over-year decline when Big Three auto manufacturers report November sales on Tuesday.

But that's not to say that all segments of the auto market are in free-fall, revenue wise: sales of many high-end or luxury cars are doing just fine. Sales of many high-end luxury cars are flat or down just slightly this year, in contrast to double-digit declines seen in typical vehicle categories.

Ferrari's U.S. sales are down just 3%, Mazerati's sales are up 10%, and Rolls-Royce's sales have risen an eye-opening 32%, according to data collected by Autodata.

It's been a great decade . . . for the gentry

Economist David H. Wang said the luxury car statistics are consistent with a macro-consumption theme pervasive throughout the decade: for the most part, luxury brands and super-exclusive brands did well.

"One thing the decade's economic policies did accomplish was a substantial increase in wealth among upper income groups, especially the already wealthy and the super rich. Most people earning more than $300,000 a year have had their best decade ever," Wang said. "That's been very good for luxury product sales, like luxury cars, luxury homes, fine art, jewelry, and vacation homes. Unfortunately, the decade's income and wealth gains at the high end doesn't mean too much for broad-based consumer demand, and for the overall U.S. economy." Wang added that he does not have a rating on or an investment stake in any auto manufacturer.

As Douglas McIntyre wrote earlier, the United Auto Workers union is in talks with some of Detroit's big three automakers to put an end to the infamous "job bank" -- a program that allows laid off factory workers to report to work and play cards, read the newspaper, and maybe do a little volunteer work while continuing to be paid full wages and benefits. (Read more about it in this 2005 piece from The Detroit News.)

In defending the job bank before Congress, UAW president Ron Gettelfinger said that, "Since September of 2005 through September of 2008, we have lost 47,000 workers at General Motors. By the same token, during that period of time and with that loss, we have all but virtually eliminated our jobs banks at all three companies."

But The Wall Street Journal reports (subscription required) that there are about 1,400 workers in the Ford (NYSE: F) job bank, 1,000 at General Motors (NYSE: GM) and 500 at Chrysler.

That's down by a lot from the numbers of a year or two ago, but the point is this: before we start asking taxpayers who have nothing to do with the problem to start peeling 25 billion dollar bills, wouldn't it be a good idea to, oh, I don't know, make sure that all the people who are on the payroll are working?

It's easy to blame the unions for the company's woes, but the bottom line is that the fault lies with the corporate management, which agreed to outrageous programs and saddled the industry with enormous legacy costs because it had no impact on the company's short-term earnings and stock price.

All year long there has been one big question looming over America: is the country in recession, and if not, can a full blown recession be avoided? Well, according to The National Bureau of Economic Research, the country most certainly is in the midst of a recession, and has been since December of last year.

There has been a lot of debate as early as the start of the year over whether or not the country had already fallen into a recession. While we had not seen the official definition of a recession confirmed, several respected analysts had claimed the recession was under way months ago.

The officual definition of a recession is when economic growth slows for consecutive quarters. Despite this not having occurred earlier this year, billionaire investor Warren Buffet came out publicly as early as March 3 of this year claiming that America had already dipped into recessionary times.

"Agricultural commodities have been hurt in the recent turmoil," says growth stock expert Stephen Leeb. In The Complete Investor he looks at Mosaic (NYSE: MOS). a world leader in fertilizers.

"Mosaic has been decimated in price despite reporting record earnings. The company is the world's second-biggest producer of fertilizer components and the leading producer of potash.

"It's also the largest maker of processed phosphates, which gives it a lot of leverage to the rapidly growing markets of China and Brazil, and is an exclusive marketer of 1.2 million metric tons of nitrogen products.

"Since its high in June, the stock has lost three-fourths of its value and now trades at just 3 times next year's earnings. The sell-off came despite Mosaic's highest-ever earnings ($2.65 in the latest quarter vs. $0.69 a year earlier) and expanding gross margins (38.1% vs. 26%).

"The apparent reason was that those record earnings were slightly below some analyst estimates. Also, investors perhaps feared that farmers wouldn't be able to obtain credit to buy fertilizers.

"Once all the added liquidity puts these fears to rest, and given that the worldwide inventory of soybeans, corn, and wheat is forecasted to keep declining into 2009, we think demand for Mosaic's products will be strong.

"Long-term investors should use any temporary softness in fertilizer component prices as a great buying opportunity for Mosaic's shares."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.

A battle royal is shaping up in the world of cloud computing between long-standing dominant software giant Microsoft (NASDAQ: MSFT) and its biggest threat of the past few years, internet runaway Google (NASDAQ: GOOG).

BusinessWeek is reporting that Microsoft plans to build 20 new data centers over the next few years to serve corporations large and small which would prefer to store their data in a secure environment and be able to access it over the internet. Google started along the same path several years ago with the same goal.

The data centers are likely to cost as much as a billion dollars each. Companies opting to use this type of service will be delegating the acquisition, maintenance, and security required to store large amounts of data while preserving capital for core business activities.

One novel approach in Microsoft's newest facility is to fill the 700,000 square-foot floor with prepackaged shipping containers instead of acres of racks containing servers. Each of the containers can hold 2,500 servers, and the floor can hold up to 224 containers. That's a potential maximum of 560,000 servers.

Johnson & Johnson (NYSE: JNJ - option chain) shares are lower today after the medical giant announced it would acquire breast implant company Mentor (NYSE: MNT). JNJ put the price for MNT at $31 per share, more than 90% above Friday's price of $16. This kind of buyout activity could signal a couple things. First JNJ is in pretty good financial shape and second that many stocks are undervalued and that resilient companies like JNJ might be looking into making moves in the coming months. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNJ.

JNJ opened this morning at $57.66. So far today the stock has hit a low of $56.45 and a high of $57.82. As of 12:40, JNJ is trading at $56.49, down $2.09 (3.6%). The chart for JNJ looks bullish and S&P gives JNJ its highest 5 STARS (out of 5) strong buy ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just three weeks as long as JNJ is above $50 at December expiration. Johnson & Johnson would have to fall by more than 11% before we would start to lose money. Learn more about this type of trade here.

JNJ hasn't been below $52 at all in the past year and has shown support around $56 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MNT. He does control a bullish hedged position in JNJ.

As Peter Cohan wrote this weekend, sadly, some folks were killed over the holiday weekend due to what could be easily argued as Black Friday madness. In the zeal for saving a few dollars on cheaply-made, bargain-basement disposable consumer goods, one man was trampled to death as he opened the doors of a Wal-Mart Stores, Inc. (NYSE: WMT) store, while two other people were shot to death outside a Toys R Us store. Joy to the world, the materialism has won.

Although I enjoy covering the Black Friday event every year, the industry-made madness has become such an event that actually dumps respect for human beings into the garbage disposal, so that those crazy souls wanting to save 30% on shoes or a flat-screen television can get their fix.

I mean, is this what the holidays have come down to? The New York Times has a decent perspective on this. But, of course, America has always been about materialism and consumerism. Those are the factors that have made the U.S. the reigning economy worldwide. It's a free country for anyone to do as they wish, from billion-dollar companies to consumers with change in their pockets purchasing power. If we're all trained like Pavlov's dogs come the day after Thanksgiving -- credit cards in hand at 5:00am -- then it's no surprise some folks will die for the self-indulging greed of other human beings. Fa la la la la, la la la la.