I hope everyone had a good Christmas. I’ve been slow to write about the stock market for two reasons. The first is that it would ruin the holiday cheer, and the secondly this is a long developing story that I have written about for a year now and will probably write about for the next year.

But we’ve reached an important threshold. It’s now down 20% off the peak, meaning that we are in a Bear Market. We haven’t been in one for a decade, and there hasn’t been a nasty one for at least two decades, so let’s run down what that means.

Where is the bottom?

Bad stock news requires a picture like this. Apparently, these traders still exist.

This is the first question everyone will be asking. If you go by tradition, you can reasonably expect that a solid 30-50% will be shaved off the market. We’ve already lost 20%, so the worst could be over. I always use S&P500 figures, so if you are used to the Dow 30 the numbers will be a little different.

The peak was 2930, so we can expect the bottom to be around 1500-2000. There are other ways of looking at it based on where the market paused on the way up, known generally as charting. The theory here is that there are two types of investors, those in it for the long haul and those who come in when there’s a bull trend, known as “momentum players” or investors. The last stable place that we had might be around 2180, which I think is the short-term bottom.

One feature of a bear market is that it keeps moving down slowly no matter what happens, really more or less sideways. There isn’t a lot of momentum one way or the other. It is very likely that something around 2180 will be found fairly quickly and we will spend the next year drifting lower.

How long will it last?

Reading between the lines is not all that hard.

Typically, one or two years at most. That’s the good news. The last one was only 1.3 years, from 2007-2010, and the one before that was 2.1 years, from 2000-2002. There will be a time to get back in, and it may come up sooner than you thought.

Patience is the key. You can’t time the market, so don’t even try. If you didn’t get out already, you still have time. If you are young and looking at your 401(k), don’t take everything out – in fact, if the worst is indeed over, you can move some back in very soon.

What’s causing this?

Getting anything done? Anything?

Trump. I know, it’s unfair to blame presidents for everything. Certainly, every bull market has to end sometime and this one was getting to be the longest run anyone could remember. There was definitely a bubble, and it had to come to this end sooner or later.

But the kind of instability caused by massive deficits and a trade war certainly pushed it all over the edge. Presidents can only do so much to create a bull market, but they can certainly screw up. The best thing I can say about Obama in terms of the stock market and large US corporations is that he didn’t screw up. Yay! It may not sound like much, but it allows the business of America to get on with business.

We’re not doing that right now. That’s the immediate problem.

How will this right itself? Keep in mind that there is a lot more bad news coming, at least if you do not like instability. Markets do not like instability. The blame will pile on, and most of it will be fair. Some will not be, but it’s over for him.

What will happen with Trump?

This is the unforgivable sin to Republicans, so he is toast. They will turn on him like you can’t believe.

Will there be a recession?

Not everyone can do this.

Probably. The best sign of a recession is an inverted yield curve, as we’ve discussed before. That hasn’t happened yet, but probably will. A recession is likely to be short, however, and keep in mind that there has been a shortage of workers particularly in skilled positions. So this may not be a very harsh recession and may actually do us all some good.

We can’t make good predictions about the job market until after about March, given that the annual mini-recession in the depths of Winter will be on us shortly. Any downturn effects we see now could be temporary, and real signs of weakness will be lost in the noise (aka “seasonal adjustment”). That will be my main focus, but don’t expect anything solid.

Should I panic?

As Groucho said, “This is no time to panic. There’ll be plenty of time to panic later.” if you’re still in stocks, you rode this down and it’s a bit too late. It’s probably too early to move back in for most people. So there’s not a lot anyone can do.

We’re waiting for the noise to die down. You always know you are really at a bottom when everything becomes quiet. So the best advice is to not scream and shout but to listen, to not move but to observe.

Is it really all Trump’s fault?

Rod Rosenstein. He won’t end his career for Trump.

Look, the Mueller investigation is moving into high gear. It’s only going to get worse for him, and as everyone is listening for the quiet that signals a bottom there will be only that noise. Veterans will be more and more angry at him for that. Whether you or I think it’s fair, Trump is going to be blamed for all of this.

History is many things, but kind is not one of them. He screwed up. It may not be entirely his fault, and it isn’t, but he didn’t make things better.

Where all the money from China winds up going and what happens to kick-start global trade to get us out of this and increase demand are things we simply do not know right now. With good leadership we would, or at least have confidence that nothing stupid was going to happen. We don’t have that now. So whose fault is that?

What’s it all mean?

Not that much, really, in the long run. Fasten your seatbelt, the ride is not over yet.