Plunging stock prices, having already devastated the "paper" value of investor portfolios, are increasingly having tangible impact on Americans' lives whether they own stocks or not.
In Washington, D.C., a charitable organization expecting $500,000 in donations from family foundations received only half that, forcing a clinic it funds to abandon plans to give out HIV-prevention materials.
With his mutual funds sinking in value, Florida retiree Bob Latcham has returned to work. The former school principal is doing background checks for a placement service.
A Philadelphia charity that counts on gifts of stock has cut 1-1/2 slots from its already small workforce and has sharply curtailed the number of people receiving its annual report.
These are just a few ways that one of the worst bear markets in the nation's history is now starting to affect the fabric of American lives. Since their peak in March 2000, stocks have lost about $8 trillion in value, an amount equal to the annual economic output of Japan, Germany, and Canada combined.
The past two weeks in particular have been the financial equivalent of a train wreck. The Dow Jones Industrial Average has shed more than 1,200 points, ending just above 8000 after a 390-point drop Friday.
Many Americans know about these losses because they get monthly statements from a brokerage account, mutual fund, or maybe a 401(k) retirement plan. And even the millions who have no stake in the market direct or indirect are being affected.
That's because everything from jobs to government tax revenues is impacted somewhat by changes in stock market wealth.
Wall Street's slide has made some economists start to worry about a "double dip" a return to recession as battered share prices prevent a recovery of business spending and cause consumer confidence to weaken.
A decline in capital-gains tax revenues, meanwhile, is hitting many state governments.
Or consider the education system. Many colleges and universities ended their fiscal year on June 30. As they assess their portfolio results, many will be looking at double-digit declines over the past two years.
"This will be painful," says John Griswold, senior vice president at the Commonfund Institute, which manages $30 billion for 1,600 nonprofits from its base in Wilton, Conn. To date, most of these organizations have resisted making cuts based on the stock market, he says. But, he says, "There will be some serious cuts in ... operating expenses this coming year. Some will need Draconian plans."
At Berea College in Kentucky, for example, investment officers are on edge. The small school does not charge tuition or room and board to educate 1,570 underprivileged students from Appalachia. Three quarters of its operating budget comes from its endowment, which is down 17 percent in two years. If the market continues to drop, the college will have to freeze hiring and cut its payroll through attrition.
"We probably would look at fewer students, too," says Ron Smith, vice president for finance.
The National Philanthropic Trust in Philadelphia has already cut its staff and overhead everything from magazine subscriptions to travel to conferences. The organization, which makes grants to other charities, gets most of its money from gifts of appreciated stock. So, when the market falls, the size of its grants shrink.
In a way that's also what's happened to La Clinica del Pueblo in Washington, which serves the Latino community. It counts on the endowments of private foundations to fund about a third of its programs. Last fall, one of those foundations was promised $500,000 by donors; actual gifts totaled only half that amount.
"That forced us to make some difficult decisions," says Alicia Wilson, the clinic's director of development. One example: The group abandoned a proposal to provide a 2,000 people with HIV-prevention materials.
The bear market has also put a damper on the dreams and aspirations of many young business people. Historically, about 300 companies have raised money in the capital markets each year through Initial Public Offerings (IPOs). With the market down, last year there were only 48 IPOs. So far this year, there have been 55. "Now, companies must have a compelling story to attract investors," says Kyle Huske, a market analyst at IPO.com.
In fact, for businessmen, the stock price of their company is often viewed as a barometer on how they are running the firm. When the market is going down, they become reluctant to invest in their own business, including new hires.
"It makes them reluctant to go out and hire people," says Larry Engelgau, general manager of Management Recruiters International (MRI) in Portland, Oregon. "You have to go back over 20 years to find employers as reluctant to fill positions."
One of the market's harshest cuts has been on older Americans and those approaching retirement. Economic statistics show that even in a so-called "jobless recovery," the number of older Americans joining the workforce is on the rise. Much of this is related to falling portfolios.
That's what's happened to Bob Latcham, who retired from the Broward County Public Schools in 1993. "I need to work for economic reasons," says Latcham, now working for a placement service. "One of my sons still has two more years of college left."
But the gray-haired former principal's biggest concern is what happens in a few years.
"Hopefully within a five-year period my portfolio will be close to where it was before and I can pull out of the market," he says. "But to do that now would literally be suicide."
Not everyone can return to work like Latcham. Joseph Barker, a retired Miami Beach postal worker is on a prescribed medical regimen that involves being near an oxygen tank.
"This is not the way retirement is supposed to be," says Mr. Barker, who has watched his investments lose most of their value over the past year. "I made arrangements to be comfortable in my golden years and markets have betrayed me."
Mary Wiltenburg in Boston and Jennifer LeClaire in Miami contributed to this story.