Wall Street: A Castle built on Quick Sand?

When you hear stories like this one, amongst a myriad of others, combine it with Madoff and you start wondering if the financial 'American Dream' and Wall Street are simply castles that have been built on quick sand and will no longer stand on their own going forward. The banks and brokers are essentially doomed as indicated in their almost non-existent equity prices that continually approach 0. The idea of the American who could purchase whatever they wanted to on credit is pretty close to a dream these days (or a nightmare?), and the once stalwart investment known as your home or real estate is turning out to be a squishy little bug - as reported here ("Median housing prices in the Fort Myers metropolitan area have plummeted from $322,000 in December 2005 to less than $107,000 in December 2008, the Obama administration notes.") I find it interesting nonetheless that everyone keeps talking about 401Ks, IRAs, blah, blah, blah. We've just had a period of over 10 years where the stock market cleaned us out, yet here we go again: "buy paper so that others can work and you can hopefully become rich." It's absurd. Just because the markets performed exceptionally well between 1980 - 2000, is no indication that they will, yet I think we all want to believe that will be the case. Selective memories? This market will get a lot worse before anything improves. Next in line to go: retailers - one of the largest employers in the country. And, with that, goes jobs - millions more of them. And with that, a much weaker consumer, i.e. significantly weaker sales... am I talking myself into a vortex? It's coming, but man do I hope that I am dead wrong in my pessimism.