Here's a date you need to remember: December 29, 1989.

That was the day the Japanese stock market, the Nikkei, hit 38,915. Last week, the Nikkei rose strongly -- and reached 13,214.

The decade-long downward turn of the Japanese stock market should be discomforting, like a voice somewhere which says "if the world's second largest economy can be flat for more than a decade, could that happen in the U.S.?"

The answer, of course, is that it has.

As mentioned last month, the DJIA hit 41.22 in 1932, essentially back where it began in 1896. The benchmark 300 recorded at the end of 1928 was not seen again until 26 years later when the Dow closed for the year at 404 in 1954. The yearly close didn't top 500 until 1958 and it wasn't until 1972 that the year-end average finally reached 1000.

For the past year we have watched dot-coms swoon and now even real companies with real businesses are beginning to see share values melt away. The drop in the Dow during the past few weeks should not comfort anyone.

However, not only have Wall Street indexes fallen, interest rates have generally trended downward and may go lower still. This is the good news.

In mid-1999, many people laughed when NAR's then-chief economist, Dr. James. F. Smith, said that mortgage rates would fall within a few years to rates unseen for decades.

Smith, reported NAR, "expects fixed mortgage rates to decline to 5 percent by the end of 2002, which will help to ignite the housing market at the end of what he expects will be a short-lived recession, with the next expansion beginning early in 2003."

Go back to Japan. The Bank of Japan reduced the discount rate for banks to nearly zero in March. Also in March, our Federal Reserve lowered the discount rate for banks to 4.5 percent.

If you're an investor, you want to be in the stock market when values are rising and dividends are growing. But if values and profits are both declining, then you might want to put your cash into bonds. Given stable real estate demand, more money in bonds leads to lower mortgage rates.

So, are rates definitely, absolutely, and unquestionably headed south?

As is always the case when predicting future interest rates, there are lots of theories -- but no guarantees.

That said, it's hard to ignore what we are now seeing on Wall Street.

Stocks, of course, "never decline in value," they are only subject to a "correction." For what it's worth, we may soon see a whole bunch of correcting.

If the new ideal is "profit" and not "growth somewhere in the distant future," then a rational corporate leader will want to maximize net income. Such thinking suggests several trends:

• Downsizing -- In plain language, layoffs, to get rid of divisions and operations which do not produce sufficient profit (or any profit). One approach will be to sell or give assets to employees, thus maintaining the illusion that a given site is active.

• Preserving Dollars -- Look for a reduction in corporate venture capital investments, especially online. In the past few years many companies have invested in various Internet sites. This is fine as long as capital is available and profits are rising, but such investments may no longer be prudent as Internet losses become tough to ignore. There aren't too many companies that can lose $10 million or $20 million a year on an Internet venture, or any venture, and just allow the tab to keep running. The best example to date is perhaps Disney, which has announced that it will close much of Go.com and write off nearly $800 million.

• Phantom Sites -- Look for more of these -- it costs essentially nothing to leave up dead sites and emit an ongoing stream of electronic news releases.

What will be the effect of reduced corporate profits, lower share prices, and major Internet and terrestrial layoffs? The opportunity to restructure selected companies and once again increase incomes and values.

In the meantime -- and there are no guarantees, of course -- perhaps Dr. Smith will be right and interest rates will fall to levels last seen when today's grandparents were first-time buyers.

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