Today's subject: Last week, the Dow dropped by about 5% in three days' time. Many news headlines tied the drop to President Obama's remarks on financial-industry regulation, but I'm not convinced that was the principal reason for Wall Street's choking fit. And if it was, maybe it shouldn't have been.

There's actually a far better reason for the stock market to gag: A lot of last year's market action could simply represent a massive sucker's rally. The heady gains in many unworthy stocks seem far from sustainable, which means investors could be in for a rude awakening.

Why you should be indignant: Our economic crisis and ensuing Great Recession stemmed from overwhelming speculation (and idiocy) at work in our economy. Unfortunately, in the aftermath, scores of people simply seem to be searching for the next speculative investment.

 Are financial firms like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) really out of the woods? Why the heck were shares of AIG (NYSE:AIG), which remains 80% government-owned, bid to the stratosphere last year? Why were people trading worthless stocks of bankrupt "old GM" and Lehman Brothers? Bankrupt companies are, by definition, worth nothing. Stocks in companies that will unquestionably face hard times, staggering beneath huge amounts of debt, also surged. Some market pundits may have seen a "flight to quality," but I just saw a flight to catastrophe.

Mounting examples suggest that our supposed economic "recovery" is slow, if not nearly nonexistent. A 10% unemployment rate poses a huge hurdle to a true recovery. Last year's stimulus has been a bust thus far when it comes to creating jobs. Companies like Wal-Mart (NYSE:WMT), UPS (NYSE:UPS), and bubble poster child AOL (NYSE:AOL) are still cutting positions even now.

Existing home sales took a nosedive in December, after the urgency of the government's stimulating tax credit went away. Foreseeing this didn't exactly require rocket science, since the government's interference wildly distorted the market.

Still, many people keep calling for more government spending. Our nation can ill afford such an outlay, given its astronomical deficit and debt. (The Congressional Budget Office recently announced an estimated $1.35 trillion federal deficit for this year.)

Too many suckers are still spinning the wheel on all manner of short-term fixes and short-term gains. What about the long term, where we'll hand our grandchildren the bill? As for the suckers grabbing up speculative stocks, they'll have a far shorter wait to see their capital vaporize when reality takes its toll.

What now?
Investors need to put their capital into companies that actually have a shot at real growth and success, instead of speculative, debt-laden garbage. Companies with strong balance sheets, new technologies, and responsible management teams that run tight ships for the long term should be the gold standard. Apple (NASDAQ:AAPL) may be a very good example; it has a strong cash position and products that resonate with consumers.

The speculative mind-set running rampant in our marketplace, driven by dreams for a quick gain here or there, and completely disconnected from economic reality, has to stop. We already know that back-to-back asset bubbles drove our economy into the ground. Why, then, is everybody hoping for a return to bubbly "business as usual"?

The financial crisis should have been a massive wake-up call, bringing prudence, ethics, and long-term thinking back into fashion. Instead, too many investors have just kept hitting the snooze button. I guess they like the dream better than reality. But they can't stay asleep forever. Suckers, it's seriously time to wake up now.

Wal-Mart Stores is a Motley Fool Inside Value recommendation. Apple is a Motley Fool Stock Advisor pick. United Parcel Service is a Motley Fool Income Investor selection. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.