| Imho,
- The banks are getting slaughtered right now with all the ABCP problems.
- The banks are writing down billions in ABCP losses right now
- Has caused a credit crunch, and banks have shored up loans
- Has reduced access to credit and cash by smaller companies
- Banks are selling liquid market assets to cover some of their losses.
- This is causing downward pressure on the markets.
- Increases short interest.
- Fed will be forced to raise interest rates in December to intice foreign investing in the US.
- Higher interest rates will worsen the ABCP problem, and will occur during the time in which banks are recording Q3 earnings (which will include the write downs).
- A handfull of companies have being carrying the DOW for the past year. GOOG, BIDU, BRCM etc.
IMHO, we still may be in a secular bull market and there is a lot of cash still sitting on the sidelines looking for a place to invest. However, now is a good time to be short or cash on the market until the volatility is sorted out.
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"None are so hopelessly enslaved than those who falsely believe they are free" Johann Wolfgang von Goethe |