Every big Bear market has started from a minor correction. Is the current situation (little Cub) going to grow into a full blown Bear market?
Let us understand what is going on in the world:
1) China - overstimulated property market by govt, govt cutting back now
2) Europe - PIIGS in bad shape, officialy in bear market territory (20% correction from peak), Euro getting hammered against the dollar, banks in Spain failing. LIBOR rate rising
3) US - huge govt bailouts, 165 billion bailout planned for private pension funds
Technically things are very bearish. Fundamentally things are very bearish.
Let the bear market complete this corrective action. There is no point in the governments spending trillions of dollars in trying to stop the primary bear trend of the market.
Tuesday, May 25, 2010
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