ajtj.....
If I am reading both of you correctly (in Zeev's case, I speak no Hungarian), you both see this as primarily as a valuation correction as opposed to an economic one. If so, I disagree, although I tend to agree with ajtj's more bearish views for the immediate future in the market.
I think the bear started off as a valuation correction from altitudes formerly seen only in Star Wars movies. In large measure it still is about valuations, but the economic situation is deteriorating and causing valuations to be pared back even more with a continuously dropping target as we go down. I think the economy is already in a recession once again and it is one that will be very difficult to work our way out of since there is no driver that can do the lifting.
Hopefully, the recession will not get too deep but that is far from a certainty in my mind since I expect the recession to be a global one, with Europe faring similar to ourselves, but Japan and South America faring much worse, with financial dislocations and crises a very real possibility in both places. Finally, the chance of a series of real problems in our own money center banks and other financial entities cannot be ruled out, with a "perfect storm" a definate possibility.
I do not now see a depression in our future, but I do see the chance of a severe and long lasting recession that would be very painful and which would justify the figures the charts are pointing to.
Just my myopic opinion, though.
mlsoft
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