Zeev, this would be a serious decline from these levels. What fundamental reasons do you think will bring the market down to new lows ?
Falling dollar ? Inflation ? Rising interest rates ? Inability to reign in budget deficits ? Tougher earnings comparissons in 2005 ? Profit squeeze related to inflation in commodities ? Tax cuts may not become permanent ?
ZH - The effect of the global economy of another collapse of that order would have really noticeable effects. Pensions for instance in the major oecd countries would be jepardised just as the baby boomers started to try to collect.
Global unemployment would go into overdrive starting with the Germans and the French never mind the US. As mad as the religious ones are I don't think any of wants to be around to see how the Germans cope with the massive unemployment that would accompany a drop in the markets of that order.We saw that show sixty years ago and it was pretty unpleasant.
Then there are our friends in China. So long as their economy keeps expanding so good but if we get a global collapse of the kind you are talking about then lets just say they won't be OK and you don't want to be around if that happens.
All in all one never wants to say never after Greenspan broke the back of the economy by putting up interest rates through 1999 and 2000 since it could happen again but the stakes are now much higher. Prosperity or something else if you are right and the smething lese will mean that it won't matter if you are all in cash since you won't be able to get your money as the banks won't be open neither will much else.
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