Remember the date October 10th for two reasons. First in 2007 it marked the highest close of the Dow Jones Industrial Average (DJIA), over 14000, but in 2008 it will mark the lowest opening since 2003. The DJIA has fallen by close to 40% in just one year, which is almost unprecedented...the only other time it ever happened was in 1929 and the atmosphere was very black.
Only months ago the pundits and economists were debating whether or not we were in a recession or not. We are without a doubt in the midst of a crash. The DJIA and most other indexies have plummeted by almost 30% in just 10 trading days. This is the defnition of a crash and it is only going to get worse, not better, over the next months and probably years. The $700 billion bailout plan is like putting a band-aid on a severe laceration and the government has no idea what to do except to react in times of emergency.
It is time to face facts and realize that the government is not going to do anything to help or prevent things from worsening. When the G-7 meet this weekend all that will happen is they will all collectively soil themselves. Instead of drastically cutting interest rates, nationalize struggling companies, or doing anything they will just come out publicly and say we need to wait for things to pan out.
This market will reach its absolute bottom in January of 2009 when the economy fully collapses under the tremendous pressure of the credit crunch. When people begin to realize that they can not buy the usual gifts or travel to the usual places is when everyone will begin to realize that this is a true collapse of the stock market.
There is no bull or bear...only utter despair
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