Ladies and gentleman, this is a world-wide deleveraging event the likes we've never witnessed. The next phase will shift from the epicenter (US financials) to other countries now. Watch as the UK picks up the falling dominoes momentum (HBOS is the next to go). Don't kid yourself though, the US is far from done with this crisis. We haven't even witnessed the worst of prime MBS, commercial real estate and corporate defaults. Small banks across the country will start failing over the course of the next two years culminating in over 1000 failed banks. Corporate debt will default and those rates will start to spike in the next year as well. The equity markets aren't even close to representing the underlying fundamentals.
Prediction:
DOW - 9,000 - 9,500
S&P - < 1000
This should happen within the next 12 months, but it may take a bit longer. Not sure I would call that a bottom though. Fundamentally, it should go a lot lower.
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