Maurice, trouble is, there's an internal inconsistency to your argument:
Part 1
That's where we are now. Panic around. Deflation worries. Margin calls. Hedge fund crashes. End of the world demands, which always are popular at the turn of a century. With Y2K disease going to kill more than…
(My comment: Yes, everything eventually passes. But both Rubin and Greenspan have testified before Congress that we are at the most dangerous financial precipice since WWII.)
Part 2
I'd say that we are down from Dow 8000 in Feb 1998 by only 10% and nearly 20% from the over excited high earlier this year, and that is just a nice, normal market tidying ding. Hardly a crash. 20% up or down in any year is totally normal for stock markets. So we are at a totally normal position.
(My comment. Fair point. And when you add to that the realization that we were at historically high valuations in the U.S. markets, the decline to date really doesn't appear so extreme. We just have forgotten they occur.)
Your Conclusion:
I suppose there can be a drop in the Dow still, depending on how panicked people are, but sooner or later, people will realize the world isn't ending.
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Mighty Q $80 by 31 October!
My conclusion. Yes, the decline will end. But if the U.S. does go into recession, it won't end until the market overall is a lot lower.
No one knows for sure. That's for sure.
Doug, Chicken Little2
(Though a rally sometime this week seems likely to me)
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