New era...

The recent makret scares and subsequent occurences have revived the memories that haunt investors every 6 years or so. Many investors and journalists are removing the dust form the Bear flags and getting them ready to fly them up high. After all, Wall Street in the last month has been showing a lot of th signs that it showed on previous important downturns. But is there a crash coming?

Most would venture to say that there are huge problems ahead for the US markets. I remember the "soft landing" discussions last year and how many analysts were expecting the economy and the markets to fall back a bit. But then everything that was said was forgotten, the last squeeze of the housing bubble erased all doubts about the market and money poured into all types of investments. Today, we are faced with a serious problem in the credit sector where it will only get worst due to the high risk-taking leveraging done by hedge funds who took bets on CBOs and other derivatives. Most economists would agree that a correction in that part of the market is due, and I agree with them. But I do not believe that stocks are, or should, be heading for the gutter.