Now that markets have crashed...what NEXT ????

Markets have crashed beyond belief......

Low on Dow was 7773.71...far cry from 14,168.50 only a year ago....a 45.13% decline......

Let us analyze if 45.13% decline is justified based on fundamentals of any economy world wide...Unemployment in most developed economies are between 6.5% to 7.5%......which is only a 1% LOWER than US & Canadian NORM.........

So why 45.13% decline in stock markets???

Well....some economists are predicting an 8% unemployment when everything is said & done in US downturn.......

So ...even if we take a worse case scenario..which is IMPROBABLE in my thinking of 8% more like 7%+......it is a RECESSION.....

Recession has NEVER created a 45.13% decline in stock market...usually 20% to 30% decline is more like it......

So..Why this carnage of 45.13%.........

Because ...most media & analysts are taking this "financial crisis" into an "economic crisis"which they are factoring a DEPRESSION......

I challenge this assertion completely........

This is a financial crisis ONLY ...where Banks are caught with their STUPIDITY & GREED with a callous disregard to working RATIOS......

I firmly believe that this financial CRISIS is on its last LEG...........

Every country is involved in INJECTING liquidity on a massive scale.....details of which is EVIDENT daily......

Pakistan has reduced the deposit ratio for all banks so they can lend more....from 9% deposit ratio to 7% can pump lot of liquidity in any system.....2% of trillions is lot of money......

There is a Hysteria on TV & Newspapers and shorts are playing this crisis to the hilt....good for them......

If level headed investors & traders wants to sell AAPL,RIMM,LDK,SOL,IBM @ these prices .......then do NOT blame CNBC,Cramer,WSJ...they are NOT known for investing SAVVY...

Try to understand the fundamentals of economy which IS pretty healthy & companies which have growing business & BILLIONS in balance sheet.......

Guess what ...we are FOUR months away from housing bottom.....in my knowledge based OPINION.....

Markets anticipates housing turnaround...which IS the root cause of this "FREE MONEY culture"

Markets are "on the verge of a major TURNAROUND"

All the financial problems have been played UP to the hilt......

So.....

You have a choice of taking cues from momentum traders who change their mind every 5 minutes or start looking @ biggest bargain since 1930....

CNBC is the biggest "culprit" in playing UP all the issues from 4AM to 10PM...not a service to investors/traders......

45.13 % decline has exaggerated all the issues to the MAX......

Financial crisis is coming to an end ........

All the policy decisions is/are ready to be implemented.....

4 weeks from now ...all the talk will be on CNBC as to how much CREDIT has eased & 2,5,10 year rates & LIBOR are near LOWS......

So ...you can be an investor and show faith in many companies who are sitting with $billions...like MSFT $23 Billion ,AAPL $10 billion,RIMM $2 billion......these are serious change to continue in their growth path....

It is TIME to get away from GLOOM & DOOM talk......

Great companies are selling @ record LOW prices.......

What are you waiting for......

All Clear.......

Then stock prices will be 25%+ HIGHER.......

Please do your OWN due diligence & find companies you are comfortable with.....Investing is NOT selling @ low & buying @ high.....it is REVERSE.....

Think 6 months from NOW.......

All this doom talk will be GONE then......

BLOG does NOT give buy or sell.

Saleem