Hunt for Bottom

The situation in the financial markets is much worse than what most people think. This is one in a century crisis and I doubt whether the levels like 3200,3000 would work in times like these. Yet another time market would prove that its bigger than any individual being.

This time i think its better to leave the market decide its bottom rather than judging the bottom. For all the froth and leverage that existed in markets this crisis had to come and it was just a matter of time of when it was going to happen, and its happens today.

The leverage used by financial giants like lehman and morgan are too big, in some cases 40 times of their net capital. To give an idea of how big the mess is, The amount of CDS( Credit derivative spreads )that is out there in the system is above $1100 trillion. The combined GDP of world itself is less than $60 Trillion. So no doubt the mess is too big and it will take some unprecedented measures to clear it.

All world markets are highly over sold and there is a high possibility of a bear market rally anytime. But most people who are stuck at higher levels would use this rally to sell of their holdings.

P.S : Before the current crisis even ends there is another big threat waiting to hit markets, its credit-card defaults in US and soured debt that could further undermine the financial system. Be prepared to for the worse.