Who's Not A Bear Now

Suddenly everyone is a bear. Now we have George Soros saying that the world was facing the worst financial crisis since World War II and the United States was threatened with recession. "The situation is much more serious than any other financial crisis since the end of World War II," Soros was quoted as saying. He said over the past few years politics had been guided by some basic misunderstandings stemming from something that he called "market fundamentalism" - the belief financial markets tended to act as a balance. "This is the wrong idea," he said. "We really do have a serious financial crisis now."

Asked whether he thought the United States was headed for a recession, he said: "Yes, this is a threat in the United States." He added he was surprised how little understanding there had been on how recession was also a threat to Europe.

Things can look ok at 13,300. At 12,600 you want to buy on weakness. At 12,000 everything looks expensive. At 11,700 you swear you never want to touch stock ever. Its the same, you can replay that in all markets: the Bursa 1,520 looking good for a CNY and election rally. At 1,500 govenment won't let it fall, they need to boost market for election. At 1,460 we will say "don't buy now, sure regret". At 1,420 OMG very oversold already, pity no more funds to buy. At 1,350... all you can hear are swear words.

This is not to piss people off. I'm a bit lucky to call for a sell as the Citigroup results and writedowns looked more than just bad news, it was a huge catalyst. Markets will go on being overbought or oversold till a proper catalyst comes about. I was especially uneasy with the US$4bn provision for consumer debt writedown. A correction can be a temporary thing if it was a minor issue. This is big, its the terrible twins: inflation and credit bubble being pricked. Good thing is we are falling fast which means we can reach bottom faster. But we are not there yet, stay tuned.