The world's head was spinning faster than Linda Blair's; its markets falling quicker than a dead body off the Jersey bridge; the wailing was louder than Jamie Lee Curtis's famous screams in Halloween.
Look at the carnage since August 4:
Dow down 15%
Nasdaq down 23%
FTSE down 13%
DAX down 17%
But to ulitmate lows? Let's look again:
Dow down 31%
Nasdaq down 35%
FTSE down 32%
DAX down 37%
Asian markets were hit even harder: The Nikkei has dropped 30% since August 4, but had dropped as far as 47% at its ultimate lows. The Hang Seng in Hong Kong was the worst performer of major, though. It has fallen an amazing 36% since August 4, and a whopping 53% at its ultimate lows.
Not even India's Bombay exchange has fallen as far as the Hang Seng.
All of this was precipitated by greedy (or stupid) international banks who got themselves into a whole once the U.S. consumer started defaulting on loans. Then, the dominoes really started falling. Banks couldn't pay other banks back who then couldn't pay other banks back, as these dirty subprime mortgages circled the globe like some deadly epidemic, a black plague carried in the tiny flea-like subprime-packages that flew like carrier pidgeons across the world.
Credit siezed up, a rigor more profound than any market had yet dealt with.
Unprecedented indeed...
And now, with U.S.'s first African-American president, Barack Obama, the world is looking for a historic solution. And it can't come fast enough.
All the main news networks are talking about this amazing moment... But all the financial analysts are asking what's he gonna do now?
CNNMoney: "New President, Same Problems"
Forbes: "Political Hope Can't Lift Street"
IHT: "Yes We Can? Markets Wait To See What Obama Can Really Do"
BBC: "Funding the Promises"
WSJ: "Turmoil in Economy Dominates Voters' Concerns"
The real answer is that Obama can talk about change all he wants, but it'll take a long time, and a lot of effort, before we see it happen. The good part is that people actually believe that change is here, and in market-speak, "Confidence is king."
It's all about psychology... When markets turned lower, panic-selling forced stocks across the board even lower.
Now that folks have a bit of optimism, things may start to look up. Just reference the nice market day we had yesterday: up more than 300 point on the Dow. It remains to be seen just how strong this newfound confidence is, but we should know something by the end of the week.
I expect that if we end in the green, we may have put in a market bottom. If we don't, a retest of Dow 9,000 is in the immediate future.
