It's Only Just Begun

Economic news continues to dominate the headlines week-in-and-week-out. Sundays have become "dooms day" as bad news breaks before trading begins in the Asian markets.

This past weekend's bomb? Lehman Brothers and Merrill Lynch are collapsing. Standing in the wings is insurance giant AIG, which is warning of impending doom. Today AIG saw its stock drop 61-percent, the largest single-day loss by a major insurer.

In response, the DOW fell 504 points, the single worse day since 2001.  Wall Street pundits would like us to believe we have witnessed the bottom, it can't get any worse. Don't believe it.

Martin Weiss and Mike Larson writing for "Money and Markets" observed in an e-mail alert today,

• The Dow is still not far from its all-time peaks, with a lot further to fall. Our forecast is unchanged: 7,200 on the Dow.
• The recession is still in its early stages. Expect outright contractions in GDP in the coming quarters, and despite a lot of talk and some action, don't count on the government to turn it around any time soon.
• America's oversized debt pyramid has just begun to wind down. It could take several years to clean up the mess. (Emphasis added)

Until analysts and "experts" stop fooling themselves (and the public) and start to recognize the depth of the credit crisis confronting the country, we will continue to see false hope replaced by near panic as one giant after another falls.