6)Thouhts on the market over the past couple of months

So, now to the business at hand. What a week in the markets. I was surprised by the close on the Dow today. It seemed weak and indecisive all day long, as if it new with all the bad news that it should not be up but was trying to shake off the past two days. Not convincing to say the least, as the volume was anemic. The numbers for the week are painting a pretty abysmal picture going forward, unemployment at 14 year highs with almost 10 million unemployed . CEO's are saying that earnings are falling off a cliff, the Nikkei was off another 3.5 % , the Dow closed down for the week 4 %, Nasdaq ended the week down 4.25%, the S&P closed the week down 4 %, The Russell closed down 4 % and the Wilshire 5000 closed down 6 % which represents almost all publicly traded companies ( that 6 % translates into almost 500 Billion in lost equity ). Looks pretty bleak.

So what happens now? I don't know but it looks like we have a mountain in front of us that is going to have to be chipped away at a little bit at a time, it seems. As I said before, this time it feels different. Contracting P/E ratios down to low single digits is not going to fix the problem since that is not the problem. The problem stems from credit issues. Overwhelmingly almost all major banks, investment firms, insurance companies and some mighty big blue chips were leveraged to the hilt, where any complication could and has spelled disaster.

In the end the losses will have to be absorbed, ironclad regulatory oversights put in place, new leaders put in place at the helm and a good number of crooks will need to take responsibility and go to jail. Confidence must be restored and until those who led us down this path are appropriately compensated with a just reward I think we will remain gun shy and skeptical.

The economic fall out of this financial tragedy has yet to make it's self known in scope and intensity. I think it will be worse than most fear and hope I am wrong but there appears to be nothing bright on the horizon yet that we can look to with any confidence.

Based off the economics off the problem I have revised my bottoms on the markets and put this final tally of the carnage to you for your experienced opinion.

Dow bottom : Somewhere around 6200 - 6500
Nasdaq bottom : Somewhere around 1300
S&P bottom : Somewhere around 675

Are these numbers out of the realm of possibility?