I wonder does it get worse than this? (Probably).
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azeem.azhar 
2 Comments
The Dow Jones is still above the level that it had in 2002. If you think that 2009 will be much worse than 2002 (which is likely), then you better brace yourself. I think we may well have much more ‘red’ ahead of us.
Also: I hear that banks have a tendency not to let businesses fail before the cash generating Christmas period. They rather like to wait until the middle/end of January, when there is as much cash in the accounts as possible. That is a much better time to cull the credit line…
Jens
Completely agree with you on the fate of 2009. My position is that there will be a spike upwards , followed by further downward movement because deleveraging isn’t complete and over the long run P/Es are below long-term averages but not so far below as to represent being excessively cheap. I’m looking at two indicators: long term average Tobin’s Q (which is flagging a ‘buy’) and long term average P/Es (which aren’t a solid buy). I also question whether long term averages aren’t in a longer downtrend anyhow, since we got used to P/Es being based in an era of cheap credit.
Re; insolvencies. I agree. I have heard this as well. The wall of creditors is holding back because on January 16th, companies will be much more cash rich.