As discussed prior, the recession coupling this crisis was the real short term threat to equities. Credit is one thing, but earnings (current and projected) move markets. As we predicted, the market slumped in reaction to earnings.
To brighten your mood, Roubini is now sounding more gloomy. First, he predicts stag-deflation, then yesterday, he does this interview.
My outlook remains wait for earnings projections to come back to reality (they're still too high) and get ready to buy equity between Q1-Q3 2009.
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