Forget the WWW debate. This global asset meltdown is only just beginning. We all paid too much for future earnings growth. The DJ was over valued at 8,000 before it hit 11,000. The banks are vulnerable is the US as derivative exposure is massive. If I were a credit officer in bank I would not be sleeping. The ASX is held up by the banks. When people understand how all banks are exposed to each other the implications of a major US bank failure is ugly. All asset markets have overshot and will similarly overshot on the downside. An asset is only worth what someone else will pay, and those valuations are falling quickly. The US is terrified of deflation then stagflation as the economy is reflated with bn's of war driven expenditure. Think back to the 70's. What drove growth then? Spending from the Vietnam war. The Iraq situation wil pump prime the world economy with massive liquidity which will force the Fed to raise rates to reign in the inflation impact. Lets hope I have it all wrong, because if I haven't we ain't seen nothin' yet...
