Reply #98: okay, I'm going to give another inadequate answer

[UpInArms]

and I think that it's only a part of the answer - it relates to the type of investors that are currently in the marketplace -

I always think of individual investors as those with the "weakest" hands - they will run first because the investment and its returns directly affects them. So, if the majority of investors in markets were individuals, that would happen rather quickly - but the type of investors in the markets are not using their own money - they are running on other people's money, so the affect on them is slight and they can stay and play until they run out of chips - and that may take a while

here's a chart (ignore basically the part on the left, 'cause we're not talking about Korea, so look to the chart on the right and see that only approximately 14 percent are individual investors



so there could be a long gap between reality and ker-thump

then there are the vast amounts of money that are sloshing around - the following excerpt gives a clue:

Changes in demography, accounting, and regulatory frameworks and windfall gains accruing to commodity producers have led to increased asset accumulation and changes in asset allocations. Assets under management by mature market institutional investors have more than doubled over the past decade, amounting to about $53 trillion in 2005 (see chart).



Institutional investors in the United States account for about half of this amount, with continental Europe accounting for one-fourth, followed by Japan and the United Kingdom. Within conventional investment management, pension fund assets managed by institutional investors have expanded significantly. There has also been an increasing reliance on hedge funds as a vehicle to achieve higher returns, with pension fund assets being invested in hedge funds.

New sources of capital

Emerging market countries have become net exporters of capital and an important investor class in mature markets over the past five years. Their outflows mirror the U.S. external financing gap. This notable shift, which casts a spotlight on global payments imbalances, is driven primarily by the official sector in emerging markets, particularly central banks and sovereign wealth funds.

Gross official reserves have more than doubled since 2002, reaching nearly $5 trillion in September 2006. Governments of countries producing commodities have become large investors in financial instruments, particularly in bonds and equities, through sovereign wealth funds. Market estimates indicate that these funds manage more than $1.4 trillion.

iow - I really don't have an adequate answer - I can only say that I know I am watching a slow motion trainwreck.

my cheapest opinion? the dollar will lead the way downward for this country - as the lights go out for us with the fewest dollars, you know, the third class cabins on the Titanic, the safety nets will collapse for those in first class.

Their security guards and fences will not keep them safe from the fact that they defunded the bottom and took it all home. They will still need to find food as their "servants" become less stable and they will have to go out into the communities that they pushed to the brink of disaster and collapse.

torches and pitchforks anyone?