Poll du Jour: How deep is the rabbit hole?
Renewed economic fears were paramount yesterday with investors firmly focused on the intensifying economic damage that inevitably follows financial damage. Although the credit markets were seeing some signs of easing, spreads were still at elevated levels in the absence of confidence returning to the lending markets.
Some Q3 earnings reports beat analysts’ estimates, but the debate is now squarely on how deep and long the global recession will be. US GDP estimates are continually being revised lower, with the Q3 numbers now at -1% and Q4 at -2% “Yet Street analysts still see higher earnings!?!!?,” questioned Bill King (The King Report).
Nouriel Roubini, professor at New York University and chairman of RGE Monitor, forecast the US’s economic woes at an early stage and with great accuracy. He remains pessimistic and sees a deep and prolonged recession, lasting at least 24 months, as reported in the Bloomberg video interview below.
Click on the image below to view the video clip.
With ugly economic realities weighing on stocks, causing another 90% down-day yesterday, how do you see the stock market’s direction over the next few months? Have prices discounted the worst and will October play its traditional role as a “bear killer” (having done so on 11 occasions since WW2), or will markets sink deeper into the abyss?
Let’s do a snap poll to determine readers’ views on whether the Dow Jones Industrial Average will be up or down from its current level (8,578) by the end of October 2008 and December 2008 respectively. All you need to do is to click the appropriate button on each of the poll images below. The poll will run until 22:00 EST on Friday, October 17, 2008, whereafter the results will be reported on the blog.
Please also post any interesting ideas or links that you would like to share with the Investment Postcards community, in the comments section.
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