After a strong start to the week, the markets have taken a turn for the worse once again, as profit takers took their early week gains and the remaining panicked lemmings continued to dump their investments at what in many case, are likely losses.
While the credit markets remain frozen, there is some evidence that there is some thawing around the edges. The US rescue package will need some time to work, but this will be the main issue that needs to be addressed.
What is bothering me most is the market reaction to the word - recession. Recessions are a painful, but necessary part of the economic cycle. Even prostate exams don't last, and neither do recessions. Both the IMF and the Conference Board of Canada are predicting that Canada will avoid a recession, but that has done little to quell investors' fears. Since Canada has not experienced a recession since the early 90s, I think that most Canadians have forgotten that the world didn't end back then and are now overreacting to all the drama that the media has created.
We're very likely nearing the bottom of this market crash/correction but it will be some time before we see true stability. If recession fears are realized, the next few years won't produce a new bull market, but it still should generate a number of very good bargains. For those who have the courage and patience, this crisis could be a gold mine. Be cool, everybody be cool.