SOS Denial

The Financial Index in NYSE contribute about 25 to 30% of the S&P 500 and in 2008, the financial sector make about USD150 billion losses instead of average USD200 billion profit for the last 5 years.

Most of the profit are contributed due to the phony credits (sub prime and main prime or called liar loans) and the derivatives. Now, the reality, the phony credits losses is exceeding USD2 trillion (on mortgage alone) and the loss on derivatives are at least USD5 trillion (on credit default swap alone), and the NYSE total earnings is about USD1.3 trillion. Of course, we have yet to include the credit card loans, student loans and over gearing by the average Americans.

Logic will tell us the both losses on mortgage and credit default swap alone is about USD7 trillion, which means we still have many years of earnings in NYSE to be wipe out.

MyView

I am not a pessimist but a realist, looking at that kind of figures, I strongly believe we have yet to see the worst. If we believe that US is out of recession by second half of 2009, we are in for a real shock. Look at the beautiful picture, this is only 2008, wait till you see when the tail comes down, that will be late 2009 and first half of 2010.