My opinion is that the stock market will go down further although there is a good chance of a very strong bear rally happening soon. My reasoning is this: Governments in the world are thinking of injecting cash into banks through equity stakes. If these banks "suddenly" have new major shareholders, what would happen to the existing share price? Obviously it will plunge like a falling knife due to share dilution. Since financial sector makes up a very large part in any country's market indices, it will only pull down the other share prices further. Actually the share price has already started to react to this share dilution problem as market is quite efficient. Perhaps stability will only come in after all major banks have been bought over by their respective governments. When that time comes, all major banks would effectively be merely representatives of their respective central banks. However we still have to go through a period of economic recession. In Singapore, we have just entered into technical recession while most parts of the world have yet to enter into recession. So things will remain rather bleak for sometime. How about Singapore's banks? It has been said that Singapore banks are safe because tighter regulations and that sub-prime problems do not originate from here. Well, I do not buy the implication that foreign banks such as European banks are less regulated than here. Moreover, the Europeans have been saying that sub-prime is a "US" problem but see what is happening in Europe. A "US" problem has infected them as well. There is lots of propagada in the news. All I know is that nobody will look after yourself other than yourself. I don't trust propagada. I have acted on what is best for my family. I had also advised my parents on what is prudent thing to do. My in-law has also sought my advice on the prudent thing to do.

In the meantime, it is my belief that the market has not reach its highest panic level. Potentially the Europeans could end up in greater trouble than in the US because the EU makes up of a many countries having their own agendas. The problems of having a single currency in Euros have started to show up as well. As there is only one central bank issuing the Euros on behalf of its 15 member nations, it imply that individual EU nation cannot anyhow print money. This is unlike in the US which Uncle Sam can print the greenback at a click of a button. Perhaps the inability to print the Euros at will is a good thing but it also means that individual nations have to be really creative in their problem solving skill. In the meantime, Great Britain which did not adopt the Euro is at liberty to print the Sterling Pound.