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Anne Ahira News - Ahira - Why The World's Markets Have Entered Into The Bear Phase by Anand Mann

Equity and financial markets had come crashing down in late January and most of the players were not able to recover from those lows that the market fall again and significantly way below the January levels.

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The mood among the investing community has shifted from buying on decline to selling on rallies. The failure of Baer Stearns has just validated the fact that there is certainly more underneath then we all first thought. This bear market may last more than the previous one in 2001 when the US economy able to come out of shallow recession very rapidly.

This time it is believed that the mess is too big not only for the Fed to manage but also to bring the economy back on track. The three core reasons why this time it will be harder than before is Mortgage back security and housing market bust is here to stay and it will not only take more than just couple of quarters to clean up. Slowing economy will increase the default rate and more write down can lead to further contraction in the economy. Dare we say that excess demand and foreclosures may lead to empty neighborhoods?

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