Quick Comments on the US Market

My quick assessment of the US Stock Market:

I am generally very bearish over the US stock market based on the following reasons:

• Subprime woes. It is already affecting housing stocks, mortgage lenders and banks in US. I believe the bottom is not near yet. More bad news can be expected. Once consumers spending is affected, it will greatly affect credit card companies, retail and tech stocks. The general market will go down in tandem somewhat. The earliest sign that tech stocks could be affected comes from today's CSCO guidance. Tech stocks that had pushed the market lately, tumbled today (as at 2:00pm ET)
• Weak US Dollar. The ridiculous trade and budget deficit in the US coupled with lower Fed Interest Rate will push the US dollar lower. This somewhat pushed Gold & Oil to go higher. More countries such as China are also reducing their US$$$ holdings. As long as the FX market sees no bottom for the weak US dollar, the US stock market will be under pressure to go lower as inflows of funds to the US stock market might be lower.
• China's Stock Market Bubble. Greenspan had been saying that China's stock market is generating a huge bubble. Now that he is out of government, I tend to trust his words more than before. China had enjoyed a bouyant economy. However, with the recall of many products from China, it had created a BIG FEAR among consumers in the West. Demand for its product might be affected. I suspect that a significant number of Chinese factories should face overproduction now. It is a matter of time before the media get to know about it. If the US market go down coupled with the weak US dollar, US consumer spending would be affected. The demand for Chinese goods would go down too. Thus creating more overproduction in Chinese factories (unless they can create demand from elsewhere fast enough). Soon the Chinese stock market will be affected to.

In a down market, all stocks, good or bad will go down too. Stock markets all over the world might go down the drain too. My concern is that this whole episode might create a global recession. The question is, "What will trigger (it is just a market excuse) the global market meltdown?" Is it something from the US, China or elsewhere?

The above arguments may sound very simplistic, but I suppose you get my point.

- Persiancat04 (Millionaire-in-progress)