To be honest I am not sure what we need to see the markets recover, however I do have confidence that eventually we will see another bull market. Of course, the next bull market will end in another crash as we tend to forget all about market bubbles when things are good. (I recall for example that the U.S financial system was supposed to be "fixed" after the Savings and Loan Crisis)

My concern at the moment is that governments and central banks will go too far in trying to encourage growth and we will end up with a inflation problem a few years down the track, mind you that sounds less scary than deflation and falling asset prices. It is also interesting to remember how Japan was ridiculed when the government went on a spending spree to try and drag their economy out of the doldrums and and yet, that is what Australia is about to do with Rudd's 10 billion. Of course the money Australia is spending is a fraction of what the Japanese spent, but the end result will probably be the same, it will build a little confidence (and a few bridges etc) but in the end it will not be "the" fix.

One thing I am watching up here in Japan closely is the property market as momentum has slowed after some years of increasing land values in the major cities. Hopefully this is just a result of the global credit squeeze and when the credit markets thaw out some life will come back into the sector.

Finally I agree with your comment that the conditions for a crash were around for 18 months before Bear Stearns ran into trouble. If this market bubble was pricked in late 2006 or early 2007 we would probably have seen less pain and the global economy would be much healthier today.

The conditions for a global crash were around for at least 18 months before the Bear Sterns spark finally ignited. Once Bear Sterns happened it was easy to realise that the contagion would spread to the equities markets within 12 months.

The "doomers" argue that high inflation is inevitable because of money printing and that that a return to a bull market cannot happen any time soon because of central banks fiscal meddling. They would argue that saying that the best thing to do is nothing and that recovery can coly happen after losses are liquidated and the market’s own equilibrium is found. This rhetoric appeals to my logic requires a supporting analysis goes beyond classical (and Austrian) economic analysis or indeed any other “taught” school of economic thought. I try to be eclectic but the thinking ( about how, when and why) a recovery may commence goes beyond historical models that were developed to explain a different array of circumstances.
Dan (I think) argues that the “new deal” of global government expenditure will be a fraud in many countries simply because there will be insufficient funds to pay for it. All debtor governments can do is print money, tax more or borrow from the future. An L curve rather than a recovery is predicted, I guess, because private funds which could have been injected into business and the market will instead be commandeered (somehow) by Government programs that socialise losses.

Sitting in Japan, you hope for the return of a Bull market. We all do. But what must happen first? Cheers

I think many people thought (including me) that 2008 would be tough, but I do not recall many people putting in writing that we would see the All Ords slip under 4000.

And let's not forget, if the U.S had been a little more proactive the fallout from the subprime mess could have been less painful and we probably should not have seen the All Ords dip much below 5000. (which just happens to be around a 20% hit)

Anyway, let's just hope the next bull market is a real ripper!

What are the most crash resistant stock types? Im guessing that can't be answered...

Damn you doom sayers, ha.

Buy and hold. When it corrects invest more.

The question is, why do you sell?

With $400 Billion of sub-prime loans to be reset over the next 12 months, it isn't over by a long shot.

The only question for me is 'When do I sell?'