Oz shares fell another 3.3% today due to the subprime concerns in US..

I used to try and think why a correction may be coming, but the market is always irrational. Though, it was obvious the bull market was in its third and final phase, and that a correction was well and truly on the way. We now see it, and after today, just how low can it go? I went bargain hunting yesterday, after the US rose, however I did not expect what happened today. Luckily Im still about 40% cash, so I will wait and see what happens, and grab some further bargains should this fall continue.

It is always interesting to see the word 'bargain' and the phrase 'the market always rises' pop up in these 'corrections'. These are both valid presumptions based on historical precedents of capitalism as we know it. What if we were to stand back and have a really good look at the big picture, and try to trace these periods of prosperity & correction to determine precisely what is the driving force, and if it is sustainable indefinatly.

The problem we now face is the fact that the financial lubrication eg currencies in circulation today are in excess of the requirements for sustained & steady growth. This is also compounded by the use of margin & derivatives, which grow exponentially each year to the point where nobody really knows if there is actual 'real' money to back them all, all the while the average dollar in Joe Citizens' wallet is getting worthless every day.

The normal capitalistic purges to 'reset' things have been indefinitly delayed due to either human weakness or political expediancy.

Notice how many charts there are with the blow off top surge formation going around eg share markets, property, antiques, art (Aboriginal dot paintings???) etc

And Japan, the former economic miracle & now world banker supplying zero percent funds to fuel asset bubbles, relegated to the global backwaters for more than a decade now - is this an example of the end game of capitalism, though in isolation? What if it synchronises on a global scale - contagion?

Aren't corporate profits still good?
Isn't the world still expected to have excellent GDP growth?
Isn't China, India and the rest of Asia's demand for raw commodities still there?
If anything this shake up has only helped the resources sector, why?
Are we better off now, or are we living to work?
Humans have just gotten too smart for their own good.
It may actually be different this time?

-aADz-