The US stock market, and markets around the world entered a free fall this past two weeks, but the stock market has NOT collapsed in the USA. The IMF has warned the world banking system is on the brink of global meltdown. The World bank is under "siege" from this unprecedented crisis.
Around the world governments who only months ago stated that they are fiscally sound while the USA has an isolated issue are scrambling to shore up confidence in their backyard, some countries at risk of default.
Germany, United Kingdom, France, Scotland, and Australia to name a few are proposing their own bailouts now. As previously blogged many more countries are under siege.
G7 is meeting this weekend (Financial Ministers of Canada, France, Germany, Italy, Japan, United Kingdom, and United States of America) in an attempt to ban together to join forces to stop the free fall.
The USA continues escalate this game of "world collapse chicken" by suggesting the USA take ownership in banks.
In the mean time China is using this as an opportunity to dethrone the USA from finance leader. (which unfortunately I believe in the long term they will succeed) China has "announced" a committee to review financial health of foreign based companies. China is setting it self up to be the safe haven in this troubled storm. If China makes available the equivalent of "US Bonds" to the world, this should complete the collapse of the USA. Hopefully this is a lunatic rant rather than reality.
I have heard people talk within earshot of me of this being a "buying opportunity of a lifetime". In some cases, I agree, but very specific well thought out company stock purchases, or possibly oil and gold companies. But in general there is much more danger than reward, recommend reading my post on long term investing. If the world collapse occurs it will be equivalent of rolling the dice on your financial future.
Keep in USA bonds, but be diligent and prepared to bail out. If you want to take risk, diversify outside of USA bonds into Gold or Oil Companies, or plain old CASH.
In any event now is NOT the time to gamble your future away. I myself who have been reading, talking, and investing for this moment since August 2006 see no truly safe place for investing, its all risk. Best you can do is minimize that risk. I am moving 1/2 my savings into second institution.
The USA and world markets may bounce, but financial system is far from out of the woods. Until ROOT CAUSES are addressed, throwing money at the problem will not produce long term stability. Unfortunately, I see a global financial reset as a small, but distinct possibility, which wasn't even a thought 1 year ago.
If you want to do your own "reading and research" I STRONGLY recommend checking out the blogs listed on the right. They are all excellent sources of information. Each site typically has a "forum" section where breaking news is posted, I tend to follow Market Ticker forum, however in this chaotic time, these "bear market" blogs are becoming slow and difficult to navigate with all the chatter.
I anticipate a time crunch, I'll try my best to keep up with blogging. Good luck out there.
UPDATE: Economist Roubini gives a speech of current state of world economy