Stocks are uglier when oil goes down

You see the DOW is caught by Big Bear when oil drops approximately 10% this week. Who told you that high oil price was the reason for the falling stock market? Tell him/her to open his/her eyes and look at reality. Don't blame high oil price for the bear market!

You should blame speculators and de-leveraging or leveraging. Housing is showing no sign of recovery and when the fall in prices and volume continues, the credit crisis won't go away. Speculators will continue to be hard hit and the process of de-leveraging and sell-off has to continue.

Both the Fed and the Treasury have confirmed that the present turmoils will move into 2009. We have little reason to be more optimistic.

The target of turnaround or recovery in 2009 is more than optimistic already. According to our experience in Hong Kong, once the real estate bubble exploded, the process of "meltdown" should continue for many years and for Hong Kong, it started in 1997 and went into the abyss after the SARS attack in 2003. Nothing could save the Hong Kong economy except the kind help granted by our Central Government in Beijing. So US should learn from our Hong Kong experience.

Oil price will continue to go, though for political reasons, it may withhold rising for a while. If it goes down like what is happening this week, the stock market will go down with it and all investors and speculators will suffer together. What an unfair world!