I should've been more clear about the credit crunch being over so I will try to explain here.

The ripples in the markets that the credit crunch has caused is over, in my opinion. I have carefully analyzed world equity markets and I do not see at this stage a beginning of a bear market. So I see this credit crunch in its early stages appearing only as a liquidity issue for the time being, which has only caused a correction in a bull market that started in 2002. I do not see this as a start of a bear market. The fed and other central banks have pumped a lot of money into the financial system, investment banks have bailed out several key players (countrywide, bear stearns hedge funds, and others). So for the time being this issue has been quieted. *HOWEVER, the problem has NOT been solved.* The only solution to this problem is to let markets go their course and readjust (and the readjustment has to be massive thanks to the fiat system of pumping money and creating inflation and causing malinvestments). But the day of reckoning has not yet arrived. You may remember February 27, 2007 as a big day, what many considered the start of the collapse of the credit-induced rally, collapse of the yen carry trade, etc. The fed's pumping of money into the financial markets has currently worked to calm the markets but will exacerbate the problem in the future. Currently the uptrend I believe has resumed. And the key thing to keep in mind is that we are in a globalized economy where emerging countries are being rapidly industrialized, so the rally is both fundamentals-driven and credit-driven.

So, to make my point:

- I believe the credit crunch issue has subsided currently.

- I believe it will reinforce itself much harder later on (according to my analysis, in a few years, I think 2010-2012) when equities will be grossly overvalued, in which no amount of pumping or easing of rates will help.

- A liquidity issue does not start a new bear market when economic fundamentals are sound (equities are not overvalued at these levels).