I believe equity markets (and riskier assets in general) are in the midst of a 10-15% correction that plays out within one quarter, which is normal, not at the onset of the next financial avalanche, which lasts many quarters.
There was never any question that the extraordinary policy maneuvers of 2009 would begin to be unwound in 2010. But the culmination of events in Europe, China and the United States over the last two months have brought this all to a head very early on in 2010. Profit taking after large, sustained bull runs is a natural reaction of investors to a bout of increasing uncertainty and higher risk recognition.[Read more...]