Agree this correction has been brewing for a while and that complacency was used as a tactic prior to Santa as the previous growth pattern was far too recognisable, and helped the Santa Rally achieve something more than it should have. Taking twice as long to get there could have a lot to do with the speed and depth of descent. My suspicions were really piqued when Goldman Sachs JB Were spruiking so loudly at the top of the Santa Rally.
From the Technical view point, the decision dates were relatively close.
The fact the Dow just blipped up through the long term declination from Sept 2007 is a first foothold, another two blips and it will stay for a while. This cycle is still going to be messy though given the swings of the last cycle, will the effects of the stimulus packages smooth this out ? that is what they are supposed to do. I think they will under sufferance.
Wall Street is waving it's rattle atm, needs a dob of honey on it's dummy but it's not going to get it. There is a battle ahead between fat and not so fat and it won't end until the financial diet is enforced. Any changes that are made will be far enough out that the equities markets will have time to adjust, it is not like there is a massive re-evaluation required in the short term.
Obama will either achieve the reforms USA needs or Wall Street will kill American democracy and that will be the greatest piece propaganda Communist China could ever enjoy. China might just need it too if Wall St cannot change. Whether Obama gets kicked next time or not, America has realised it needs to change and that has been his best contribution so far.
China will continue it's infrastructure program although inflation will kick in big time and it's citizens will learn to dislike USA for non payment of debt. USA will lose financial ladder pegs faster as a result.
Hong Kong is an interesting barometer, it is so dependent on the rest of the world that it is remarkably perceptive, albeit a little hyper active and sensitive.
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