This is the start of at least a 5 percent correction, and perhaps something far worse than that over time. I take this very seriously. This is not just a one off circumstance in the equities market. This has something that has happened across all over the universe of capital markets. I think there's something to the downside that could become quite serious and one should be very careful. If we stop at 5 percent.... Let us hope it's merely a 5-7 percent correction and nothing more than that.
We've been saying that we expect a 5 to 10 percent correction. We've been saying that for weeks now. At the end of bull markets, earnings always look great. Earnings don't look bad until you've gone somewhere into an economic downturn. Earnings lag by at least a quarter, and usually by a half, so you're going to get the best earnings right at the peak of economic activity.