Update 8/9/2011: Good morning.

While I am educating myself this morning, I would like to share what I have been reading/watching:

• Yesterday’s 634 rout was primarily blamed on S&P downgrading US debt. I believe it is just a trigger. But trouble has been brewing for a while. Indecisive leadership from Obama and a dysfunctional political system bogged down by stupid ideology eroded the confidence in US of A.
• Sovereign debt storm clouds from Europe were gathering since early 2010 and have thickened recently with near certain default by Greece. Furthermore, Italy and Spain with much bigger debt problem are threatening to sink the few remaining healthy economies in Euroland who come to rescue the fellow Euro nations.
• Having committed a lion’s share of EFSF, Germany has risked its own credit rating, as evidenced by German 5-year CDS rising above UK CDS for the first time today. (Source FT Alphaville)
• As of this morning, four major markets have entered bear market territory:
• China’s Shanghai composite (entered bear territory last week)
• Germany’s DAX (yesterday)
• France’s CAC
• London FTSE (this morning )
• Early this year, Japan’s NIKKEI index had entered bear for umpteenth time in the last 2 LOST decades. Today, it traded very close to the post-2011-earthquake low before rebounding later.
• Gold traded as high as $1760/oz
• US Futures are fluctuating wildly this morning. There is ‘talk/rumor’ about Uncle Ben coming to the rescue with QE3 announcement as early as today. If he does, expect Gold to hit 2000 very soon.
• The witch hunt is on:
• In US, the Senate is going to ‘investigate’ S&P downgrade
• In Italy, authorities have raided S&P offices
• South Korea joined Greece in banning short selling. [Short selling doesn’t cause structural problems. Unsustainable growth on the backs of structural problems attracts short-selling. Be thankful to the shorts. For, they expose you the weak spots.]

That’s the roundup for now. I think that the markets are EXTREEEEEMELY oversold and we are due for a bounce. Then again, I have been wrong several times.

caveat emptor.