This is not a buying opportunity

We asked our readers last week if they reckoned stocks would rally after the grim summer. Stockmarkets suffered mid-year panics during both 2009 and 2010, followed by decent rallies, and we wanted to know if 2011 might show a similar pattern. Most respondents were pessimistic about that.

Indeed, they were pessimistic even before Friday and market reactions yesterday suggest that the US downgrade has not made them any more optimistic. Stock indices throughout Asia showed a similar pattern during Monday trading, slumping in the early hours and recovering slightly later in the day. Taiwan’s Taiex and Korea’s Kospi were the biggest losers among the big Asian indices, shedding 3.8% each....