Stock markets fell heavily yesterday although the Dow made a late recovery and ended only 15 points down but the Asian markets are falling heavily again today and governments are injecting more money in a bid to increase liquidity and stop the falls. Pundits appearing on news channels are usually analysts working for banks and finance companies and their bonuses are linked to profits made from bull markets. They, not unsurprisingly, claim that the market is heavily oversold and will rebound strongly. Politicians are habitual liars anyway and only interested in the short term with eyes firmly fixed on the next election date. No one seems to have any idea as to the size of the sub prime defaults and which banks are likely to be hit next. I am not an economist but as a small time investor would like to know what will happen if the falls continue. If investors in the US start redeeming money from funds will they sell in emerging markets to pay American investors? In which case how far will the Sensex fall and will it drag down the housing market with it? If the Fed reduces interest rates will there be a run on the dollar? If oil prices go up for whatever reason how will the central banks tackle inflation as well as reduce interest rates? If the US goes into recession will China also catch cold and result in world wide recession? Seems to me noone can control events any more. Globalisation is a genie which can send markets or currencies up or down without control and without anyone being able to predict which way it will go. All they keep saying is that fundamentals are strong and Goldilocks will be here shortly. Instead of going for the spectacular if Al Qaeda were to attack a few oil tankers on the open seas the entire house of cards could come tumbling down. Terrifying. Thank God I do not know economics.