The image to the right shows what the Dow Jones Industrial Average has done over the last 3 months. This is not a pretty picture, and represents about a 9% slide in the stock market. This is all due to the recent credit "crisis", which is more appropriately a credit "loss of confidence", which started the cascading effect that we are still witnessing.
The silver lining is that we've had a recent upturn in the last 2 weeks, the Fed has signaled that it is in easing mode, and the big banks are starting to take huge (ultra-conservative) write-downs. Why is this important? Well, if the banks take a massive write-down now, each subsequent quarter these written-down loans are again marked to market. Eventually, there will be a market in these securities, and eventually these assets will be marked to market at higher prices than currently. At this point, maybe in 6-9 months, banks will stage a rally.
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