A hypothetical pessimistic scenario painted by Jay on what could have happened. It's like comparing the worst with the current situation now and one will feel that it's actually not that bad after all. By: Jay The past few weeks actually went passed normally for most people NOT reading this blog. Common folks getting on with their daily lives, occasionally watching the news and see indices around the world fall 25% in one week, goes WOW and moved on. About 10,000 pple were disgusted bcos they got conned to buy some Lehman mini-bonds. But actually that's quite far from what could have actually hit them worse. Oblivious to them and partly to me as well is the probability of a financial meltdown that could have happened. We always talked about it. But this has only happened a couple of times in history, usually localized in 1 or 2 countries (this round think Iceland, and maybe Korea) and only once on a global basis: the Great Depression. When the first bailout plan failed to pass, it was said that we were close to the financial meltdown, systemic breakdown, start of the depression, beginning of the end, whatever you call it. But then global authorities took pain to alter the state of things, and here we are. *Phew* What a relief! And we can continue to just talk about financial meltdown without really going through it. Well, what could actually happen? Since I have never lived through one, I can merely speculate. And I assume most readers wouldn't have experienced one as well, so let's just ponder through the following scenarios and try to empathize. 1. Global stock markets collapse 90-95% from its previous high. This means STI will fall to 300. Yes, the no. of Spartans fighting 10,000 mini-bond investors no I believe it's Persians. Dow falls to 2,000 and Hang Seng 2,500. It will take more than a decade to surpass the previous peaks. As of now, global markets are roughly 50-70% from previous highs, though we averted the Great Depression scenario, we are not quite well off either. It will probably still take 8-10 years to surpass the previous peak made in 2007. But nevertheless, count ourselves lucky. Read more...