TORONTO, Oct 22 (Reuters) - The Toronto Stock Exchange's main index closed nearly 6 percent lower on Wednesday as resource issues sank along with commodity prices on concerns that a global economic slowdown will slash demand.
Transportation numbers are just awful. UPS, FedEx, Yellow and Ocean Going Vessels are off 7% just as the Christmas stocking season is here. America is out of consumer credit and cash. Yikes.
Those don't happen for no reason or because everybody decides to panic at once. The biggest problem is deleveraging. Credit markets are still frozen where it counts (the 10:1 hedge funds, all buyers of ABS, etc). Those people drove the credit bubble and they are not going to keep driving it. The banks cannot do it themselves, it is too risky for them as we are just finding out.
Once a credit bubble is over, it will shrink based on how excessive it was and ours, Europe and Australia / New Zealand was pretty excessive.