It's official now: The Bear is here

The Standard & Poor's 500 Index fell into a bear market on 10 July ’08 and may not stop tumbling until it reaches a level not seen since August 2004, if history is any guide. A drop in the index of another 12 percent would match the average retreat of 11 bear markets since 1946, data compiled by Bloomberg and Bespoke Investment Group LLC shows.
Shares declined for five straight weeks as more than $400 billion of bank losses, record oil prices and the fastest commodity inflation in 35 years threaten to push down earnings for a fourth quarter. S&P 500 companies are forecast to report an 11 percent decline in second-quarter profits, according to the average estimates of analysts surveyed by Bloomberg.
The S&P 500's drop has lasted 275 calendar days and wiped out a fifth of its value. In the 11 previous bear markets, the index has dropped an average of 30.4 percent over 386 days, according to Bespoke, New York-based financial research firm.
The Dow average has already slipped into a bear market in first week of July.This decline is largely blamed upon high crude prices.Crude has gained 95 percent over the past year and touched $145.85 last week.
European and Asian stock markets have fallen amid concerns about the state of the world economy and the impact slower growth will have on company earnings. Britain's top share index FTSE 100 slid 2.7 percent on 11 July’08 to hit its lowest closing level in nearly three years, as banks fell on fears of more capital raising worries. The UK benchmark index on Thursday closed in bear-market territory -- it is down 20 percent from a multi-year peak a year ago, and has fallen 17.8 percent so far this year. Analysts said Wall Street had taken heart from a fall in oil prices and from US Federal Reserve chairman Ben Bernanke's comments that the central bank might extend its emergency lending facility to 2009.
Chinese markets have been hit very badly.They have corrected 48% from their highs.Indian markets are already down 38% from their all-time highs.The 'Decoupling' myth seems to have finally gone bust.
Crude is showing no signs of weakening on tight supply and tense geo-political situation Middle East. American credit crisis could throw up few more surprises in coming days.Wall Street is anticipating a Bear Sterns from leading mortgage lenders Freddie Mac and Fannie Mae. These mortgage companies which own or guarantee almost half of all U.S. home loans are fighting a funding crisis. Worries that the government may nationalize struggling mortgage finance giants Fannie Mae and Freddie Mac created yet another source of problems for beleaguered U.S. banks and brokers.Fannie and Freddie, which purchase loans from banks and mortgage companies, together own or guarantee $5 trillion of debt, about half of all U.S. mortgages.So their collapse will make the things worse.
However Brazil and Russia continue to put up a brave front as crude oil and commodity prices continue to remain firm.However once the commodity rally gets over with decline in demand we might see these two joining the bear market. So it seems worse is yet to come and the bottom is still not in sight.