All over the world people are asking four magic words: Is this the bottom? The answer from analysts even going back to January 2007 say certainly not — back then predictions suggested 50-60% loss from around a 14,000 DIJA. We’re about half way there despite all the Fed’s recent efforts (with intra-day lows of 11,756.60). If you look closer and pick a giant like Google, there were analysts who predicted it would be at $850 at this time. GOOG trades instead at almost exactly a 50-60% markdown with lows of 412.11.

I’m no expert for sure. Yet I still feel fine disagreeing with the 50-60% predictions; mine are closer to a 25% loss from the price point of a 13,000 DIJA. I think while bubbles tend to pop at ratio loss to growth of 3 to 1 (resulting in the aforementioned 50-60% range), the Fed changed things with their involvement. My number tries to adjusted for those changes. Starting with 25%, we see literal declines of 3,250 from 13,000 to 9,750. Adjusting further for modifcations made to the DIJA since the 13,000 number, things are more likely to head back around 10568.2, the closing price on January 23rd, 2004. Only time will tell for sure, however some say that bottom was found and realized today. The proof, these people claim, is Bear Stearns and its overnight demise after 85 years as a brokerage.

Bear Stearns reported $80 per share book value on Friday, leading to bankruptcy just days later on (today) Monday, would have sent shock waves through the US economy for sure. But whats not sure, is that this taking place, constitutes any indication we’re at the bottom. The Fed realizing the apparent potential damage of those shock waves, took action to prevent the kind of loss of confidence in the Market which could have had long-term and relentless momentum. This and the rest of the Fed’s efforts may very well continue to keep us hovering just above that bottom. The Fed (using Great Depression era precedence) made JP Morgan “a sure thing” on the Market though. Backing JP Morgan with 30 billion USD as part of orchestrating a bail out purchase of Bear Stearns at $2 (much less than the $80 book value) per share. This wasn’t even the Fed’s most significant move today.

Today, the Market also essentially gained the balance sheet of the Fed. Continuing the saga, tomorrow, Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, will have its 159 years of life’s work tested as the Market will respond to its release of earnings reports and guidance. Then, its unto the likes of Goldman Sachs & Morgan Stanley.