There are similarities with the 08 crash, but there are differences too. In 08, markets had liquidity problems - everthing had to be sold to meet margin requirements. We had a downward spiral of margin calls generating more selling. Currently, there is no shortage of liquidity - plenty of cash on the sidelines and most funds are underinvested. Any liquidity problems caused by such things as the unwinding of MF Global should be temporary.

Instead, we have a sentiment problem - right now, it's simply a Europe on–Europe off trade. Everything seems to move in the same direction - merely a question of beta. For example, the high beta HUI gold bugs index lost over 8% last week. Kinda hard to believe that Italian or Spanish bond yields are more important to the price of a gold stock than the company's assets or profits, but that is what's happening.

A crash like the one in 08 happens once every 2 or 3 generations. The belief in another imminent crash is strongest soon after the last one. This is known as the "recency effect" - in this business, it helps to have a psychology background.

So we wait for a change in sentiment - Santa has to get past the Mediterranean Grinch before he can come to town. Personally, I'm holding a lot of juniors with some cash reserved for tax loss buying next month.