Analysis
By Declan Curry BBC Breakfast's business presenter

With the UK stock market deep into bear territory - well below its highs with little prospect of recovery - Declan Curry gauges the market mood.

"Look, bears!" "Grizzly?" "No, furious."

This is fear and greed; we saw the greed in the tech boom, now we're seeing the fear

Stuart Fraser, Brewin Dolphin

The stock market has many animals - all nicknames for the things it does. There are dogs, stags and butterflies.

Someone once invented the term "armadillo" for a joke, only to overhear it in regular City conversation just a fortnight later.

Then there are the king beasts - the bulls and the bears.

Bears in charge

Colloquially speaking - though unsurprisingly there are strict technical definitions for these terms - "bulls" are people who think shares are going to go up, while "bears" are those who think they're going to fall.

And over the past two years, the bears have ruled the trading dens - and have they given our shares a mauling.

The blip in share prices may not be the fall of the last two years, but the rise over the last 10

Ian Williams, Baird stockbrokers

The FTSE 100 index of the UK's leading shares has lost a third of its value since its peak at the end of December 1999 - dropping about 2,500 points since then.

The last time the UK's leading shares were consistently at this low level was way back in 1997.

Happier times

The great gains in share prices during the last charge of the bulls, between 1997 and 2000, are just a memory, thanks to the bears.

The bears have been even grizzlier to technology stocks.

The sell-off is global

The index of Britain's leading technology-related shares, the Techmark 100, has now lost nearly 5,000 points since its peak in March 2000.

The Techmark's losses - just the losses, mind - outweigh the index's current value by around six to one.

Welcome to Bear Town - where shares die a slow death.

And the bad news is, the bears are showing every sign of staying around for a while longer.

Painful for many

And it is not only the 12 million people in the UK who own shares directly for whom this is grim news.

Millions more will also suffer. Prolonged falls in share prices eventually cost anyone with pension savings, an endowment mortgage, or an investment policy with an insurance company.

That's much of the UK's working population.

The king bear, fund manager Tony Dye, says shares could carry on falling for anything up to another 10 years.

Grizzly outlook

Mr Dye is no stranger to doom and gloom - he earned himself the nickname "Dr Doom" when he derided tech shares during the heat of the technology boom.

The underlying picture is not that bad, and the economic figures are positive, but people don't want to buy anything

Simon Rubinsohn, Gerrard stockbrokers

His pessimism cost him his job, but events have shown he was right all along.

Now running his own company, Dye Asset Management, he has warned of much more pain to come.

He is forecasting a 40% fall in the US markets - and thinks British shares could follow in step.

"The UK markets are slightly less vulnerable than the US," he told BBC News Online, "but we are going to follow the US markets, and a 40% fall [here] is feasible."

In his view, share prices need to fall on both sides of the Atlantic "to bring the market back to its average value in terms of price/earning ratios - though no-one knows exactly what the earnings are at the moment."

"The markets will only start to recover when no-one is asking if this is the bottom," he says.

'Overpriced shares'

The view among the bears is that the markets are falling, not because of certain events, but because the price of many shares is higher than they are actually worth.

"The market won't turn on a sixpence - it will take months if not years to recover," said Ian Williams, a strategist at the specialist stockbrokers Baird.

"We're going through a process where people are working out the true value of equities and putting a correct price on shares is very difficult."

"The blip in share prices may not be the fall of the last two years, but the rise over the last 10.

"We're now getting back in touch with a sensible price."

Good news ignored

So for the true bear, shares are falling because they're not good value.

The audit scandals in the US, the rumours about dodgy books at British companies - as yet, unproven - and worries about terrorism are just mood music in the background.

That also means that any bit of good news that comes the markets' way is just ignored.

"The underlying picture is not that bad, and the economic figures are positive, but people don't want to buy anything," said Simon Rubinsohn, chief economist at brokers Gerrard.

"Investors don't want to trust anything, and it's hard to see sentiment turning around in the near term."

No summer sunshine?

Some analysts had pinned their hopes on good news from US companies in the summer - but he doesn't think that will do the trick.

"The results in the second quarter may come too soon," Mr Rubinsohn said.

"Especially if people are asking if you can believe the numbers."

That sense of a potential recovery melting away is widespread in the City.

"You need a trigger for people to put money into the markets, and it's difficult to see where it's coming from", said Mr Williams.

Fear and greed

"There's a total lack of confidence," said Stuart Fraser, a director of stockbrokers Brewin Dolphin.

"There's a buyer's strike, so even a little bit of selling will drive the markets sharply lower, because the market makers don't want to end up holding stock, and so cut the price to get it off their hands."

His forecast is for shares to lose another 10% of their value before the market turns around - but that recovery may only put shares back at square one.

"It's possible we are coming to that cataclysmic sell-off," he said.

"This is fear and greed. We saw the greed in the tech boom, now we're seeing the fear."

Worrying forecasts

If anything, his prediction may be too optimistic.

Some of the City's Mystic Megs, the chartists who study graphs of past performance and try to divine a message for the future from them, say the FTSE 100 could drop to 3,700 before it starts to pick up again.

If they're right, it means our leading companies will have lost nearly half of their value before the bears even consider hibernation.

And there are no guarantees that the bulls will want to rush back in to take their place.