DAX vs FTSE

Hey guys,

first post on here. names joe.

ive been watching Dax/Ftse for a couple of months and it has gone from 1400ish to 50ish in less than 50 days as germany bears the brunt of the euro disaster.
It seems by the end of the week we will see the FTSE bigger than the DAX for (i beleive) the first time in History.

I beleive this diff to be undervalued but as a student of finance i ask your opinion.

i believe this for the following reasons.
1- although the companies that make up the DAX include Deutsche, the exposure to financials is not immense.
2- the UKs little stagflating ecnomy surely cant compare fundamentally to the industrial power that is germany. (im british so i can say this )
3- even though we could be headed for a double dip, the Dax has priced in reccession much more than the FTSE has to date.
4. the worlds confidence in germany long term is surely shown by their comparitively strong faith in its 10yr.

please do excuse any obvious ignorance and show me up-

cheers-
Joe



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knowledge is the only thing that will always be valuable

Generally when one talks of size here overall maret capitalisation is what people look at and FTSE has always been far (about3x) larger than DAX 1)because it has 100 cos as opposed to DAX's 30 and 2) It's got companies like Shell, HSBC, BP, Unilever that are true multinational and not just little englanders, whereas the DAX is composed of 100% pure breed aryans. The headline index number isn't so relevant...

surely the historic pricing that sees the 'headline figure' being lower now for the first time, is of significance.
Also seeing as the two indices use different calculations to work out their respective values then market cap of the individual companies would not be that relevant to the actual price of the dax future as compared with the FTse.
also the dax carrys some of the most powerful companies in europe- companies whom can long out survive any euro crisis surely?
either way i was right to go short the difference to see it come through the origin. now the question is how much lower can it go..