7)Thouhts on the market over the past couple of months

Now to the markets. Looking pretty ugly. No good news. I think that there is still to much complacency in the markets right now, but will say the level of fear is rising. All futures markets are sharply down as I write this and the Hang Seng opened down over -1000 and the Nikkei is down another -450. Is tomorrow the wash out day? I still think it is to early for the lows to be put in. Paulson is not really doing the job that needs to be done. He is dangling a carrot when it is real meat ( and a lot of it ) that is called for. The measures they are adopting to confront and combat this epidemic are falling immeasurably short of the needed dimensions to be abundantly assured they will work and to preclude any resistance to the rescue efforts. The economic data from Black Friday and the Christmas selling season will be the worst on record. When those numbers are reported that's when I feel the panic will set in. Consumers, to a large extent, buoy this country during economic calamities, without their financial support all bets are off. When the numbers are reported and reveal they have stopped buying, en masse, what we produce and import, that is when I feel you will truly be able to look under the bus and see that the wheels have fallen off and are rolling down the street.

Cash and shorts are the only alternative right now. A buy and hold strategy does not work in this environment. Sure, things look cheap and by all logical reasoning should be considering the the utter economic disaster that was engineered. But, could equities go lower? I think they could. Joel, how many times have you looked at Citi, Hartford, Goldman, Peabody, China Mobile or any other of the 5000 that are traded and said " I can not believe the level this is trading at, it must be a buy " ? Me, you and millions of others have done this and are still doing it daily. I believe that before this is over we will see that people in general will have become so terrified of the financial markets that they will not want anything to do with them. Once they have been deceived by what they thought was a once in a lifetime opportunity to own GOOGLE at $360 or Intuitive Surgical at $210 or GE at $25 or Intel at $17 after all these had all been cut in half only to see these issues lose another 30%, 40%, 50% or more from their buy price. People will be shell shocked and BROKE. I hate to keep sounding like a pessimist because by nature I truly am an opportunistic person. I just have had the unfortunate experience of losing a small fortune ( actually it was quite sizable ) by betting the wrong way at the wrong time in the face of over whelming economic statistics just because I didn't think it could go any lower. Well lesson learned. The path of least resistance is always the easiest path to travel.