Markets Down, Not Out

The biggest thing to remember is that Wall Street is not the economy. The bad news is that the economy might be worse than Wall Street. It is coming painfully clear that the wheels are coming off, all over the world. The US is actually doing okay. We are further along in this cycle of debt destruction than the EU. That is why you are seeing our dollar strengthen against the the Euro. If terms of suckiness, we are just a little less sucky. Now that is saying something.

Tomorrow, you will wake up have your morning coffee and see that the major economies of the world have all collectively decided to lower rates in a major move. I would expect .50 to .75% before the markets open up here at home. If not by open, no later than ten o'clock.

Tuesday is for bounces. We have seen this over the last few weeks. It started to happen because of all the Sunday investing news, Fannie & Freddie, and Lehman Brothers Bankruptcy all happened on Sunday. Monday has been freakishly bad over the last few weeks.

I know that I have been lack posting. Even you followed you knew that I was high on EWZ, the Brazilian EFT. If you hadn't gotten out before now...I'm sorry. I sold out at $64 taking my medicine back on 9/9/08. I was hoping for a bounce, saw it and took advantage. The bottom has really fallen out now...it closed just north of $42 today. It dipped all the way down under $38 earlier. The EFT is made up of financials and commodities...two big no nos in this market.

Want to know what I am looking for right now? Nat City to fail in the coming days. Fifth Third and Key to follow. It doesn't take a rocket scientist to figure that one out. I would go highly defensive at this time. Gold, I'm not sold on right now. I see too many gold hawks screaming for our fiat currency to fail. If I were looking at equities it would be highly defensive...Pepsi, McDonalds, Wal-Mart, Colgate, and PG. None of these names have fallen too much, pay dividends, are not financials, and will be around when all of this finally calms down.

This may be bad, but this is not a depression. Nor do I think it will get to that level. God, I hope it doesn't get to that level. Good luck.