Boy was I wrong...
I guess all the kings horses & all the kings men couldnt put the market or the economy together again.
It now seems that the forces of contraction, especially with credit, are overwhelming even the most dynamic & unconventional efforts to stop it. The economic data will continue to reflect a very weak economy & plenty of uncertainty about the near & intermediate termoutlook. Corporate reports will also reflect the weakness & serious economic challenges to their businesses going out 3-9 months. The election will add further uncertainty to the situation...and lets hope its a clean election with no uncertainty about the outcome, i.e. contested election. While it looks as though the financial system will survive, the resulting economy & business enviroment will remain highly uncertain & risky for the next few months & quarters.
Suffice to say...I'm alot less bullish.


Bear Market Bailout

Don't Fight The Treasury, especially if they are backed up by the FED, SEC, Congress, & The President

After watching the Sunday morning news programs, I have completely rethunk my macro thesis...most importantly for the short term.

It has become increasingly obvious that the Treasury secretary, Ben Bernanke, Congress, & the President have gotten together & decided that they will not allow free markets to be free, that freedom would do bad things, so the financial super heros have come together & agreed to use all their powers to stop the free markets from being free.

Their reasoning & purpose is irrelevant. Fear is the motivation. They have the powers & tools to do what they want with no checks or balances....at least thats what they want.

Bazooka...haha, we are about to use the equivalent of a nuclear bomb to recapitalize the entire banking & financial system of the United States. The collateral damage is secondary to the task at hand.

We are also going to help out China, Japan, Saudi Arabia, & many other foreign governments & corporations...this is vitally necessary in order to get them to lend us more money in order to have enough money to execute the bailout plan.

The urgency & cooperation is scary, and seems to suggest that it's a done deal.

If this goes forward, banks are fine. The consumer will get a break in the form of easing credit & another stimulus package. Housing will most certainly get some more help. The automobile industry already begging, will now get its bailout.

I wouldn't be at all surprised if the FED decides to add its two cents by cutting interest rates adding even more power to the bailout punch.

Finally, the focus on & demonizing of the evil short sellers seems to have a lot of popular support, so maintaining short positions or viewpoints will be at an even greater disadvantage than they usually are.

While I am still convinced that the general economy has its problems, all this artificial support & stimulus will have an immediate & important impact on the general economy & probably the mood & confidence of the public. Bear market rallies can be quite strong & powerful.

Perfect timing to make sure the election is a happy one & the holiday shopping season is a profitable one.In short, I'm bullish on America!