Hand On Hats

We have read through countless articles on the economy at this point.

We have major concerns about unemployment and the market.

From the point of view of the market, we've read predictions and proclamations regarding the DOW and S&P that go all over the map. The range of predictions is optimistic running to extreme pessimism. We have no crystal ball but we do know the environment is very rough indeed.

On the optimistic side, we've read that there will be a so called bottom to the market where a certain sense of stability or calmness occurs. We thought that might have happened a few weeks ago with the DOW languishing in the 8000s. Clearly that was not the bottom. Now we are into the 6000s and there's no reason to think that this is the bottom either.

Getting back to optimism, most long time financial types talk about the way that the S&P and DOW leave a recession. The thinking is that anywhere from say 3 to 9 months prior to the tanking of layoffs and corporate downturn, there occurs a period of rise to the DOW and S&P. They talk about a period of very fast "swooping" growth that has occurred in the past right before the end of previous recessions. How we would like that!

On the not so optimistic side, we've read the very extreme position that it will take over a decade for the DOW to return to 12,000 territory.

Let's try to keep a few things in mind -

First bad news sells - the worse the news, the better. People become glued to the media and there is a frothing in the MSM. Watch out for it and keep a perspective on this.

Second, many of the predictions were made by people who have intensely partisan opinions. They either want Obama to succeed or they want him to fabulously fail. Also these same people do not mind in the least little bit, skewering their answers to reporters questions in order to blow on the embers of contempt or concern for Obama. So keep this in mind as well.

Reuters: Wall St Week Ahead: GM, banks' fate to keep investors on edge

...investors are unlikely to curb their flight from risk this week, putting Wall Street on track for another brutal sell-off.