And par for the course in 2009, Washington will be crackin’ the whip:

First, the Federal Open Market Committee will reveal their latest interest rate decision today. Chances are they won’t even hint at raising rates for the foreseeable future, but the Street is in knots over whether they will extend quantitative easing plans. We care, but only a little… the damage has been done. More on that in a second.

Then after the Fed, we should start hearing whispers from the G-20 meeting in Pittsburg, which officially starts tomorrow. With world leaders mostly convinced the recovery is under way, we suspect talks of reform, regulation and exit strategies. Namely, they’ll be wondering what the hell to do about this:

The dollar — the money every G-20 nation holds in reserve — has quietly become little more than a carry trade currency. It’s lent at one of the lowest rates in the world. The biggest financial bailouts in modern history have made prospects for dollar inflation pretty high, to say the least. And with every day of this “recovery,” it’s worse.

More QE from the Fed or dollar reserve jitters from the G-20 should mark the next move for the dollar… we’ll keep an eye on it for you.

“The fact that the dollar has been the reserve currency of the world has allowed us to live beyond our means for a long enough period of time to get into trouble,” our executive publisher Addison Wiggin told the Pittsburg Post Gazette yesterday. “That’s what the crisis is. The deficit spending in Washington is the biggest threat to the dollar’s status as the reserve currency.”

“Most of our spending is financed through the credit market, which is heavily dependent on our ability to attract capital from the rest of the world. That ability is in serious jeopardy.”

“The popular explanation for dollar weakness is that investors have a fresh appetite for risk,” Chris Mayer adds. “But maybe there is more to it than that. As one analyst said, if the dollar is the new yen, ‘The greenback is in real danger.’ That’s because foreigners hold a lot of dollar assets, and selling them to swap into higher-yielding currencies could continue to keep fresh pressure on the dollar.

“This loss of purchasing power is like a subtle tax and eats away at your wealth. That’s why I’m bullish on gold and oil and other real assets. As the dollar weakens, these assets ought to reprice and hold their own.”

Source: The Dollar’s Next Move

Whether these tests will truly scrutinize the mass of numbers and so-called “toxic assets” on banks’ balance sheets remains to be seen.

Right now, many banks would surely get a big, fat “F” – for failure.

And if my recent conversations with friends, former colleagues, and contacts in the business world are a good gauge, ordinary Americans are failing their own “stress tests,” too.

I’m not talking about the kind of test where they hook you up to a heart monitor and you run on a treadmill, but rather a financial stress test. Are you passing the test?

Had Some Bad Luck? Don’t Turn To The Stock Market For A Financial Bailout

Some friends of mine, who unfortunately became unemployed recently, are now trying to make up for the lost paycheck by taking on additional investment risk in their portfolios. And while the motive is understandable, it could have disastrous results.

Simply put, if you want to suffer certain losses, just trade because you have to, not because it makes any sense.

The pressure of having to put food on the table will lead to unwise choices like neglecting investment discipline and selling winners too soon.

If This Sounds Like You, Stop Investing Now

For example, one guy I know loaded up on financial stocks in December and lost his shirt. He felt so desperate to try to reach his magic monthly number that he took on way too much risk.

He did the same thing again last night, adding Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) to his portfolio. The move thankfully paid off for him this morning, but had the trade gone against him, he would likely have been in a world of hurt.

Of course, not everyone is trading to replace a lost paycheck. Some have merely become more active in an attempt to gain back the 50% or so that they’ve lost in their investment or retirement accounts.

Now, as someone who writes for investment newsletters and trading services for a living, I’m probably not doing myself any favors with the following advice: If you recognize yourself in the above descriptions, stop trading!

Three Steps To Handle The Stock Market’s Stress Test

Don’t get me wrong: Investing can be a lot of fun. But you need to do it with a cool head and sensible motives. When investors are emotional or stressed out, one a bad trade can have a domino effect and cascade into numerous losses, as emotions take over and cloud judgment even further in trying to make up for losses.

Right now, many investors are feeling overwhelmed and frightened, wondering if they’ll ever get their nest eggs back.

It’s important not to do anything rash.

~ Don’t pull all of your money out of the markets. Mutual fund industry research has shown that investors typically withdraw their money from funds at precisely the wrong time.

~ Stick with people you trust. If you’ve worked with a financial advisor, newsletter, or investment program for a while, stay the course if they’ve produced results in the past.

~ If you’ve been managing your own money and now feel like you need some help, check out the range of investment services that the Smart Profits Report team produces. We’ve designed our portfolio of products to meet the needs of just about any investor and their own personal portfolio choices.

In addition, check out my colleague Alex Green’s book, The Gone Fishin’ Portfolio. He outlines exactly how you should allocate assets in your portfolio to give you the greatest chance of solid returns with less volatility. He also gives a method that shows you the least expensive way to invest. Keep in mind, this is for your long-term money.

The Smart Profits Bottom Line

Again, if you want to make money in this stock market, remember that you need to do it because you want to rather than because you have to. This is a nerve-wracking time and I’d hate to see anyone need an actual stress test caused by ill-judged overtrading.

And I’ll leave you with this positive nugget: We’re probably not too far away from what could be the greatest buying opportunity of our lifetimes. Be sure that you’re in a position to take advantage of it by not panicking and losing your capital now because you’re grasping for trades in order to make up for previous losses.

Hoping your long go up and your shorts go down.

Source: Can You Pass The Stock Market’s “Stress Test?” These Three Steps Will Help

We’ve seen so many shock and horror movies over the years. We recognize the dialog. But this is no Hollywood thriller. This is real life.

It is like a Netscape News story:

“WASHINGTON (AP) – On a single day filled with staggering sums, the Obama administration, Federal Reserve and Senate attacked the deepening economic crisis Tuesday with actions that could throw as much as $3 trillion more in government and private funds into the fight against frozen credit markets and rising joblessness.

“…Wall Street investors sent stocks plunging, objecting that new rescue details from the government were too sparse. The Dow Jones industrials dropped 382 points.

“…shortly after Senate passage of an $838 billion emergency economic stimulus bill cleared the way for talks with the House… Separately, Treasury Secretary Timothy Geithner outlined plans for spending much of the $350 billion in financial bailout money recently cleared by Congress, and the Federal Reserve announced it would commit up to $1 trillion to make loans more widely available to consumers.”

GM said it was cutting 10,000 jobs…and reducing executives’ pay.

Fannie and Freddie are likely to need $200 billion more to stay in business, say regulators.

And Tim Geithner’s new bank bailout program may cost $2 trillion.

Meanwhile, practically every business and every family in America is looking for ways to cut costs. Unfortunately, one person’s cost-cutting is another person’s income. So, incomes are going down too. Then, people have to cut costs even more.

“Let’s not mince words…this looks an awful lot like the beginning of the second Great Depression,” says Nobel-prize winning economist Paul Krugman.

Paul Krugman is wrong about a great many things; but he’s right about this. This is not a recession. It’s a depression.

What’s the difference? Some economists say a depression takes 10% off the GDP. Some say it is a recession that persists for more than a year. Most have no clue.

The real difference is this: a recession is a pause in an otherwise healthy economy. A depression, on the other hand, is when the economy drops dead. There’s no point in putting on the wires or strapping on the inhaler, there has been too much brain damage already. The best you could hope to do is to keep the body alive. But it would be a vegetable. Better to let it go…quickly.

But we’re not giving advice to the Obama team. So far, they haven’t asked. Instead, they’ve got the defibrillators in their hands.

“TARP II” is how the International Herald Tribune defines Geithner’s new program. Bold in scale. Vague in detail. Geithner says he hopes to bring in private money to fund the bailout. How? We can’t imagine. It’s one thing for government to try to revive a corpse with public (mostly imaginary) money. It’s quite another for private investors to waste their own time and money. ‘What’s in it for me?’ they’re likely to answer. And if there were anything in it for them, they’d already be investing in it. It’s not as if there aren’t plenty of opportunities on the Big Board. The financial sector is down 2/3rds to 3/4s from its high. Anyone who thinks there’s money to be made can take his chances.

Instead of buying, investors are selling. Just look at what happened to the Dow yesterday. They’re selling because they think there could be a lot more pain and suffering still to come in the banking sector – and in the economy at large. And they’re right.

Nouriel Roubini, who has become a celebrity thanks to his Daily Reckoning-style warnings, says the losses will reach $3.6 trillion. We don’t know what the ultimate figure will be, but it is bound to be a big number. This depression is just beginning. So far, we have only had the shock in the financial industry. The real damage will come in the economy…which is only now reacting to the financial losses.

Just wait until we get deeper into this film…that’s when the real blood and gore will come.

*** “This strategy will not work,” writes Haag Sherman in Barrons. “Asset values will continue to decline, regardless of how much money the government borrows, even it if borrows printed money from the Fed. And in that case, the government risks another, more calamitous crisis – a run on US Treasury securities.”

Treasuries are going down. Everyone wonders why. Is it because fear is easing…or increasing? On the one hand, spreads between private debt and federal debt are narrowing. This signals an increase in confidence. Investors are less panicky than they were a few weeks ago. Despite Obama’s “catastrophe” talk, they seem to think we’ll muddle through somehow.

So, they figure that they can leave the safety of U.S. Treasuries and venture out where they might be able to earn some money. With 10-year yields at only 3%, investors need to look elsewhere to get any income. Now, they appear to be at least poking their heads up above the trench walls.

On the other hand, there is probably a growing fear that the feds’ efforts to create ‘positive inflation’ will blow their heads off. The feds are certainly putting a lot of cash and credit into the system. At some point, the crunch will reach its natural end and then all this unnatural cash will produce a stimulating effect. That is, people will be motivated to get rid of it. When that happens – if not before – you’ll see the ‘run on U.S. Treasury securities’ that Sherman mentions, along with a run on other forms of U.S. paper, notably the dollar.

For the time being, we are still in the process of ‘price discovery.’ Last year, investors suddenly realized that debtors couldn’t pay their bills…that assets weren’t worth what people paid for them…that collateral was declining in price, making many erstwhile valuable credits worthless…and that revenue streams were not sufficient to maintain whole sectors of industry and commerce. They panicked. That is why these episodes were called “panics” in the 19th century. Nobody knows which assets are good…and which are bad…. or who’s solvent and who’s not…or which businesses can survive and which can’t. Everyone tries to hold onto to what he’s got…trusting no one and nothing…until the market has time to discover proper prices for things in the new post-bubble era.

In the 19th century…up to the Panic of 1921…this all happened fairly quickly. And then the economy got up off the ground, dusted itself off, and went on its way.

But since the Hoover Administration, the meddlers have intervened. Now, they try to stop the process of price discovery…by keeping zombie businesses alive…by loaning money to brain-damaged industries…and nursing the cadavers and corpses with trillions in taxpayers’ money.

Mr. Sherman continues…

“…the US government’s balance sheet looks increasingly like that of a Third World country. America’s debt-to-GDP ratio is more than 100%, including the nationalized debt of the two mortgage giants Fannie Mae and Freddie Mac. Budget deficits of $1 trillion are projected for years to come. Worse yet, America’s pension and medical obligations to the baby-boom generation and those that follow are estimated to be considerably more than $50 trillion.

“As the US government prints more money to address the crises, investors will realize that are being repaid in a much diminished currency. For the moment, foreign investors have remained relatively firm. But, at some point, foreign and domestic investors will consider the US government’s terrible fiscal position, and they will start dumping debt.”

*** That may happen next week. It may happen years from now. Remember, there are always back-eddies and countercurrents – even in the biggest flood. We’ve had a rebound, but it has been very slight. In the ’30s stocks rallied six times – more than 20% each time – before finally beginning a new bull market. And several times, investors thought the crisis was over…only to see it hit again, harder.

Our advice: stay in investments that you will not want to sell in the next ten years. What kind of investments are those? They’re investments with income and/or capital that is reliable. Forests. Down-market retailers. Apartment houses with good tenants. Farms, ranches providing foodstuffs at good prices. Basic service industries with decent revenues. Nothing fancy. The world is moving away from fancy. You want to be the low-cost provider of whatever goods or services people need.

And of course, stay in gold. Our favorite yellow metal will prove to be one of the safest bets for a store of wealth in this topsy-turvy economy. Yesterday, while Wall Street was sinking on the news of Geithner’s stimulus plan, investors flocked to their safe haven: gold. After dipping a bit on Monday, gold for April delivery jumped $21.40 to settle at $914.20 an ounce.

As we’ve pointed out many times, during a period of economic turmoil, investors increasingly turn to gold as a buffer against market volatility. We don’t know about you, but we have the sneaking suspicion that this ‘volatility’ in the markets is here to stay, at least in the foreseeable future. And in turn, gold will have a lot higher to go.

*** Oh no! The greatest central banker of our time…is going…going…Gono! Reports in the Financial Times this morning tell us that Gideon Gono has been replaced in a “power sharing” move by a fellow named Tendai Biti.

Poor Mr. Biti has his work cut out for him. His predecessor made a mess of Zimbabwe’s economy. But Mr. Biti looks like just the man to correct it. He apparently has no training in economics. That’s a definite plus. The paper describes him as a “44-year old lawyer [who] was a student leader active on human rights issues.”

Source: Depression II: The Horror

Stuffed with $275 billion worth of tax cuts for both businesses and consumers, this new proposal also has $550 billion earmarked for spending on healthcare, infrastructure, and education.

But it wouldn’t be Congress without some hearty waffling. And while Democratic leaders unveiled the bill today, expect those numbers to fluctuate as the plan works its way through the Capitol. The goal is to get an agreement in place for Obama to sign by mid February.

And speaking multi-billion dollar aid packages…

* * * * * * * * * *

Please, Sir… Can We Have Some More?

It looks like lawmakers are going to have to set aside a few more pennies for Bank of America (NYSE: BAC).

Having already received $25 billion from the Treasury’s Troubled Asset Relief Program (TARP), BAC shares got crushed today amid fresh concerns that losses at Merrill Lynch (which Bank of America bought out) will prove too much for the bank to handle by itself. Government officials are currently mulling over another financial aid package similar to the one it threw to Citigroup (NYSE: C) in November.

This could include a new cash injection from the Treasury’s $700 billion financial bailout package, or government guarantees against losses on bad loans, the earlier version of which was broken down buy our Guest Editor William Patalon III in Banks, Bailouts and Your Money. Both Obama and Federal Reserve chairman Ben Bernanke have made strong calls this week for the second $350 billion of the $700 billion total to be immediately made available.

According to the Wall Street Journal, the government and Bank of America were close to reaching an agreement on Wednesday evening. And while the bank has so far refused to comment on the story, it should make for an interesting fourth quarter and full-year earnings conference call next Tuesday.

* * * * * * * * * *

European Central Bank Swings Its Monetary Axe Again

Hot on the heels of the Federal Reserve, Bank of England, and other central banks, the European Central Bank (ECB), which controls monetary policy for the Eurozone nations, today chopped its own interest rate by a further 0.5%. The benchmark lending rate of 2% now equals the low from 2005.

The move comes after a shock 0.75% cut in December, as the Eurozone economy faces its first recession since the euro currency was adopted 10 years ago.

And Wednesday’s report that showed a 7.7% annualized slump in Eurozone industrial production in November seems to have sealed the deal for another cut. This despite ECB president Jean-Claude Trichet hinting recently that the bank may have left rates unchanged this month in order to first gauge the impact of the previous cut.

Barclays Capital says fourth quarter Eurozone industrial production is expected to contract by 3.6% – the worst performance since 1975 – with quarterly GDP growth shrinking by 1.5%.

Unlike some other central banks, though, the ECB’s staunch focus on controlling inflation has caused it to lag its counterparts in terms of monetary policy. This means it has more wiggle room available for further, meaningful rate cuts in the face of an expected deflationary period later this year. This strategy was used by India late last October when it cut its overnight lending rate from 9% to 8% to stave of a recession. To learn more, read India Wields Its Monetary Policy Axe…

We wrap up today with news just in from our healthcare expert Marc Lichtenfeld, who’s spent this week at the JP Morgan Healthcare Conference in San Francisco…

* * * * * * * * * *

Biotech Lovefest In San Francisco

The only way to describe the action around Genentech (NYSE: DNA) and Medivation (Nasdaq: MDVN) at this year’s conference is a veritable lovefest.

While neither company dished out any new information, they both simply reinforced why investors should be bullish. The crowd was absolutely buzzing after Medivation CEO David Hung spoke, with a throng of people following him down the hall like paparazzi trying to get near Angelina and Brad.

Shares took a hit today, but I wouldn’t be surprised to see increased institutional interest in the stock over the coming months.

Accuray (Nasdaq: ARAY) also gave a solid presentation, which described its business. When pressed for answers regarding whether the firm is seeing a downturn in capital spending by hospitals and cancer centers, the company said it would address that issue on its January 29 earnings call.

Source: Will Congress Say “Yes, We Can” To A New $825 Billion Stimulus Package?

“We are considering all options and will soon announce definite steps to help the company overcome the current crisis as it is the question of saving jobs and an international brand,” Commerce and Industry Minister Kamal Nath said Monday. “The Prime Minister is closely monitoring the developments on Satyam.”

Indian authorities last Friday detained former Satyam Chairman B. Ramalinga Raju on charges of forgery, breach of trust and criminal conspiracy after the founder of India’s fourth-largest software exporter confessed to falsifying about $1 billion in cash on Satyam’s books and exaggerating his company’s profit margins.

The subsequent plunge of Satyam stock wiped out more than $2.2 billion of investor wealth, and sparked at least three class-action lawsuits in the United States, Bloomberg News reported.

However, the scandal also undermined India’s reputation for corporate governance and jeopardized the reputation of much of the nation’s prominent outsourcing industry, particularly in Satyam’s home base of Hyderabad. The government has responded with vigor -dismissing the company’s entire board of directors, and replacing it with a new three-man board.

The new, government-appointed board includes Deepak Parekh, chairman of the Housing Development Finance Corp., Kiran Karnik, former president of the National Association of Software Services Companies, and C. Achuthan, formerly of the Securities Exchange Board of India.

Parekh said earlier this week that Satyam has urgent “working capital issues” that need “immediate attention,” but noted that company accounts must first be re-audited before any real progress can be made there.

“No one has faith in the numbers being produced so far,” Parekh said. “Unless the accounts are restated, the outlook for Satyam can’t be the same.”

The board has named Deloitte Touche Tohmatsu International and KPMG International as auditors to replace PricewaterhouseCoopers International Ltd. in its first step to restore confidence at the company hit by fraud.

The new board must now hire new executives to fill the posts vacated by Raju and former Satyam Chief Financial Officer Srinivas Vadlamani, who was also arrested.

But it must also keep the company afloat while the delicate transition takes place -even as investor confidence wanes.

Satyam’s new board has already asked clients to accelerate payments, but the global financial crisis has left many businesses squeezed for cash and credit lines remain tight. If its situation doesn’t rapidly improve, Satyam could be faced with a mass exodus of clients, which would force the company to fold.

That would be a devastating development, for Satyam’s 53,000 employees would be lost. Those losses would not be limited to India, either. As many as 30% of Satyam’s employees -or about 15,900 people – live and work outside India, The International Herald Tribune reported.

The company’s demise would also disrupt such key operations as billing and computer-system maintenance among Satyam’s customers, which include some of the largest companies in the world. Most important of all, however, a collapse would undermine India’s vast IT sector, a showcase industry for the country with export earnings of more than $40 billion.

“The government cannot allow Satyam to plunge, as it will lead to the loss of jobs, hit foreign investment and the record economic growth,” C.L. Bansal, who teaches corporate law at Management Development Institute in Gurgaon, near the capital New Delhi, told Bloomberg. “The efforts at saving Satyam are aimed at actually salvaging the image of corporate India.”

With the jobs of 50,000-plus Satyam employees, as well as the health of India’s outsourcing industry, hanging in the balance, the government may have to intervene with a monetary bailout.

“The government stands ready to help out,” said interim board member Parekh. “But it depends on how big the hole is.”

Nath, the commerce and industry minister, said that the government will consider “topping up” the stimulus packages already under way in India.

“There are sectors not doing well and we are addressing those sectors by ensuring liquidity … perhaps another relief package for them which puts them in a level playing field in the global market,” Nath told reporters.

Source: Indian Government Ponders Satyam Bailout in Wake of Raju Scandal

“The Federal Reserve will do its part to promote economic recovery, but other policy measures will be needed as well,” Bernanke said during a speech at the London School of Economics. “The incoming administration and the Congress are currently discussing a substantial fiscal package that, if enacted, could provide a significant boost to economic activity. In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system.”

Bernanke’s remarks indicate he may be more concerned about the continuing chokehold banks have put on credit to companies and households than he is about offering immediate aid to homeowners facing foreclosure. He may also want to influence how Congress and President-elect Barack Obama plan to spend the next $350 million of the financial bailout fund.

Bernanke “is waking up to the reality that it is worse than he thought,”Janet Tavakoli, president and founder of Tavakoli Structured Finance in Chicago told Bloomberg News. “We don’t have any investment banks that are doing just fine. The whole situation is very tenuous.”

Bernanke denied the Fed is currently using “quantitative easing,” the radical approach taken by the Japanese authorities to pull the economy out of its “lost decade” in the 1990s. Instead, the central bank is targeting specific areas of the economy where liquidity has dried up for “credit easing”, reported the Guardian.

“Credit spreads are much wider and credit markets more dysfunctional in the United States today than was the case during the Japanese experiment,”Bernanke said.

Besides lowering the Federal Funds rate to a range of zero to 0.25%, the Fed’s has launched efforts to reduce credit spreads by purchasing long-term U.S. Treasuries and mortgage-backed securities, hoping to improve the functioning of private credit markets as well.

Meanwhile, the size and types of assets on the Fed’s balance sheet grew by more than more than $1 trillion last year, more than any time in the institution’s history. But even with the government printing presses running 24/7 to add new dollars to the financial system, Bernanke sees little danger of inflation.

“Banks are choosing to leave the great bulk of their excess reserves idle, in most cases on deposit with the Fed,”Bernanke said in London. “At this point with global economic activity weak, and commodity prices at low levels… we see little risk of inflation in the near term; indeed we expect inflation to continue to moderate.”

Public purchases of bad bank assets were once originally envisioned as the way to fix the economy under U.S. Treasury Secretary Henry Paulson’s Troubled Asset Relief Program, or TARP.  But the plan was later revised to instead inject liquidity into the banks to encourage lending.

That plan backfired when the banks instead used the funds for other purposes. As an ongoing Money Morning investigation has demonstrated, billions in U.S. bank rescue funds are financing buyouts worldwide – instead of lending at home. Some of those buyout deals are being done in markets as far away as China. Meanwhile, credit remains tight here in the U.S. market, a situation that could be alleviated if only the banks made the bailout money available to consumers in the form of loans.

Bernanke’s warning about toxic assets is “a call to use the second half of TARP for what it was intended for,”said Christopher Low, chief economist at FTN Financial in New York. “It was sold as something to get the mortgage market functioning again, which is something Congress would like to see because that gets back to homeowners.”

Source: Bernanke Casts Doubt on Stimulus, Says Fed May Buy Toxic Assets to Loosen Credit

I think about this action and how New Castle doesn’t have any auto plants anymore, but there are so many retired Chrysler workers here that it will certainly affect the local economy. Many of the residents rely on the pension program of Chrysler to maintain their lifestyles and had Chrysler gone under, New Castle would have taken several steps back.

The town has grown in the past 10 years and as we drove in from Indianapolis last night, I couldn’t help but notice the new stores and restaurants. There are three hotels now instead on the one that we used to have. There is a new Steak N Shake and a new White Castle. These may not be the highest paying jobs in the world, but it shows that the town is growing and attracting new business.

As I look forward to 2009 and what I would like to see, I guess my Christmas wish list would be for the economy to improve. In an appearance on CNBC’s Closing Bell the other night, I predicted that 2009 would be a good year for stocks. Maria Bartiromo was shocked when I said the market could be 20-30 percent higher next year.

The bailout of the automakers will help stem the tide to some degree. Unlike the financial bailout, this one is a more direct bailout of the middle-class. Hopefully we will see the labor market start to stabilize.

I have mentioned before in IDE that the market tends to improve before the economy and the economy improves before the labor market.

I have been looking at historical charts of the Dow and I found out something interesting the other day. I didn’t realize that from 1932 to 1935, in the heart of the Great Depression, the Dow moved from around 44 to up over 170. Did anyone else know this? This just goes to show how the market and the economy are not always in sync.

The job losses will likely continue through the first quarter at the very least. The recession will likely continue through the first quarter as well. But that doesn’t mean that the stock market will be lower for the first quarter.

As I was preparing for the interview on CNBC, I had a thought about how much fear there was towards the stock market. How telling is it that people are pouring money into treasuries when the yield on the 10-year note is right at 2.0 percent?

The old saying that “the market likes to climb a wall of worry” doesn’t begin to capture the pessimism we have right now. It is more like a mountain of fear than a wall of worry.

I would like to wish all of you a happy holiday season and may 2009 bring all of you massive profits in your investments.

Source: An Early Christmas Present For Detroit