fly fishing in keys as i type this

As you know, I am well aware of the problems out there. I just have a very hard time believing that the market will unravel when the earnings picture remains quite positive. This doesn’t mean we can’t correct and undergo downturns, but are we about to tank to -20% bear market levels? I would say there is very little chance. But hey, I’ve been very wrong before….

You may prove to be right, but David right now has as much chance for the present. As has been noted before , great rallies often end on good news. Right now it is beginning to appear that the market may unravel one thread at a time, with none of those threads actually being the cause. First CIT, then Am Fin and Dubai, and now a small dollar rally. If this continues , this market will die slowly from numerous small incidents whose cumulative effects are what matters. Also look at events all over the world hitting the financial markets: Greece and the PIGS group have their problems. Germany is down on industrial production for the first time in many years. I think the list is quite likely to continue to grow slowly until we reach that proverbial straw, which I see coming before the end of Q12010.

from your friends at SA:

http://seekingalpha.com/article/177009-economic-indicators-suggest-investing-caution?source=hp_wc

David says “margin expansion is behind us.” You think its going to continue. One of you is wrong.

IMHO margin expansion is near the end or is possibly over, its definitely decelerating. While I believe labor will remain weak other input costs have risen substantially over the past year, just take a look at commodities.

Fed will not raise 1H of ’10. Stimulus II will be very large and will keep this going into next year once they realize the blips were caused by Stimulus I and cannot be repeated.

Dollar will gyrate but general direction should be down.

Invest accordingly. IMHO. Still waiting for your opinion on the rare earth sector. Peace brother.