Man, this is messed! And, the story of IRVING...

OK, I'm reading more and more disturbing things over the weekend. I think that Paulson and Bernanke are actually Ricky Jay and his 52 assistants. The magician/actor who often appears in David Mamet films. I mean, these guys are something else. Now we are going to inject money into the insurers! And, now AIG is asking for more than the $80 BILLION they said they didn't even need! They now are up to $120 BIL and growing! There is NO CAP on this spending! IT IS INSANE! The inmates are running the aslym, and NONE of it has shown or will show it works! I think we should just do what we are going to do once O'Bama wins anyway and just declare capitalism DEAD and admit we are a socialist nation and that the French and Europeans have had it right all along and we were fools for saying that Capitalism is the best system. I mean, let's just call it what it is, because we have now Nationalized companies, and we are bailing everyone out who has enough lobbying power to put pressure on the powers that be, so we are a Socialist nation, its clear. It's amazing, no one says a peep but there's no way anyone can deny the facts and they are pretty freakin' clear that we now are the world's largest socialist regime. What truly sucks is, we the taxpayers are on the hook for socialism and we don't even get Healthcare! I mean, if we're going to be a Socialist country, at least give everyone Health care! That's one of the benefits of being socialist, you have nationalized health care. We don't even get that! I keep praying that there will be a mass rally and that taxpayers will be heard because this is taxation without representation to its FULLEST! What taxpayer is for bailing out all these companies? No one I know, people were sold a BS bill of goods that the stock market would crash and burn if the bill wasn't passed, therefore it had to be passed! Well, I said it then and I'll say it again, and the facts speak for themselves, the stock market has declined precipitously since they passed the bailout plan obviously. I've said it 100 times, this will go down as the biggest CON JOB in the history of the US. This is bigger than the Brinks Job! And, its only going to get worse, all in the name of helping US. WRONG! It's hurting us, and it's hurting our children and their children! If people can not afford to live in a house, they should not live there, period. I'd like to live in a 100 acre mansion by the sea, with 17 bedrooms, 3 maids quarters and outside are parked my 7 Bentley's and 13 Ferrari's! Unfortunately, I can't afford that! So, no one should hand it to me! If I make enough money and decide to afford that, that's my choice, but I probably never will (and I doubt I'd ever waste so much money, I'd probably cut back to only 11 Ferrari's, hehe!). What BEST case is going to happen, in my opinion, is that they will continue to try to prop up the economy and housing markets (and stock markets) and fail worse and worse and people will lose their 401Ks (did you notice they are all using MY coined phrase! Turning their 401k into their 201k! That was MY LINE! RRRRG! OK, so thats really the best case scenario. EVERYTHING the Fed has done the market spits in its face. What are they going to do then? Refund everyone's stock losses? This is just INSANE!

OK< that's my rant for the night! Hope you enjoyed it! Now let me tell you why this market has a LONG LONG LONG way DOWN to go and why we are stuck for a long while..

Let me tell you about THE STORY OF IRVING...

So, a good friend of mine called me up last week and said that his father was very upset and he was worried about his mother, who isn't in great health anyway. His father, Irving, had everything he worked his whole life for in the stock market, outside his home. His father and mother are both in their mid-70s. They have been retired for a few years, Irving had owned a restaurant and was a hard worker his whole life. Irving has lost roughly 50% of his worth in the last few months. He was worth roughly $1 MIL and now he is worth roughly $500,000. That's a lot of money for a lot of people, he's not dead broke obviously but they are rightly concerned. My friend gave my number to his parents to call me and wanted to make sure it was ok they called me. Obviously it ok with me I said, though I told him to make sure they know I'm not licensed or registered, I'm just a dude with an opinion, and I can't give them advice. No problem. I spoke to Irving for about 2 hours, he told me how upset they are, how their advisers are saying they should not only not sell anything, they should buy MORE! Irving doesn't have any more money, so he can't. He asked me what I thought about the market, and I told him what I say here, verbatim, the market I believe is going to 4500 or lower and that I personally don't own a single stock long, nor would I for more than a trade. What was sad is that he kept talking to himself almost, as though to convince himself that it was the right thing to hold on and pray. I asked him if he had considered maybe doing a 50/50 since he clearly wasn't going to sell it all no matter what. I asked him if he had heard of covered calls to protect and hedge his positions. He had vague recollection of someone saying he should do that, but had no clue what it was and he said "but what happens when GE comes back, it'll cost me money to do that!"

And there you have it in a nutshell, there are so many Irvings (and they aren't all Jewish!) that are so used to the market eventually/supposedly coming back that they won't sell. That is until complete capitulation, which will ultimately mark a TRUE bottom, at least for that moment in time. But, we are a LONG way from that, my friends! Thing is, Irving and his wife could survive and live the life they are used to on that $500,000 and have their house as excess security, but because he will stubbornly hold it all and pray, it is very likely he will be forced to do things he wasn't planning on doing. Maybe he has to work again, maybe he has to take a loan against his home, which may be problematic as prices decline further, or maybe he is just screwed and has to ask the government for help. He may need a bailout if his house declines too much in value. Forget the other issues, which include the fact that he has to take care of his oldest daughter who is basically an invalid and in a home for his illness, or the fact he has to help his son, my friend, who was laid off. If I could give him literal and personal advice, what would it be? SELL EVERYTHING IMMEDIATELY, EAT THE LOSS and move on! He's been in the market for 50 years anyway, so much of the "loss" was gains he previously got. My guess is he's still "up" overall. 50 years ago GE was a lot lower, even with the drop it's had! If it was my money I'd be so far out of this market your head would spin off! SELL SELL SELL! But, truth is, even if I told him that, he wouldn't sell, HOPE is, after all, a four letter word!'

This week is going to be volatile, thats all I can promise you at this point. I'm iffy both ways. I'm thinking lower, but we certainly can get a decent bounce, so I'm staying neutral this instant. Sorry, but thats what I feel, so thats what I say! We'll get a clearer picture soon, until then keep the powder dry and remember - CASH IS KING!

RULE!

Waxie