If you did not catch what happened overseas today, the global market had a “Black” day.  So I’ll start by reiterating what I said late last week: “We achieved stall speed just like Greenspan said we would. Now were screwed, the engine of growth has seized and the foreign investors are going to back out. I think the loss taken so far is not really that bad given where this thing eventually ends up. I still believe I will walk away from this year slightly positive, which is what my goal was early on.”

I moved into bonds last week and if there is still anyone out there following me, then hopefully you moved too because as Ian Anderson muses about in the tune Locomotive Breath – “God stole the handle and the train won't stop going - No way to slow down”.  I was very unimpressed by the speech that GW gave.  It instilled me with absolutely zero confidence despite the fact that his 140 billion dollar stimulus packages doubled anything proposed by the left.  The presidents reluctance to admit there is a problem and any possible pragmatism by congress being undercut by election fervor, equates to inadequacy.  The train is coming of the tracks and the engineers are arguing about who’s fault it is.

The goal now is to wait until some kind of definable channel develops.  Unfortunately, this may mean sitting on the sidelines during most of the next rally.  Basically, I’m looking at the tech bubble burst as my model for this collapse.  The strategy will be to use our minimal moves to seize a few percent here and there and count on bonds to due the heavy lifting. 

Until we have some kind of channel to work with, any move into the market would be unadvisable.  Given the limited moves, we have to really wait until the odds are stacked in our favor before we attempt to time.

The pseudo silver lining in this cloud, is going to be the crushing of the L-funds.  As the average Joe watches his retirement get set back many years, the idea of forcing everyone into the L-funds will hopefully become a distant memory.  This doesn’t help the FERs baby boomer, and for all of you out there –you have my sympathy. 

I won’t be surprised if this recession (let’s call it what it is – because it’s here) – doesn’t lend credibility to our cause to stop the limitation of IFT’s.  Who really cares about a couple hundred dollars, when your losing ten’s of thousands?