A. DB-

Thanks for the reply. You bring up some
really good points. My mental block on
accepting this rally after August or so
is that the same problems that got us
into this mess are still there, and we
have fired some pretty huge fiscal and
monetary ammo at this.

MBS's are still there, but "We the
People" have assumed these risks through
the Fed purchasing $1.25 Trillion at
par. We are printing money to buy not
just treasuries, but JUNK. I remember
when we would laugh at third world
countries for doing this.

I also view unemployment as being a
leading indicator for our financial
problems. Here is why. This is not a
normal, business cycle downturn, but a
bursting of a credit bubble. This has
happened twice recently: 1929 USA and
Japan in the 1990's (Note both countries
were net creditors going into the credit
bursting, not the world's largest
debtor.) The consumer was leveraged up
as much as possible going into this
recession. Any financial problems
pre-2008 were papered over by home
equity withdrawls. Now that is
impossible due to lack of equity and
lack of credit. The next step for the
over-leveraged consumer is to turn to
his credit cards. Banks are slashing
credit limits, jacking up the rates and
low and behold defaults are rising. Now
Mr. Overleveraed Consumer loses his job.
He has now where to turn but jingle
mail and credit defaults. Banks will
have huge write downs the longer
unemployment stays high and not even the
rose-colored glasses wearing Fed sees
that changing.

Lack of credit and lack of jobs is not
the recipe for a "sustainable recovery".
The Fed is trying its best to increase
the money supply faster than credit is
being destroyed, but they can't without
torching the USD. I think the DXY and
gold are proof enough of this point. I
sure don't see what the market is
anticipating.

I did like the market in March in April,
but I think it is as optimistic now as
it was pessimistic then. I admit I
missed a large part of this rally by
givning up on it way to soon.

A. The only one I own : SLX,
too hard pick a winner out all of them