The Truth Shall Set You Free

A lot can happen in a month. A new president gets elected based on the mantra of change, but immediately starts staffing his cabinet with hardcore Washington establishment players. Citigroup gets a bailout. The Big 3 automakers fly in on their corporate jets and ask for a bailout but get denied. The Fed takes on all kinds of debt and refuses to shed a light on what it has. And the market implodes.

I’ve spend most of the past few weeks playing the market to the downside, and I got out right before the rally last week and did pretty well. I had a chance to speak with many people over the holiday about the current market, and it still amazes me how people can’t take off their rosy glasses and see the downside that’s still out there. It seems to me like some form of denial since acknowledgement of the risks would require acknowledging that our entire financial system, including the dollar, could collapse, and some people can’t fathom this and refuse to admit it’s possible.

Check out The Financial Ninja’s Scary Fed Charts if you don’t think it’s possible. He also has a great article on the failed economic policies of our current “leaders.” Ron Paul offers his thoughts about the Fed and its failed policies, and continues to push a bill for the abolition of the Fed. Maybe as this continues to play out people will start to listen.

Then there’s the issue of people continuing to look for a bottom in the market. This isn’t a normal bear market. There is serious downside potential still out there, and in my opinion it’s coming soon.