Well, Black Friday’s sales figures are in and they are rather dark. Although, the usual spin doctors were out in full force implying people in between jobs are out shopping for things they don’t really need, this shorten holiday shopping season will most certainly be a dud.

According to the NY Times:

As the economy drifts listlessly going into this holiday season, thoughts of sugar-plumbed call options and zombie companies (Fannie Mae (FNM), Freddie Mac (FRE), and Citibank (C)) are dancing in the heads of day traders, fund managers and CNBC.

Hooray, hooray, everything is OK! Well, not quite. While Wall Street is feasting on the greatest secular bear market bounce in history, Main Street is experiencing persistent and formidable economic famine, the likes of which, have not been seen the Great Depression – which recorded the second greatest secular bear market bounce in history.

Last week, the Federal Reserve statistical release (G.17) reported on industrial production and capacity utilization for the economy.

“Industrial production rose 0.7 percent in September after an upwardly revised gain of 1.2 percent in August. For the third quarter as a whole, output advanced at an annual rate of 5.2 percent, the first quarterly gain since the first quarter of 2008 and the largest gain since the first quarter of 2005. Production in manufacturing increased 0.9 percent in September, and the index excluding motor vehicles and parts rose 0.5 percent. Mining output strengthened 0.7 percent, while the output of utilities fell 0.7 percent. At 98.5 percent of its 2002 average, total industrial production was 6.1 percent below its level of a year earlier. In September, the capacity utilization rate for total industry increased to 70.5 percent, a level 10.4 percentage points below its average for 1972 through 2008.”

With this week’s spike in the price of gold, I am puzzled over the lack of media coverage regarding Hong Kong’s recall of their physical gold, held in London, to relocate the yellow metal to their newly built depository vault, at Chek Lap Kok Airport.

What, if any, is the short-term financial impact, and longer-term the strategic implications, of this new regional hub? How odd that none of the business news channels offered any concrete answers for the rise to $1,000 in volatile trading.

This week may be an excellent time to take some profits from local Arizona stocks trading near their 52-week highs, such as ON Semiconductor Corp (ONNN), or Southern Copper Corp. (PCU), or Pinnacle West Capital Corp. (PNW). The bull market that started in March, with the S&P 500 Index testing 666, is showing signs of exhaustion, closing Friday at 1028.93. After the near-death experience of global markets from last September through March, including a 2008 negative return of 37 per cent for the S&P, taking profits will not be the worst decision one could make, at this time.

There are other headwinds facing the market to consider this week, as well. A slew of economic reports will hit the market; today the Chicago PMI, on Tuesday, ISM Mfg Index, and Construction Spending. On Wednesday, ADP Employment Report and Factory Orders; Thursday, Jobless Claims, Chain Store Sales, five different Treasury Auction announcements, and on Friday, the Bureau of Labor Statistics will announce the new unemployment figures, with the consensus predicting a loss of another 200,000 jobs and the unemployment rate rising from 9.4 per cent up to 9.6 per cent.

This story becomes stranger and stranger. FT.com reports the proposed settlement between the SEC and Bank of America (BAC) is being rejected by federal judge Jed Rakoff.

“I cannot ignore issues of responsibility,” said Jed Rakoff, a federal judge in New York, before ordering the SEC and BofA to submit detailed statements about the case by August 24.

The global economy is no longer in freefall. The rubbernecking by all markets in 2008 has morphed, short-term, into an abrupt reduction of consumer and municipal consumption. Furthermore, falling tax revenue, plus the injection of deficit federal spending equals the antithesis of growth. These simultaneous realities are the legacy from 2008. Meanwhile, cheap stocks and frantic money managers, with plenty of cash, are driving stock prices irrationally higher, despite reported weaker quarterly revenue and earning numbers for many companies.

The back-of-the-envelope calculation promoted by a growing chorus of pundits is cheering the equivalent of a sugar high. Everyone likes sweets but the consequences that follow vary. In today’s market, this sugar rush is erasing from memory last year’s brutal stock market and the lingering problems that caused it.

The one unmentionable topic that has become the non-barking canine is reinstating the Glass-Steagall Act after we repeal the Gramm-Leach-Bliley Act. Since no one else will say it aloud, I will. Let us re-erect supposedly harsh regulatory lines separating activities between commercial banks and investment banks. Once more, commercial banks may only underwrite government-issued bonds (which should keep them busy for years), thus avoiding the temptation of deposits. The remainder of underwriting securities goes to investment banks.

Before everyone reaches for his or her keyboard, telling me why repealing the Gramm-Leach-Bliley Act, which negated Glass-Steagall, is impractical and is a business-growing impediment, in the 21st century, that is precisely the dash of regulatory perspective we seriously need now.

In the beginning of the 1970s, the Volkswagen Beetle redefined the small car in America. Japanese cars at the time were not serious competitors, European two-seater sports cars were impractical for families, but the Beetle had hit all the rights notes. They dominated the category much as the Apple (AAPL) iPhone dominates its market today.

The world economy is far from bouncing back from 2008. Sometimes, the beginning of change is imperceptible. Do these facts mean that the US is soon finished and done as the last superpower? No, but keep in mind that the money in addition, talent that we poured into the space program of the 1960s and 1970, has yielded new products and industries from the 1980s until recently. What, if any, is the golden nugget we have in our back pocket this time to put us back on a winning economic path, long term?

I remember a conversation I once had with a 20 something. I ask her about the colorful tiger on her keychain. “Is that Tony the Tiger?” I asked. Or, was it the Exxon Tiger, I thought to myself.

She politely and proudly corrected me by announcing that it was Tigger, a character from the Disney Channel 1983-1986 television series “Welcome to Pooh Corner”. I am a child of the 1950s and she is a child of the 1970s. There was no need to mention Tigger first appeared in A.A. Milne’s 1928 book “The House at Pooh Corner”. The takeaway from that exchange is one man’s Tigger is another man’s Tony the Tiger. However, they are not the same nor are all green shoots.

So many market professionals missed reading last year's blue chip bear market of 2008 because they did not recognize the different markets that unfolded before their eyes throughout the year. If they disagree with this statement, then their clients' accounts should be up for 2008. If that sounds too obvious, bear with me.

In subsequent years, when Wal-Mart (WMT) Automobile Works sells more cars in America than Ford (F), we shall have forgotten the pain felt in 2009 that the bankruptcies General Motors (GMGMQ.PK)and Chrysler caused.

At the risk of being repetitive, if you look at the macro economic data and the upcoming political showdowns over taxing and spending, the markets are justified in listing with a negative bias, as we sail into the future.

Regrettably, this includes a shocking but probable casualty suffered by the U.S. debt obligation’s AAA credit rating, by 2012.

For those of you who believe like Robert De Niro’s character, Louis Cyphre, in the 1987 movie Angle Heart, that “the future isn’t what it used to be”, then the Money Show appearing in Las Vegas now is the place to be. In addition to the permabears, gold bugs, get-rich-quick traders, emerald colored horticulturist, emerging companies from China and natural resources income plays are on display.

If you believe as I do that the paper asset run from the early 1980s, added by 25 years of falling interest rates and inflation, deregulation and easy credit, is kaput, then the obvious question is how one diversifies intelligently investments today for tomorrow. Upon the first lap around the exhibitors’ floor, certain potential investment plays caught my attention.

Am I the only one who thinks that a trillion dollar deficit, proposed by the President-elect, is financially insane?

True, as we head into the deepest recession since the Great Depression of the 1930's, we may succeed in becoming the Great Depression II. However, before we touch a lit match to a fuse on a trillion dollar budget deficit (not to mention funding for the wars in Iraq and Afghanistan occuring outside the annual budget, which will surely detonate our country in the future), let us try to address the original problem.

Last Friday morning before the US stocks markets opened, the American financial system was staring into the abyss – again. Complete liquidation had occurred throughout the night in Asia and Europe, and now it was our turn. The US was given a death row reprieve, at least for now.

Virtually every measurement for wealth, even if casually examined since the year 2000, shows a decline in value or no change. The S & P 500, the DJIA, and NASDAQ, closed on December 29, 2000, at the levels of 1,320.28, at 10,786.85, and 2,341.70, respectively. Friday, October 24^th, their respective levels were 876.77, 8,378.95, and 1,202.27.

The rise and fall of debt is continuing without abatement. In the U.K., bankers refuse to write new mortgages. U.S. consumers are tapped out. Businesses are finding their cost of borrowing prohibitively expensive to continue certain lines of business, i.e. consumer auto leasing at Chrysler Financial, all the while asset-backed portfolio valuation is tenuous and overvalued, at best.

After 30 years, two generations of consumers and businesses relying on hyper-credit to generate an enviable lifestyle for the middle and working class, trumpeting painless capitalism – all winners, no losers, and endless increasing corporate profits, that bubble has burst.

It was beautiful. It was wow. It was unbelievably exciting. It was indescribable. It was beyond superlatives, and no, we are not talking about the spectacular display at the Beijing National Stadium. It was the bull rally last week on Wall Street, riding the back of falling oil prices and the reversal of the dollar.

The opening ceremony of the Games of the XXIX Olympiad was magical. The collective life force of 1.3 billion people that poured into the "Bird's Nest" had one objective; to make the world's viewers speechless. Mission accomplished. A gold medal for people of China; their repressive government...

To paraphrase Blanche DuBois from “A Streetcar Named Desire”, the Tennessee Williams 1948 Pulitzer Prize winner for Drama for a play, which later became a 1951 movie nominated for 11 Academy Awards, winning four Oscars, the stock market this past week, as well as for the month of July, was beholding the kindness of strangers. And the primary stranger for the stock market was the gyrating price of oil. Other commodity prices continued to recede from their late June/early July highs, too. The secondary stranger was a dastardly set of economic data that perturb the market in an unkindly manner.

Break out the Dramamine and the Bourbon because after a roller coaster ride like this, six flags has been scratched off my things to do list for the remainder of the summer of 2008. Much of it had to do with short covering, end-of-the-quarter window dressing, and good old fashion profit taking.

Like a wild jungle creature forced into a confrontation, but unsuccessful, this past week's stock market limped into the weekend, stunned, pensive, and little changed with Dow Jones Industrial Average [DJIA] closing at 11370.69, the Standard & Poor's 500 ending at 1256.76, and NASDAQ finishing its week at 2310.53. The Dow lost 125.88 for the week. Likewise, the S&P 500 dropped 2.92 and NASDAQ subtracted 27.75, respectively.

The CNBC midday rowdies strained themselves lifting a Hubble sized telescope looking for positive data points in the housing numbers. Existing home sales came out Thursday; they were down 2.4 percent in June, at a seasonally adjusted annual rate of 4.86 million units. New home sales for June, appearing Friday, was lower by .06 percent, on a seasonally adjusted annual rate of 530,000, from a revised upward May figure of 533,000.