GKM

Thursday Outlook: Commodities, Emerging Markets

How pathetic. Morgan Stanley upgrades the financials to try to build a floor. When was the last time anything that came out of a bankers mouth was trustworthy? Someone help me out here please. MBIA and Ambac: "we're a-okay". Lehman: "we're raising capital because the market wants us to". What a joke.

MS must be worried about themselves and what might happen if things continue to deteriorate. To me they are running on the treadmill and its about to notch up to 10. Lehman's down 8% pre-market. How pathetic.

The Fed Won't Save Us, But Here's How to Make Money - Barron's Interview with Jeremy Grantham

Grantham has the right ideas but even he seems to be missing a key point. The housing market will correct obviously, but it won't be just to the mean. The mean wouldn't be the mean unless there are data points above and below the line.

To correct for the unproductive employment of capital into over-priced housing the market will have to correct substantially. Either that or the inflation rate will have to be kinked into a hockey stick shape to catch the falling prices. Long gold and short housing will be a play for months to come.

By the way, that 1100 on the S&P as the forecast for the bottom is what most chartologists would say as the target level. There will be lots of buying support trying to turn the market once it gets there so it will likely be a self-fulfilling prophecy.