The Stock Market Monday Morning and G7

Well, it was all up the Congress and the Senate to save our bacon last week and the result could not have been worse. Now we await the actions of the G-7 today, a band of merry men that just couldn't be more clueless. I will be watching the developments with great interest as the day progresses. The chief economist for the IMF said yesterday that the world markets could easily plunge another 20% if something isn't done immediately.

Morgan Stanley will be an interesting one to watch if things get hairy. Will Mitsubishi take their bat and ball and go home? I know I would. GM is a health care provider that happens to make cars and will not survive in my opinion. States, local governments, and countries are on the verge, and stock markets routinely yell "no mas" and shut down for days. Still not a sign of a bottom if you ask me, but I've been wrong before. Earnings should be horrible and the contagion should spread to industries other than financial in the coming weeks and months. Joe Sixpack has been destroyed through all this, and his 401k is now a 201k. If you think the consumer was dead, you haven't seen anything yet in my humble opinion. I will be checking throughout the day.

The lifeboat is quickly running out of flares.

The Next Capitulation

First of all, the guys you will want to watch and listen to are the ones who were right on the way down, because they are probably going to be the guys who will right on the way up. And we will go up someday, if only for the reason that nothing ever goes strait down. Ironic how the people that had the courage and analytical foresight (the shorts)to ride this 3000 point ride from the top are the same folks being penalized for its perceived causation.

There is a great piece in Barrons with Richard Bernstein, chief investment officer at Merrill where he discusses his views on the market. In a nutshell, he says that inflation has never been at 5.5% with the S&P trading at 25 trailing earnings and that the global economy will be much weaker than we think. I agree, he also states that most of the analyst community will come to this consensus at one point soon. Not good for stocks of any color. We all know by now that the analyst community has a run with the pack mentality so the reductions should be fast and furious. We also know how dreadfully inept and pathetic they have been. See my Friday morning post as it validates what I am saying. He makes the logical point that if we haven't reduced estimates yet, the argument that we may only be trading at 13 or 14 times forward eps is meaningless.

Additionally,this bailout does nothing for housing or the rising unemployment rate. I think we will see more bank and hedge fund failures in the coming weeks and bank buyers have all learned how to play the game from Barclay. Wait for max pain and a drill bit share price before you make your move. Bank of America should have followed that line of thinking before they pissed away shareholder money on Merill.

Tomorrow should be a kick, I'm also curious to see what they do with the "no short rule" this week. Will they extend it, modify it, or terminate it? Maybe they will protect General Mills or Johnson and Johnson. Don't laugh.

I'm a bit long with some DDS,SSO,XLE,XME,UYG for bounce purposes only. I'm taking the rising tide approach here but I am leaving the party early.

More Earnings

Not much on the eps docket tomorrow, but before the open we have: NFLX, BDK, CVH, NFLX, ITT, TROW

Tomorrow should be fun!!!!!!!

Earnings For Tomorow

"never under any circumstances take a sleeping pill and a laxative on the same night" --Dave Barry


Before Open--BHI, BIIB, CAT, DD, ERIC, FCX, HAL, JEC, STI, WB

Stocks to watch -txn,axp,sti,wb,xlf,aapl, ma,cof

Futures Right Now- NAZZ -31, DOW-100, SPX -11.60