Is it still a point and shoot?

YES

Tough call on this market running all the way down to our YTD lows but we did strongly point out on April 13th post, "can't wait for those provisions for commercial loans" on the banks books to come out. Well BAC did not let us down.

The market is becoming like,

http://www.youtube.com/watch?v=Pd-MpXCMcIs

Now we might get a few people calling themselves investors trying to bottom fish today's market down turn so let them have the first half hour of trade tomorrow, then if you don't have any shorts, load up, still more meat on this dogs bone. Also a lot of the recent up turn as we mentioned a few weeks ago is shorts covering, well I think today might get them back as the gun is being reloaded.

Remember unemployment going to 10pct in the USA is our main back drop, you work out the unemployment rate you work out the economy, housing, spending and even China, you get the picture. Don't bother listening to the text book guys that say unemployment is a lagging indicator, its only lagging when it stops going up, well its still going up, so for me its the only forward indicator we have that is relevant, but don't worry those PhD quants only have a small weighting in their factor models for unemployment as they see it as lagging the would rather use consumer confidence, well we don't have any consumers so I don't know how that survey is even populated.

Obama can do what he wants and Benny the bull Benankie can do what he wants but as long as I think a house that I can afford to buy might be cheaper next week then I am not buying it. If unemployment keeps going up then houses and property or any big ticket item for that matter has to keep going down. Stop unemployment and even harder stop the feeling that you MIGHT be unemployed and houses than might be bought. Until then, property keeps going down, and remember GM still has not officially gone bankrupt if you think 10pct is not doable.

On CNBC they talk about the cut on the arm but not the knife wedged in the neck. We need to free up credit they say, banks need to lend, so lets keep these rates low, look at all the money the fed throwing at it and so on. Well who is borrowing to buy a house that is still falling in price that's the issue. Give me 4pct interest rates or give me zero percent, if I believe the thing I am buying is 200K today but will be 190K tomorrow then the interest rate is irrelevant I ain't buying, its a term Econonomist call Velocity. Money supply times velocity = action, they say, velocity is the need a consumer feels to spend in other words, the higher it is the more likely we are to get that new fed pumped money and give it to someone else for and IPOD. Well money supply is going up but velocity is moving like a snail on a dark night, in a desert, with an eye firmly shut, trying to crawl up a rock with a massive head wind and its tail tied to a car driving in the opposite direction. Oh and I forgot to mention the rock has moss on it.

JAPAN

A friend of mine in America has a 20K debt on his credit card, I did not even know you could get such a limit or even understand why you need one that big, as a restaurant bill is a couple hundred and an IPOD is a couple hundred and I can fly back to OZ for a grand so why do I need 20K limit, to buy a car? Anyway she has decided to not pay the debt back. Now I didn't even know that you could decide such a thing, in my ignorance I have discovered that you don't even get jail, you only get a line on a credit report that says your not a good borrower. So if you do not live in America and therefore may not understand the general psyche of my American friends then maybe I just helped you.

Giddy UP