Time to wake up and smell the Deflation?

No gas in the Tank, or did you throw that egg in?

Bear market is gone right? http://www.elliottwave.com
The Elliott Wave Theorist -- October 15, 2004 (just one Q and A I can share from new EWT)

An Interview by Chris Oliver, Money Editor, The South China Post
Q: Can the Federal Reserve prevent deflation?
A: No. We have a huge bond market of $30 trillion, which is debt already created. If bond investors
came to believe that the Fed would begin printing money and throwing it around, what would they do?
They would sell every bond they've got, which would lead to a decrease in the supply of credit because
bond prices would fall and interest rates would rise. So there aren't any alternatives to deflation.
Q: What will be the outcome of deflation?
A: The ultimate result is going to be a worldwide depression. There were deep depressions in the 1790s,
the 1840s and the 1930s, and I think the next one is already underway. It started in 2001. We have had one
or two every century, and we are headed into one now.

**Take the housing bubble. See FNM run, but it can't hide!

Unlike the stock market very liquid, the housing market is anything but! I think the real estate market is already SLOWING, what will start as a trickle with a leveling off of price appreciation can turn into a torrent, a cascading , an imploding of the prices.

COMMERCIAL loans are DOA< look at ANY chart.

8 months into supposed BIG year for stocks, the HOOAHH Presidential cycle....and what do we have folks? Declining tops in DOW which topped in FEB. and a historic Transportation non confirm.

But surely folks see this, and other things and are turning bearish?

HA! you kid yourself, self....bullish readings (Investors Intelligence etc) have been climbing as the dow has been declining! 2000-2002 a distant memory. Letter writers are almost unanamous in their bullishness....jumping out of their skin bullish, all the while oil is near $55.

To me, it's frightening, what is going on and more so the lah lah attitude.

Most have stuck to tried and true LTBH and allocation...as if that plan has no risks.

Hardly a PEEP about what has been going on with the money supply!!?? It has been stalling/declining for almost 3 months now!! Especially the unusually large $40 billion DECLINE of last week! This kind of money action fortells a weakening economy which should lead to possible dramatically lower prices....even if it takes 2005 to show it...a supposed LOCK for a good year.

WHat has propelled the fabulous profit recovery is the financials, was the housing BOOM.....this is looking more and more as a non factor going forward.

Next qtr GDP could realy suck the air out of market should it be as weak as I think it is going be.

Caveat Emptor....as I see MOST still worrying about missing something(most bears I know turned bullsih) than about protecting what they got.

Duratek