"OUR WEALTH LOOKS GREAT ON PAPER"

Bull market ended between 1999 and mid 2000. We have had a correction that began in 2000 and ended late 2002 (OCT) 2003 (MArch) a 3 yr long Bear MArket, SECULAR in nature...so ended phase ONE.

To correct the dispair and VIX spikes of the Bear, PHASE ONE gets interupted by a CYCLICAL Bull Market, of which most bears didnt see coming....IMHO by its time and action is LONG in the tooth.

20 years PLUS long by some accords (1974 vs 1982 beginning) last bull was a RECORD in many ways.....TOP PE ratio etc.

Phase 2 of the bear mkt I think has begun, and this beleive it or not will be the painful part...yet NOT the end, that will be Phase 3.

Several reasons lead me to believe this.

Historic norms for the last 3 bear market bottoms.

Lack of 90% down days.

RECORD bullishness of bulls plurality over 140 weeks straight, only 9 weeks of bears on top even during worst bear in decades. I mentioned last bear had 40 plus weeks of bears on top 50% plus.

And what has replaced last economic driver of which was paper profits? MORE paper profits? and DIRT profits....MORE of the SAME asset inflation!! NOT INVESTMENT FROM SAVINGS.

How could THIS, consumer driven economy be sustainable?

DEBT LEVELS NEVER before seen.

SPX/VIX ratio's never before seen.

Bullishness never before seen.

Money growth never before seen.

$9 trillion derivitive market no one understands.

Greatest investor of all time? Buffet SOROS....making one of the worst bets of all time on dollar weakness at LOWS out $100's of mil probably close to $500 million.

5 years straight of record housing market and price appreciation.

Weakest recovery in history in relation to jobs and wage growth....even though we had record stimulus and tax cuts and lowest rates in 45 years held there for over 12 months.

Baltic Dry Index (RR stubbornly never mentions) crashing below BULL SUPPORT LINES.

NO YIELD WITHOUT RISK for saver wannabe's.

Losing our manufacturing base without anything tangable except military might to take its place as yet.

We are the rishest nation, yet we are SO POOR!

WHat do I worry about? HOW the historic bear market bottom valuations and measure get met.

Our wealth looks GREAT on paper, that's what worries me........ cycles dominant nature, winter is coming, I hope it is short. GET DEFENSIVE and IN CASH IMHO and maybe we can catch golds bottom under $400 IMHO

Duratek