Category 5 Financial STorm

Fed says, "we're raising rates because this Katrina thing, just a passing bother, so what an entire city was wasted, million people displaced, will cost $200B + to rebuild.....hardly a scratch..." "American economy is strongest in the world" and I ask how so when we borrow to do anything and have a decimated manufacturing sector, so much so that Service Sector jobs are the economy and GDP is 75% Consumer Spending!

Now with historical neg .6% savings rate last report, with debt at historical levels never seen before, mutual fund cash near 3.7% another low (around 12% at normal BOTTOMS) and housing which IS the job grower the engine of economy been SPENT ouT!!!! topped out where to now? Look at shape of the BIG 3 Auto's GM saddled with $300B in debt and only $30 B in cash!

Higher energy managed to sink Consumer Sentiment to one of its lowest ever readings, remember our economy IS Consumer Spending, this winter heating bills could rise by 30% !!!!!

Now we have any even BIGGER storm heading RIGHT for the heart of our Texas refining industry, where 25% of all our refined products are made, and if you haven't prayed yet, for the people, for the platforms, for the refineries, I suggest you do so now, unless something changes and it might a direct hit is forcasted.

I just heard they build them to withstand Cat 3 storms...... 25% of our refinery capacity. WE GOT OIL, oil being bid up by speculators, is all it is IMHO we see the bottleneck is what they do with the oil to make gas etc that really matters, it has been DECADES since a new one has been built in the US, decades....environmental issues.

Now forget our fearless leaders not 20 not 10 not 5 or anytime could see straight to not just SAY we needed to get off the oil heroine, by RASING no damnit mandating higher fuel efficiency!!! NOT CLINTON and definately not good oil buddy BUSH, none of our Congressman could muster up enough fortitude to pass a bill that could have protected us from this outcome to some extent.

No, I remember the Bush tax cut, let you write off $50K plus vehicles, of which the expensive SUV'S fit right into that for businesses. GOOD IDEA!

Fuel Cells are a joke and panecea, it presently would take more energy and create more pollution to produce the hydrogen than just to burn the fossil fuel to begin with.

And GM, makers of the HUMMER gave one to their shareholders....Detroit decided to make the SUV a family tradition like apple pie....and they will pay.......while Toyota eats their lunch!

Now, the worst doesn't happen, a relief rally could appear, and maybe deserved, because do we really know why the market is weak?

Maybe its the Storm, but it was weak before that, where has it gone for the last year and a half? GOLD is flying yet consumption is DOWN and we have over capacity in manufacturing, except energy. Gold shares however lag badly the 18 yr highs in the metal as does Silver,so very odd indeed.

We know the demand for debt is HUGE, now add Katrina, yet....10 yr yields are still very low near 4.17% falling today. The money market has outperformed the stock market the last year and a half!

And while you take your risks, you get a paltry near record low 1.9% or so DIV YIELD on the SPX near 2.2% on Dow, bull market BOTTOMS are shown by HIGH yields near 6% and PE ratios near single digits.

Something is wrong, when history has not repeated yet Wall Street tells us SUPER BULL is here....some kind of bull is here.It PAYS to KNOW your history.

Sure, we will rebuild, but there was even a revolt if sorts today as Conservative Republicans held a press conference to decry THIS administartions fiscal irresponsability and they said ENOUGH IS ENOUGH. BUSH'S own party is demanding BUDGET cuts, and there goes the chance of MORE BUSH stimulus.

And we are running out of those options. And the debt heaped up so high there is no end, must be REPAID my friends, to those who LOANED us the money to have our drunken spending buffet, and some of these Republicans understand that and dont want the whole bill coming due to their children or grandchildren.

As it stands now, money is no object, and the 2 charts I showed earlier is the end result of that, over $1 Trillion fiat paper scraps injust last year alone.

TO me the growth in money supply defies any logic. The G-MAN has a few months to go, he wants to get out of town with is reputation, but somehow I feel history will none too kind to the world's greatest inflationist!

Its all coming together, and maybe it takes a Cat 5 Storm to make people understand, that you get nothing for nothing and something always comes at a price, and the good people of this country have been SOLD OUT by the wise guys and they don't even know it.

The slumbering Bear Market has been waiting, and there is a very good chance hibernation is over

Duratek