CRITICAL LEVELS

We had a nice bounce at the end of the trading day yesterday just to get back to flat. The futures this morning are looking flat and I have heard several pundits claiming that we bounced off of the bottom and are headed up from here. We might do just that, but we are ultimately headed lower. This economic stimulus plan is going to make the system more inefficient and going back to what Gerald Celente said---We have no new productive capacity.

I think gold will pull back over the short term, but is destined to hit $1250 by this summer. Some panic will push the TBT down and could be a buying opportunity. People have asked why I am bearish on the treasuries if I am bearish on the equities. Their thought process is obviously if I believe in Dow 6000 and S&P 600 then there will be a flight to quality which should be bullish for treasuries. I think the so called flight to quality will be short-lived and what we are ultimately looking at could well be a FLIGHT FROM TREASURIES as our credit weakens. This stimulus plan solves NOTHING. It makes the problem worse. This so-called stimulus is filled with spending programs that will be continued. So instead of a one time expense designed to stimulate the economy, we have a bill that is destined to lead to more and more government debt. If you beleive that we are headed for deflation over the next 2+ years, please leave a comment below as I would respectfully like to hear your thoughts. I beleive in the exchange of ideas and know there are a lot of deflationers out there, but I can't see it.

I still believe that we are headed for a retail mess that will lead to many bankruptcies in the retail sector and ultimately problems (massive ones) in the commerical real estate sector. I went to a restaurant for lunch on Wednesday and this time last year would have waited at least 15 minutes for a table at noon. THEY HAD SECTIONS THAT WE CLOSED. EMPTY TABLE AFTER EMPTY TABLE. A meal that would have taken well over an hour last hear was had in about 30 minutes. That is happening all over the country and will show up in earnings reports for the first quarter. We are headed down and this pork bill that will pass today HELPS NOTHING. It took us 80 years to put a TRILLION dollars on the feds balance sheet and we are going to do it with one bill. We are going to borrow as a country 6 times more than we have ever borrowed in any one year.

Stay tuned as we will have some great shows and more details on the economy this weekend.