It seems to me that the single biggest question looming is the outcome of reflation of our insolvent institutions. Inflation? Deflation? I saw a news crawler on CNBC that said that Allan Greenspan endorses what the Treasury has done. BFD. Greenspan's endorsement of anything should immediately call it into question.
There's a delicious irony that so many of our self-professed free market folks who rail against the seemingly putative tax system that takes from the wealthy and gives to the the lazy are happy to take (even demand) a government handout when their bacon is sizzling on the griddle.
I'm in the camp of deflation first, then real reflation then real inflation. I just don't see how the central bankers can reflate anything right now until prices come down. Once the 'excess'---those asset prices that are brought down through de-leveraging--is out of the system, then the central bankers can act in some meaningful way. I've always been of the mind that the credit crisis was too big for the CB's to have any meaningful tools in which intervene.
In fact, as I write this, such a scenario makes a lot of sense (though you are welcome to call me on it). There are many who went to hard assets (precious metals, oil) thinking hyperinflation. I think that was too soon.
I see that oil output is being cut. Where are all of the "demand driven fundamentalists" who were incessantly (if not manically) making their case that we were running out of oil and the world as we know it was ending? That global demand was so voracious that we'd be burning our homes for fuel. Sigh. I had a few flashbacks from "Road Warriors"--the apocalyptic film about a world that has run out of fuel except for those stockpiles that are in the cross hairs of those with a real need for fuel!
In the end, I'm convinced that that the world had a diet too rich in debt and now it is being transformed into a giant gut grenade (as my son would put it) that once cleared from the world's financial system ensures that most of us will be wiping shit off our collective faces. And though we may wipe it off of our faces, the stench of it all will likely be around. I just don't see the switch for the exaust fan. I shudder to think that there is something in my eye!
I hope that you are weathering this nonsense in the markets well. To me, this is the lesson of a lifetime--and my tuition has not been too steep.
Here's a pic of FINVIZ performance for various Sectors. You'll have to click on the image to read it.