??????????????

I do not understand this market action. I consider what has happened in the credit markets to be a complete upheaval. I'm waiting for the casualties to surface. I think that CFC was a casualty. A big one. BAC coming in was not an opportunity but rather the fending off, if not deferral of, disaster.

The market seems to have shrug this off. It's a great buying opportunity. Last year at this time they were touting the same thing. And, it proved to be a buying opportunity. Why should it be any different this time? I think that the difference is that of unknown problem v. known problem. Last year all of the worrying about subprime, economic slowdown, derivatives and the like was merely a recognition of what might happen. All of those worries have now been confirmed. Did the market over-react as some say? I don't think our being down less than 10% as I write to be an over-reaction.

I'm seeing the drum beating of the the "Fed on the market's side". Hasn't the Fed been on the market's side all along? Isn't that why we fell into this mess to begin with because market rates were too low? For the Fed to get on the market's side again means acknowledgment of the Loch Ness monster(s) swimming in the credit market's cold, deep, murky waters. I don't think that the market has priced that monster in the market. Perhaps it is the market waiting with baited breath for the Fed to cut. What happens if they do not cut?

Of course we still have those that are looking for the 4 year low, and we've not hit it yet. Or if we have, it is of a muted magnitude not ever seen before.

If I had to guess--not that I have any special knowledge, but just for the fruitless task of stating an opinion--I guess that the minute that the market hears some bad news it is going to bolt like a skittish colt again. I don't think for a minute that we've seen the worst of this correction. We have only had investor cognition that the problem in the credit markets really is a problem. Further, if the magnitude is bigger than the market's expectations--and frankly, I don't see much quantification of the magnitude--then that skittish colt is going to hit a yellow-jacket's nest.

But, what do I know. I'm mostly positioned neutrally. Mostly cash. I bought some puts on WLT (OCT 25's) an SFD (OCT 30's) because I think that their recent run up was a short squeeze that will reverse.

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Household life has been hectic acclimating this dog. On the one hand, I think that it is going better than I could have expected. On the other hand I'm asking myself, "Why did I do this?". Having two active dogs (my other two dogs were old and pretty inactive) has been harder than I could have imagined. The poodle, Chloe, continues to ride under the radar. I'm hoping that my cats do not become Daisey snacks. She is way to interested in them.