November 20th Edition

Good Morning All,

"Once more into the breech, Dear Friends" or so spake Henry V and now Bill upon a different subject. Markets continued their disintegration yesterday and on into Asia and Europe today. There is no single reason for this latest attack, just a reaction to the compilation of the many man made problems that have infested the world's economies. It will be over when it is over and as I have written and spoken many times before...life will once again resume some form of normalcy.

I should mention however that the October intraday low on the Dow of 7882 will be in play today and as Art Cashin says we need more than just a bounce from this level. The equivalent S&P 500 number of importance is 775 which we last saw in 2002 and even worse, or better if you like, David Nichols of the Fractal Report points out that in real U.S. dollar terms the market is actually 30% lower now than it was then.

Oil is threatening to cross 50$ on the downside and now appears to be mirroring our July 15th call for a top of 150$. As so often learned and relearned in booms and busts ; stock and commodity prices will always exceed our greatest or worst expectations by an unknown factor of "N".....for nutty.

In times of war it is not the Generals who face the line of fire but the troops, the NCOs and the Junior officer corps. Similarly in times of economic crises it is not the creators of the debacle who suffer the wrath of the investor but the purveyors of the sometimes faulty product or advice who man the front lines of the investment business. This is a time to be worrying about the money you need, not the money you will be leaving in your estate, that will take care of itself with time. The real victims of the economic meltdown are not those who will continue to live a largely unaffected lifestyle but those middle aged workers or middle managers who have, or are about to, lose their jobs, their savings and their homes.... those with little prospect for renewing their careers when all this temporary nonsense is finally over.

We are now just that much closer to the end of the beginning.

Once more...should you consider this letter to be clutter .....please opt out by advising the undersigned.