December 11th Edition

Good Morning All,

World markets are mixed going into this morning's opening while oil is recovering and gold is stronger for yet another day. Despite today's spate of economic news having mostly met forecast expectations, futures have trended lower and will likely erase yesterday's modest New York gains in the early going. The indexes however do not always reveal the complete story as it has been interesting to note the recent recovery in some of the underlying sectors, particularly among techs and some commodity based stocks such as fertilizers. This bottoming process appears to be ongoing despite the forever bad news and the seasonal tax loss selling that continues to pervade market sentiment.

One positive sign has begun to emerge in the investment banking area as several successful stock issues have cleared in the past few weeks. The next important step in this area will be the reemergence of mergers and acquisitions, something that will tell us not only how cheap some companies are but it will provide us with a monitor on how healthy the credit markets will have become.

There is in life a large difference between confidence and arrogance, just as there is between wisdom and intelligence. When the former are present the next best attributes of great leadership are experience and good judgement. We are about to find out just how crucial these factors are because for eight long years the world has survived without them. Let us hope that we have now come to the end of the era of hubris and ideological rule before we will have run out of history.