... and for an a-b-c corrective movement on the stock indices.

On the CONgressional point, go to the petition page at http://financialpetition.org/ and sign again please. Yes, this is different. It is a plea for the CONgress to quit dorking around and actually force all the bad debts in the banking system out where we (the people) can see 'em.

Why?

Because if we don't, we're going to be facing a catastrophe.

We're in a recession now folks.

NBER will call it a year from now. I'm calling it right now.

Why?

Profits. Period.

Hello!

That, and ramping debt defaults.

The market is starting to "get it", which is why we had a huge selloff. This is not done and those who listen to Cramer and Kudlow, trying to "bottom fish" here, are going to be looking at blackened - as in "burnt up", not "made lots of money" - 401k and IRA statements in the coming months.

Recessions are not to be feared. They are in fact good things, in that they clean out the bad businesses and cause them to go under, which is exactly what needs to happen from time to time. This is true despite the wishes of some that we would never have a recession - an impossible and outrageous expectation, but there you have it.

Government, of course, can make it worse. A lot worse. And left alone that is exactly what they will do by trying to buy votes with promises of "bread and circuses", all of which, by the way are empty promises.

Why?

First, the $1,000 or so they're claiming will be distributed will do nothing, for it will not hit anyone's bank for months and when it does, people will likely pay down debt rather than spend it - which means "no stimulus effect."

Second, the changes that Democrats want to make to Fannie and Freddie limits are unsafe (so says OFHEO, the regulator of these organizations) and could very easily cause the cost of mortgage money in the "conforming space" to ramp precipitously - especially if these GSEs start to run into trouble in the marketplace (and they're likely to.)

Further, we are right now seeing credit contraction. That's deflation folks. Its even starting to show up on "mainstream" media sites - for example:

"Other credit available to consumers has been shrinking sharply, according to an analysis by Ms. Zentner. The pool of unused credit — predominantly home equity lines of borrowing, bank loans and credit cards — was still growing at nearly 15 percent annually as recently as the fall of 2006. Now, with debt mounting, home prices falling and job growth slowing, that pool is diminishing at an 8 percent annual rate."

Ding ding ding ding ding.

Folks, credit is money and money is credit. Yes, I know they're different. But they are what is called "fungible" in the world of finance - that is, interchangeable for purposes of trade.

Credit is, in fact, virtually all of the monetary supply! Very little is actual money.

Oh, that "throw darts at the WSJ's Stock Page to pick shorts" moment? It may be approaching - see this:

"The U.S. Securities and Exchange Commission is updating rules for how mutual funds value holdings after they struggled to price mortgage-backed investments during the subprime-lending crisis.

Regulators are reacting to an explosion in derivatives and mortgage-backed bonds that don't always trade on exchanges, said Douglas Scheidt, an associate director in the SEC's investment management division. The guidelines, to be proposed this quarter, will set out steps to value assets when trading prices aren't available, he said."

That could easily do it all on its own.....

Here's your technical!