Economic Commentary

<strong>Deficits projected to jump sharply (maybe too sharply)</strong>

The budget deficit is projected to jump to $1,752 billion this fiscal year and to stay

above $1 trillion through 2011. However, the figure for this fiscal year includes

$250bn as a ?placeholder? for additional ?financial stabilization efforts.? However,

as the administration notes that there are no plans to ask for more funds, this

figure likely overstates the true expected deficit which would be closer to their

baseline estimate of $1,509bn (versus our expectation of $1,350bn). Our deficit

projection of $1,250bn for fiscal year 2010 is close to the administration?s

estimate of $1,171bn. However, although we see the near-term administration

deficit estimates as pessimistic, we see their forecast beyond 2011 as optimistic.

Under the budget estimates provided, which assume that estimates for the cost of

universal health care are correct, government outlays as a percent of GDP would

grow from the long-term average of 20.7% to 22.6%. This 22.6% average for

2010-2019 represents the highest level of outlays as a percent of GDP since

1985 (the average for the 1980s was 22.2%). The era of big government has

returned. The new limitation on deductions for taxpayers earning over $250,000

could have a significant negative impact on growth and could forestall the

economic recovery which we believe will still be in its early stages when these

taxes take effect. In addition to the consumption effect, limiting deductions would

raise the after-tax costs of buying a home, placing additional pressure on the

housing market.



<strong>Relentless declines in home prices continue</strong>

The Case-Shiller home price index for the 20 largest US cities fell by 2.5% M/M in

December, for the 29th consecutive monthly decline. This was in line with BASML

expectations but slightly worse than consensus estimates. Relative to a year

ago, prices fell by 18.6%, while the three-month annualized change was a

steeper drop at 24.5%. Deflation intensified across all markets, bringing the total

decline to -27.0% relative to the peak in July 2006. Indeed, all 20 markets fell for

the fourth straight month. Markets that have been hardest hit by pervasive subprime

lending also reported the largest monthly and annual declines in

December. The National Association of Realtors reported that 45% of existing

sales over the month were foreclosure related, specifically citing activity in

California, Nevada and Arizona. Such properties, selling at steep discounts,

continue to drive prices lower, as was seen in the sharper declines reported in

Phoenix (-5.1% M/M and -34% Y/Y), Las Vegas (-4.8% M/M and -33% Y/Y) and

San Francisco (-3.8% M/M and -31.2% Y/Y).

National home prices (which are only released quarterly by Case-Shiller) in the

4Q fell by 7.2% versus the 3Q, or -26% at a quarterly annualized rate. This

compares to a lighter 13.3% annualized quarterly drop in 3Q and reflects a

marked acceleration in the pace of decline. Clearly, a broader number of

markets are sharing the pain as the economic downturn weighs on sales and

foreclosure sales grab more of the activity. Relative to the peak in mid-2006,

the national index is now down by 21%. Depressed demand, tight credit, rising

default rates and excess inventories can be expected to continue to lead prices

lower in the quarters ahead. We estimate that an additional 15%-20% in

downside is still in store.
 
<strong>Housing, the quintessential leading indicator</strong>

We?ve said it once and we shall say it again that it all comes down to housing, the

quintessential leading indicator. There is simply no sustainable recovery in the

economy, the stock market or the financial backdrop until we get some clarity on

the outlook for residential real estate prices. Here, the news last week was

unremittingly negative.



<strong>We still have more sellers than buyers</strong>

First, the fact that the Case-Shiller home price index sagged 2.5% in December

was rather telling. Not only was this the 29th consecutive monthly decline, taking

the cumulative decline from the mid-2006 peak to 27%, but this is a critical sign

that we continue to have a total lack of equilibrium in the housing market. In other

words, the ?price? is still telling us that at the latest data point, we still have more

sellers than buyers, which is amazing considering that this is now a three-year old

depression in the housing market, despite the fact that affordability has improved

to its best level ever recorded.



<strong>Demand for residential real estate is basically dead</strong>

Outside of all-cash deals in the foreclosure auction market, demand for residential

real estate is basically dead. As we saw in last week?s data flow, existing home

sales came in at a well-below-expected 4.49 million unit annualized rate, down

5.3% sequentially. Importantly, the unsold inventory overhang rose to 9.6

months? supply from 9.4 in December; and considering that an estimated 15% of

the existing inventories are not included in the data because they are bank-held

subprime properties, the ?real? inventory number is closer to 11.2 months supply.



<strong>New housing market has gone from bad to worse</strong>

The action in the new housing market is most important since this drives

incremental activity in the residential construction sector. On this front, the news

has gone from bad to worse. New home sales plunged 10.2% in January to a new

all-time low of 309,000 annualized units (and the 17.3% M/M plunge in mortgage

applications for purchase thus far in February suggests that we should expect to

see a lower low in home sales when the next round of data are released).
 
<strong>We are not interested in trying to call the bottom</strong>

We are not at all interested, as these legends have been, in trying to call the

bottom. We remain more concerned about having our clients stay out of harm?s

way in what is an increasingly clouded economic, financial and political outlook.

We will all know that the bear market is over when nobody cares ? when fear has

totally overwhelmed long-term resolve. At this stage, the fewer articles we see

teaching investors how cheap the stock market is based on newly revised

valuation metrics, the better it will be for all of us. We have this sense that we are

now just one more sharp downleg away from seeing the true capitulation in

equities ? and the same holds true for bond yields too (we think it?s too early to

turn bearish, but we are looking for signs to take profits in the next sharp downleg

if/when panic starts to set in ? that will be a critical signpost that we have still yet

to see take hold). Let?s just say that as we woke this morning and turned on

CNBC, the topic was ?Have We Reached Bottom Yet??. That is the problem ? at

the true capitulation low, nobody cares. So the answer, sadly enough, must be

?no?.



<strong>Government spending on an irrevocable upward trend</strong>

We feel that President Obama is sending the trend in government spending on an

irrevocable upward trend. So, the current fiscal plan is far different and will lock

the country into more sustainable deficits and debt growth in the future than was

the case in the 1980s. Outside of defense and interest payments, spending

growth barely rose more than 1% annually in real terms during the Reagan era.

So the expenditures, to repeat, were targetted and ultimately were reversed. As

for the years of deregulation, especially in the financial services sector, we

actually believe that households derived substantial benefits from wider choices

and lower costs. The problem was one of oversight, not deregulation ? a lack of

oversight and refusal to contain leverage ratios (as per Fannie and Freddie), but

the reality is that everyone is to blame for this, Republicans and Democrats alike

(and the reality, for those who like to point the finger at the previous

Administration, is that the Dems controlled either the White House or one of the

houses of Congress all but four years since Reagan was first elected in 1980).
 
[quote author="awgee" date=1235709995]<strong>U.S. Treasuries Fall for Third Day on Supply, Spending Concern </strong>

By Susanne Walker and Kim-Mai Cutler

Feb. 26 (Bloomberg) -- Treasuries fell for a third day as the government sold $22 billion of seven-year notes in the last of three auctions this week as it issues an unprecedented amount of debt to spur the U.S. economy.

Declines were led by 10- and 30-year securities. The administration forecasts a budget deficit of $1.75 trillion in the fiscal year ending Sept. 30. That?s 23% higher than a forecast by economists at primary dealer Goldman Sachs Group Inc., and equivalent to about 12 percent of the nation?s gross domestic product.

?The more spending you have to have, the more Treasuries you will have to issue, and that means more pressure on prices,? said Andrew Brenner, co-head of structured products and emerging markets in New York at MF Global Inc.

The two-year yield rose one basis point, or 0.01 percentage point, to 1.09 percent at 2:57 p.m. in New York, according to BGCantor Market Data. It touched 1.11 percent, the highest since Nov. 28. The 0.875 percent security due in February 2011 fell 1/32, or 31 cents per $1,000 face amount, to 99 18/32. The rate climbed from a record low of 0.60 percent on Dec. 17.

The 10-year note?s yield rose five basis points to 2.98 percent. It slid to a record low of 2.04 percent on Dec. 18 and averaged 4.65 percent in the past decade. The 30-year bond yield increased six basis points to 3.65 percent.

U.S. stocks declined, with the Standard & Poor?s 500 Index falling 1.3 percent.

<strong>?It Never Ends?</strong>

Treasuries pared losses after today?s seven-year note sale yielded 2.748 percent, compared with an average forecast of 2.715 in a Bloomberg News survey of seven trading firms. The government last issued seven-year notes in April 1993, when it sold $9.76 billion. The notes at that auction drew a yield of 5.58 percent. The government sold a record $94 billion of notes this week.

The seven-year auction?s so-called bid-to-cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, was 2.11. Indirect bidders, a class of investors that includes foreign central banks, were awarded 38.7 percent of today?s sale. Comparable data is not available from the government.

?The biggest difficulties will be in the next few seven- year auctions,? said William O?Donnell, a U.S. government bond strategist at UBS Securities LLC in Stamford, Connecticut, one of the 16 primary dealers required to bid at Treasury auctions. ?We?re going to get a very hefty slug of supply. As the saying goes, if you miss an auction this week, you?ll get another auction next week. It never ends.?

<strong>Possibility of Default</strong>

The U.S. is borrowing so much that it may have trouble paying the money back, said Jaemin Cheong, a bond trader in Seoul at Industrial Bank of Korea, the nation?s largest lender to small- and mid-sized companies.

?Yields are headed higher,? Cheong said in an interview. ?More issuance will be needed to support the economy. The possibility of default is more and more as time passes.?

President Barack Obama is depending on investors from overseas to help fund his $787 billion economic plan. China is the largest overseas holder of Treasuries, with $696.2 billion, followed by Japan, which has $578.3 billion.

The administration forecast gross domestic product to shrink 1.2 percent in 2009, followed by an expansion of 3.2 percent in 2010. That?s more optimistic than economists? estimates for a 2 percent contraction this year and 1.8 percent growth next year, according to the median forecast in a Bloomberg News survey.

The White House forecast an annual average yield for 10-year Treasury notes of 2.8 percent this year and 4 percent in 2010.

The 10-year note yield will reach 3.08 percent by the fourth quarter of this year, according to the weighted average of 58 economists surveyed by Bloomberg News, and 3.69 percent by the second quarter of 2010, according to the weighted average of 43 economists.

<strong>The Three Elements</strong>

China?s top banking regulator said today the country will pay attention to safety, liquidity and profitability when deciding whether to buy more U.S. debt.

?How much we will invest in U.S. Treasuries will depend on the three elements,? said China Banking Regulatory Commission Chairman Liu Mingkang at a press conference in Beijing.

Losses by U.S. Treasuries are 0.3 percent in February and 3.4 percent so far in 2009, compared with a 1.7 percent gain in the same period a year ago, according to Merrill Lynch & Co.?s U.S. Treasury Master Index.

The yield gap between two- and 10-year notes widened by four basis points to 1.87 percentage points.

<strong>TED Spread</strong>

Money markets show the world?s biggest banks see no recovery before 2010.

The premium banks charge each other for short-term loans, the so-called Libor-OIS spread, rose above 1 percentage point last week for the first time since Jan. 9. Contracts traded in the forward market indicate the gauge, which measures banks? reluctance to lend, will remain higher for the rest of the year than before Sept. 15, when the bankruptcy of Lehman Brothers Holdings Inc. froze credit markets.

The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, rose to 99 basis points from 91 basis points on Feb. 10.</blockquote>


I have been waitin forever for that treasuries bubble to pop. Can't wait to see where that money flows... equities? I think not. Ppl sit in treasuries for safety, if they can't find safety there or in equities, where will they go? hmmmmm GOLD to teh moo000nn!
 
<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aVtf6fH6MNCo&refer=home">Hoocoodanode?</a>



Based on the recent past, the government of the USA will bail out GE. And it will be huge. GE's CDS book is gigantic, and my guess is that it is all poop. Can you say AIG?
 
Chris Laird:



<em>Now that the credit crisis is about one and a half years old, since Aug 07, bank/financial pressures have expanded to a new phase. First causing credit markets to freeze, then threatening bank and business solvency worldwide, the new phase is currency instability.



To give a partial list: The Russian Ruble, UK Pound, Hungarian Forint, Korean Won, Swiss Franc unbelievably, and the Euro are all having serious problems. Other places like Ireland, the Baltic states, the Southern/East European states, Ukraine are on the verge of insurrections. The EU is quite concerned.



At some point, the USD would be threatened as well. What happens is that countries have to do a blanket guarantee to stop a run on their entire banking establishment, and thus assume huge public liabilities that in some cases dwarf the size of their entire economy. For example, Iceland?s banks had made bad loans totaling over 8 times the size of their GDP. Ireland is in a similar predicament, after they did a blanket guarantee. Russia is in a similar situation, having to use their 30% of their foreign reserves to prop up the Ruble.



So, the gigantic losses in the financial markets not only paralyzes credit and is causing massive business shrinkage, but as nations nationalize the losses, their bond markets come under pressure, and thus their currencies too become threatened. This currency phase is already well underway, and is a new and pernicious phase of the credit crisis.



Now, so far, the USD has managed to stay up, even rallying, as everyone still feels it?s a safer currency. Russians, for example are hoarding dollars and withdrawing deposits from Russian banks. This kind of USD hoarding is happening around the world too, where these problems are surfacing.



The USD flight takes various forms. One is into US Treasury bonds, one is to USD cash, and one form can be investing in the US stock/bond markets, and so on.



In many respects, the US has acted as lender of last resort for the entire world. Not just for our own banks. The US does currency swaps for example, when there is huge demand overseas for USD, trading USD for an equal amount in their currency. These swaps have to be renewed periodically, ie rolled over supposedly every 6 to 9 months.



Excepting the currency swaps, which are in the hundreds of billions, the US alone has surged over $10 trillion of direct bailouts or guarantees to the US financial system alone. I estimate the rest of the central banks, the ECB the second biggest, have surged another $10 trillion of financial support to their respective institutions and markets in only a year and a half.



And this process is not stopping either. Now, Germany and the ECB are alarmed by developments in East Europe, the Ukraine, Ireland, and the Baltic states. Their economies have collapsed so rapidly that their governments are either falling, or there are riots, or whatever. They are also rapidly becoming insolvent. Germany, who has steadily resisted big bailouts, is finally publicly stating that they will likely have to do bailouts for other countries that are falling apart.



The money that the Austrian, Swiss and other EU banks have loaned in Eastern Europe is more than they can afford, being tens of percent of their respective GDP.



The UK Pound is also falling drastically, and the Euro is not far behind. The latest losses threatening in East Europe has harmed the Euro already.



If you look at it as a whole, basically the rich nations are being forced to use public money on a totally unprecedented scale to try and prop up the remains of a paralyzed world financial system. The question arises, is there enough money in public bond markets to deal with this crisis, or rather, will the world financial markets just totally implode? That would take the bond markets, stock markets, and currencies down all over the world. If the bond markets are not willing to buy all the new bonds, then the only alternative is printing money.

</em>
 
<strong>Both purchase and refinancing volumes fell</strong>

Mortgage applications tumbled 12.6% in the week ending February 27 with

declines in both refinancing (-15.2%) and purchase activity (-5.6%). This is the

second consecutive weekly decline in refinancing and purchase activity. One

reason for the recent slowdown in mortgage application activity is that mortgage

rates have risen. After rising by 8bps to 5.07% in the prior week, the contract rate

for the 30-year fixed rate mortgage increased another 7bps to 5.14%.



<strong>Home sales were very weak in February</strong>

The purchase index dropped 18% M/M in February, suggesting that home sales

posted a large decline for the month. And, relative to a year ago, the decline in

purchase applications was 35%. While housing affordability remains at record

highs, headwinds of rising unemployment and tight credit conditions will continue

to have an adverse impact on housing demand.
 
<strong>Details of $75bn foreclosure prevention plan unveiled</strong>

The Obama administration unveiled details of its $75bn foreclosure prevention

plan. Take a look at the front page of today?s New York Times for more. People

with mortgages as high as $729,750 could qualify for help and there is no limit on

how high their income can be to get help so long as they are in danger of losing

their homes. Interest rates on loans could go as low as 2%.



<strong>Municipalities looking to merge</strong>

The budget strains at the local level are forcing municipalities to merge services

and departments. Take a look at page A3 of today?s Wall Street Journal,

?Localities Facing Merger Push.? In Pennsylvania, for example, the governor

proposed consolidating the state?s 500+ school districts into as few as 100.



<strong>States turning to slot-machines to fill their budget holes</strong>

Massachusetts is looking to place as many as 9,000 slot machines across the state

to attract state residents who now gamble in Rhode Island and Connecticut. The

state is also looking at privatizing the lottery, which could raise as much as $1bn.



<strong>Americans holding onto their cars for longer</strong>

According to RL Polk and Co., the average American now owns their vehicle for

46 months, the longest ownership period ever reported and the group has been

tracking this data for over a decade. Polk reported that the median age for cars

on the road rising to 9.4 years in 2008 ? an all time high. Back in 99, the median

age was 8.2 years.

RC
 
Yoy, all of you, may want to ask yourself, "Who is the Federal Reserve accountable to?



<a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aG0_2ZIA96TI&refer=home">transparent Fed ... NOT</a>
 
<a href="http://www.bloomberg.com/apps/news?pid=20601109&sid=aaCZXj5ScUlo&refer=home">More good CDS news</a>
 
<strong>States turning to slot-machines to fill their budget holes</strong>

Massachusetts is looking to place as many as 9,000 slot machines across the state

to attract state residents who now gamble in Rhode Island and Connecticut. The

state is also looking at privatizing the lottery, which could raise as much as $1bn.



If massachusetts does this, won't they be hurting Rhode Island and Conneticut?

Still a national problem....or a world problem.
 
<strong>Labor market deteriorating rapidly</strong>

The ADP national employment report showed 697k jobs were lost in February,

the worst performance so far in this recession indicating that economic conditions

are still deteriorating more than a year into the downturn. Moreover, the prior

month was revised down by 92k to -614k. We do not expect to see any let-up in

monthly job losses until mid-year at which point the unemployment rate will be

just under 10%. This week?s report showed widespread job losses with

manufacturing down 219k, construction off 114k (one million jobs lost, and

counting, in this sector since the peak in 2007) and the private service sector

shedding 359k.

Challenger job layoff announcements rose 159% from year-ago levels to 186K in

February, signaling an ongoing deterioration in the labor markets. While the pace

of layoffs slowed versus January, the level is more than double from a year ago.

Job cuts in the auto sector led over the month accounting for one-third of the

February total. This area will continue to be a drag in the months ahead given the

near term need to restructure and downsize. Layoffs continued to mount in a

broader number of industries while announcements from industrial, retail and

finance companies were among the largest. Looking ahead, the economic

downturn will continue to lead to higher layoffs with corresponding gains in the

unemployment rate through all of 2009.



<strong>Housing affordability at a record high</strong>

The National Association of Realtors released its housing affordability ratio for

January and it surged for the sixth consecutive month to 166.8 in January from

153.2 in December. Yet over this sixth period of rising affordability we saw new

homes go from 505K units annualized in July, to 448K, to 434K, to 404K, to 380K,

to 344K, and all the way down to a record low of 309K units in January. This jump

in affordability also came in a month that saw homebuilder sentiment crater to a

record low and mortgage applications for purchase run nearly -30% YoY.

Affordability is not the issue. The issues are first, a weakening in the demand for

housing. At the margin, folks would rather rent than own an ever depreciating

asset class. Second, down payment requirements are between 20-30% and there

are few who have $70-80,000 lying around to put down on a house. And finally,

banks are continuing to tighten their credit standards for residential mortgages as

the latest Fed Senior Loan Officer Survey attests.
 
The National Association of Realtors released its housing affordability ratio



Affordability is not the issue. The issues are first, a weakening in the demand for

housing. At the margin, folks would rather rent than own an ever depreciating

asset class.
 
<strong>We cannot rule out the loss of 1 million jobs in March</strong>

Judging by the leading indicators ? 600,000+ jobless claims, Challenger layoffs

up an eye-popping 158% from a year ago, the 78,000 plunge in temporary

employment, the record-low workweek ? suggest that we will have to endure an

800,000 employment slide when the March data roll out, and a 1 million loss

cannot be ruled out. We may have to redefine yet again what a ?new normal? is at

that point. The bottom line is that a recovery in domestic economic activity is, at

best, a late-2009 story, but at this stage, even that could be a fairy tale.



<strong>Layer after layer of distress in the labor market</strong>

Although we are trying hard to be as objective as possible as sentiment turns

increasingly negative, we have to say that we still do not see the proverbial light

at the end of the tunnel. Not just yet. The data still do not give us the ?green light?

to turn bullish even as we now look for every opportunity to do so. As we peel the

onion today, we see layer after layer of distress in the labor market ? data that will

likely not make it in the soundbite-driven morning papers.



<strong>Number of full-time jobs sagging sharply</strong>

For example, the number of full-time jobs sagged 940,000 in February after more

than 1 million lost in both December and January ? 3.5 million full-time jobs lost in

just three months and 6.7 million since the recession began in late 2007. In a

normal recession, we tend to see around 2.5 million full-time employment losses

and currently we are nearly triple that and counting. These are jobs with benefits

and because of their permanency, they have a tremendous impact on the

household budget.
 
[quote author="freedomCM" date=1236392102]The National Association of Realtors released its housing affordability ratio



Affordability is not the issue. The issues are first, a weakening in the demand for

housing. At the margin, folks would rather rent than own an ever depreciating

asset class.</blockquote>


Ummm-m-m, I do not think there is anyone who reads these forums who believes anything the NAR says.
 
<em>"The problem isn't falling asset prices, it's not rising foreclosures, it's too much debt."</em>



<a href="http://www.nakedcapitalism.com/2009/03/guest-post-more-debt-wont-rescue-great.html">Someone finally gets it.</a>
 
<strong>When does sentiment get washed out once and for all?</strong>

One last item to consider is how elongated bear markets like the one we are in

typically end. We went back to the five major bear markets of the past five

decades and found that the bottom happens after the market breaks below what

was universally perceived to have been the fundamental low for the cycle. It is at

this stage that sentiment gets washed out once and for all.

For example, in the last cycle, the September 21st, 2001 low of 965 was widely

viewed back then as having been the fundamental low. When that low was

broken on July 2nd, 2002, the S&P 500 sliced all the way down to 776 by October

9th like a hot knife through butter. Go back to the early 1980s ? the 112 mark on

September 25th, 1981 was supposed to hold; and when it was shattered on

February 22nd, 1982 so was any hope that the bear market was ever going to

end, and the ultimate low was turned in on August 12th of that year at 102. In the

mid-70s cycle, much the same pattern emerged. The market seemed to have

bottomed at 90 on April 25th, 1974 but it was pierced to the downside on June

18th. Then we had the capitulation sell-off all the way down to 62.3 and that was

on October 3rd, 1974.
 
<strong>Data wrap-up ? brace yourself:</strong>

???? US Manpower hiring intentions index sagged to -1 in 2Q from +10 in 1Q and

+15 in 2Q ? the first time ever in negative terrain in 28 years. Suggests we

could soon see a 1 million payroll plunge in one of the next three months.

Those intending to hire fell to 15% from 16% in 1Q. This follows on the heels

of the Conference Board?s employment trends survey, which fell 3 points in

January to 91 to stand -21.7% against the year-ago level ? the steepest 12-

month decline ever.



???? Canadian housing starts sagged 12.3% in February on a MoM basis to a

puny 134,000 annual unit pace ? an 8-year low (consensus was 145,000).

Bloomberg reports today that credit card delinquencies are becoming an

albatross around the Canadian banks? neck. Overseas, we see that Iceland

just closed its fourth bank, Hungary is pledging heavy intervention to

backstop the faltering Forint, and Latvia is now trying to renegotiate the terms

of its IMF assistance package.



???? Chinese deflation ? the PPI declined 0.7% MoM in February and this took the

YoY trend to -4.5% from -3.3% in January ? this is the steepest YoY falloff

since March/99. And the CPI came in FLAT sequentially but -1.6% YoY in

February (was +1.0% in Jan) ? the first move into deflation since

December/02.
 
<strong>Economy looks like a bottomless pit at this point</strong>

If history is a guide, the market will bottom before the economy does ? but as far

as the economy goes, it only looks like a bottomless pit at this point: The JOLTS

data show that the number of job openings has fallen below 3 million ? this didn?t

happen in the 2001-02 recession, but then again, this is a much more severe and

broadly based downturn, bordering on an outright depression. Job openings

have been reduced for three months running and have absolutely collapsed at a

40% annual rate over that time frame. New hirings also sank 7.5% MoM in

January. Firings, meanwhile, rose 2.2% in January and have soared at ? get this

? a 90% annual rate over the past three months. We shall see how long equities

can rally and Treasuries sell off if these trends persist.
<fieldset class="gc-fieldset">
<legend> Attached files </legend> <a href="http://www.talkirvine.com/converted_files/images/forum_attachments/274_w0m1P3D8W0B7J9r12p7S.jpg"><img src="http://www.talkirvine.com/converted_files/images/forum_attachments/274_w0m1P3D8W0B7J9r12p7S.jpg" class="gc-images" title="SP32-20090311-090606.jpg" style="max-width:300px" /></a> </fieldset>
 
So, you think it was the lack of goverment regulation that caused the current mess?



<a href="http://www.ft.com/cms/s/0/a1c18156-0ddc-11de-8ea3-0000779fd2ac.html">I am from the government and am here to help.</a>
 
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