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Friday, May 21, 2010

Market Decline, the cause?

NOTE: Posted Thursdays post very late, so check for last two posts.

The media chanting the huge decline a few weeks ago was due to a "fat-finger" is outright wrong, as viewed now. First, that decline showed there was not enough buying interest out there to prevent that decline.

I am hoping for a huge market rally Friday, so I can re-enter shorts. If we end the day down huge, I will probably cover shorts. Monday could be all out crash, but really, it isn't worth it to me to "let it ride'.

But by looking at the charts, that decline was the shift, from up to down. We are now in a full market CRASH possibility. Why? Because of what I have been saying since 2008. The losses MUST be recognized for the massive credit/fraud done from 2002-2010. Pretend accounting does not make problems go away. Giving trillions to companies does NOT fix root cause.

Fixing root cause requires.
1) All financial valuations are marked to value
2) All debts are brought onto balance sheets, no "off books accounting".
3) The LAW is enforced for finance across the board.
4) all "risk bets" are placed onto exchanges with risk ratio's enforced to avoid an AIG scenario.

I hope everyone who has been reading this has stop for all longs. If you don't set them now.
This market in my longer term view is bottoming at 50% LOWER or more from here. This decline could stop now, but I am hoping it stops at 925ish.

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