'Markets, on average, decline twice as fast as they rose....'

Go figure. The NYSE says that they can handle a two billion share day. Hmmm, I wonder what happened today? The funny thing is, some option plays were locked up due to this. Actually, that isn't so funny. What's the old expression? Caveat emptor.

Those guys and their games can't be any worse than the old AMAX.

Hey,didn't those guys join up with .............. huuuuuummmmmmm.

In reality, the price moves so fast on S&P index options that a person can lose upwards of 80% in a couple of hours.

Still when euro, yen, and dollar have left one another bloody in the streets the gold based Russian ruble will rule!

In case you're wondering where the 'NASduck' comes from, just think about the shoot out at the O.K. Corral between the Clanton's and the Erp's. :- ) )

From this perspective it will be seen that Clinton will not only not be impeached but will still be the shill leader of US in 2007. The mkts will not tank unless POG goes down with it, and it really doesn't matter if the bug is fixed or not because too many plans have been laid down dependent on infrastructure failures as the excuse for martial law.

I admit this is far out and difficult to accept but if you let it roll through your head for awhile and start looking at what is unfolding before your eyes from this perspective more and more of these crazytimes, rattlesnake mkts etc. become more and more transparent.

show a gold accumulation very very quickly and far exceeding what could

be explained by mining efforts. A prediction: By one year from now Russias gold backed ruble coin will be the envy of the world and will emerge the clear and ruling winner of the currency wars to come.

NEVER LISTEN TO ENVY FOR INVESTMENT ADVICE

Russia looks to gold to help rouble

( Business Report, Jhb. )

MOSCOW- The Russian government said it

probably would not export any gold next year,

allowing the central bank to stockpile the metal,

boost reserves and raise confidence

in the rouble, which has plunged 60 percent in

two months.

You must be working for government. Big Brother watching for my well being.... trying to protect me … Give it a break I can make my own conclusions!

http://www.fiendbear.com/marketre.htm

Fiend Commentary

================

Trap Door

A reader passed along a New York Times question and answer interview with

James Grant and sense it was what I had planned to write, I thought I

would present the bulk of it here laced with my own comments.

That Market Bottom Might Be a Trap Door

Q. Many people seem to think the stock market has seen its lows. You

don't agree?

A. If this were the bottom, it would be the most remarkable one

in history, one where the Standard & Poor's 500 index is trading at 25 times earnings. That is a valuation rarely achieved at the top of a market.

I think that this is a bear market rally. I would suppose that if the market gods were designing a bear market rally, they would make it look as irresistible as possible and would want as many participants as possible before opening the trap door.

The trailing P/E ratio for the S&P 500 is actually over 27 and with flat ( or worse ) earnings, I guess that the Bulls are looking for for the P/E

ratio to move into the 30s. I think that Grant hit the nail on the head.

There has been so many excesses in the past decade, it is not surprising

to see the market do its best to slaughter the Bulls and drag them along

until sentiment is finally broken.

Q. Now that the Fed has cut interest rates twice in a matter of

weeks, fears of a credit crunch and recession have diminished. Is

that an appropriate reaction?

A. The credit crisis may sound melodramatic, but over the last several months there has been a very severe bear market in credit of all kinds. And it should be seen in the context of the preceding bull market in credit, where it was freely, if not almost promiscuously,available.

There is no recession we know of right now, and yet we have had a credit crisis in this country, which in the postwar period is a rare if not unique occurrence. It makes you wonder what will happen to this institution of borrowing and lending if there is an actual deflation,or an actual recession.

If you look back at prior recessions and depressions, one common theme

is that we are always past the worst of it. Several months ago, no one

considered the possibility of a recession. Now some perceive that it is

possible but not likely given the Fed's recent rescue efforts. As the

economic situation continues to deteriorate, I'm starting to see a few

articles stating that even if there is a recession that it won't be severe.

As Grant was hinting at, there will come a point where the Fed's magical

rate cuts will not be able to stop a recession any more than they did for

the Japanese economy which is still floundering after seven years.

Q. But isn't it the Fed's job to take steps to prevent a credit

crunch?

A. It has been the suppression of cycles that paradoxically has

created a lot of the volatility we have seen in the credit markets.

By succeeding in perpetuating the expansion, the Fed has failed in the sense that it has changed the behavior of people with money.

By saving Mexico a couple of years ago, the authorities changed

the way people view sovereign credit risk. Hence the surprise when

the Russian government defaulted. A visitor from Mars would not have been surprised that a country without money could not pay its

bills. But many were surprised, because they had come to expect that the integrity of the system will be defended.

By suppressing the volatility of the credit and business cycle,

by trying to head off price inflations and deflations, the Fed has

thrown a boomerang in the air, which is the risk tolerance of people who invest money.

The Fed ought to be in the business of central banking, not

central planning. Alan Greenspan ought to say that people who risk

money stand to lose a lot of it. That is in the nature of cycles and markets.

Once the dust has settled and the U.S. market and economy are sufficiently thrashed, I have a strong feeling that the duties of the Federal Reserve will be extensively revised at the least.

Archives...

The Real Story Behind the Fed Ease

By Paul Lam

Senior Markets Writer

Contrary to what most would like to believe, the Federal Reserve's abrupt decision to cut interest rates on Oct.15 was not so much due to concerns over a slowing economy or credit crunch. The action, which came 16 days after the first 0.25% rate cut, was outside the normal context of a Federal Open Market Committee meeting, which does not convene again until Nov. 17. It was a response to an immediate meltdown threat of the banking system.

According to informed sources, the Fed had been injecting liquidity into major banks even before the Oct. 15 ease. Federal Reserve repo tenders, which are repurchases of Treasury securities held by banks in return for short-term cash, a common way to add liquidity to the banking system, rose by 35% during the two weeks prior to the surprise rate-cut.

The Oct. 15 ease, on top of the recent surge in liquidity available to banks, reportedly came after urgent requests from the president of the Federal Reserve Bank of San Francisco, who told Federal Reserve chairman Alan Greenspan of extraordinary demands by one member bank in its region.

Reliable sources indicate that this demand for repo funds had been provoked by a credit squeeze in the interbank market against Bank of America ( BAC:NYSE ) . Bankers believe that the bank's troubles are far more serious than what is being told to the public. Bank of America made a $357 million loss write-off due to its participation in the troubled hedge fund D.E. Shaw, and bought $20 billion in outstanding securities and derivatives contracts from that hedge fund in order to prevent its demise. The grave danger on Oct. 15 was of a breakdown in the interbank payments system, which could have easily led to a global systemic collapse.

While investors around the world rejoice the Fed's action by outrageously bidding up stock prices, the more alarming message is that the emerging markets crisis has now fully reached the G7 financial systems.