The Mike Gasior Blog

It is 7:30 p.m. on Thursday, February 25th as I write this.  And here is the headline I just saw break out of Japan (where it is already tomorrow morning):

Feb. 26 (Bloomberg) — Japan’s consumer prices fell for a 12th month in January, putting renewed pressure on policy makers to eradicate deflation that hampers the recovery.

I took plenty of grief over my newsletter last month, which was glowingly titled “The Doomsday Scenario”, but I would hope that MANY of you would vouch for the fact that I have been making allusions for YEARS that we are hurtling down the exact same road Japan has been traveling for 20 years already.

I’ll give you a Cliff Notes version of things that should strike you as familiar:

–Stock market bubble bursts

–Real estate bubble bursts next

–Consumers go into a spending funk as their jobs and financial futures suddenly become worrisome

–In an effort to stimulate the economy and help troubled banks, the central bank drops their lending rate to 0% and prints tremendous amounts of currency to hopefully spark some inflation

–When the consumers do not respond, the government begins issuing massive amounts of debt to finance public works/stimulus projects

–Ultimately the government has issued so much debt that the total amount is larger than the country’s GDP.  Rating agencies rate the country’s sovereign debt as “junk”

–The lending rate from the central bank stays at effectively 0% for a decade yet there is rampant deflation and a landscape filled with zombie banks

Lots of you will think I’m painting a futuristic picture of America’s trajectory, yet all I’ve done is tell Japan’s history from 1990 until an hour ago.  So if a lot of the bullet items seem familiar, there’s a damn good reason why.  And I can promise you one thing that Ben Bernanke, Alan Greenspan, Paul Volker, Tim Geithner, Larry Summers and I might actually agree on:

Deflation = Death Spiral

So I can most certainly promise you that I’m not wishing for a deflationary cycle in this country at all.  I’m simply dreading one.  And when all the talking head stooges on television are agreeing that the only possible future for our economy is an inflationary one, you can almost be completely assured that they are wrong.

And my work on insurance company annual statements is going well enough that a global media outlet wants to work with me to actually break the story.  The dollar amounts involved might even merit using the word “Scandal”.

I have to admit that I’m smugly pleased at what I think is a clever title for this post.  The subject matter is somewhat arcane and did a decent job hinting toward what’s to come.  First let me say that I am hard at work writing my February newsletter and I expect it to be sent out to subscribers on Monday.  It was that writing, which took me into this diversion.

To set up the situation here, I was commissioned for a consulting project with a large insurance company last year (I’ve done many such engagements over the years) and part of my work was a review of the financials of many of their direct competitors.  While it is not something I feel particular pride about, it is true that I am among the world’s leading authorities on what an insurance company’s statutory (what they file with insurance regulators) and GAAP (what they report to everyone else) financial statements are supposed to look like.  Many of you who read my blog and newsletter know too well that as an insurance company, one of the most horrifying things you can do if you’re an insurance company is hand me your annual statement along with a red pen, highlighter and Post-It Notes.  Because it is likely that I will be handing back your worst nightmare come true with regard to the errors (and worse) I have found.  I’m not sure where I became “Rain Man” for this kind of thing, but it’s a peculiar skill set that has helped many of my consulting clients avoid intense scrutiny and trouble from regulators, auditors or investors.

In my somewhat cursory review of my client’s competitor statements I was very surprised at the sheer volume of errors, misrepresentations, miscategorizations and a general aggressiveness in more of these annual reports than I would have ever expected.  Mind you, I was not AT ALL looking through these financials in any effort to “grade” them but I found it very striking nonetheless.  Here is where the story becomes interesting….

A couple of the companies where I found fairly substantial problems were “friends” of mine (I have a very mafia-like definition of the term “friend”, meaning that if you’ve paid me enough money over the years I don’t abandon you when you need my help) so I reached out to some senior people at these organizations.  I wanted to give them a little bit of a heads up prior to their 2010 statements reaching the point of critical mass where changes cannot be made in any practical way were I to find anything “material”.  Admittedly, I wasn’t going to do a thorough, line-by-line type of review just for the fun of it, so I suppose I was indeed angling for them to hire me to help them fix these problems.  Much to my surprise I was largely ignored and not one of these “friends” even inquired deeply enough to make me think they were concerned in even a minor way.

Thinking that I still might be on to something with my discoveries I dropped personal letters (not emails…letters) to the CFO’s of my non-friend companies to make them aware of who I am and of the issues I’d discovered in their financials.  Once more I was met with silence.

Over the years I have made many, many, assertions, accusations and worse about mispricings, misrepresentations, misstatements, and borderline illegal activities within the financial markets and among large institutional investors.  Never have I actually called a specific institution in on the carpet for a public disemboweling, but that all changes right after March 15th.

The large investment and commercial banks are fortunate thanks to the fact that they are not required to report ALL their investments in a public format, where they list each and every position they hold along with the price paid, current market value and ratings.  Insurance companies are not so lucky.  On March 15th of every year they are required to file a statutory annual statement with the insurance commissioner of every state in which they conduct business as well as the NAIC (the National Association of Insurance Commissioners).  Within this statement is a listing for every single investment they hold: real estate, mortgage, limited partnership, bond, mortgage or asset backed security, stock, short term and derivative.  They must also calculate their Risk Based Capital position, which gives regulators a sense for how risky of an enterprise each company is based on their product line and investment portfolio.  On top of that, life insurance companies are also required to set aside reserves to protect policy holders from the company making poor investment decisions.  These are publicly available documents and in the near future I will be walking you through the pages of some of them to show some of the most egregious behaviors I have found.  I will be making you aware of the senior management people whose signatures endorsed the statements in the front of the book along with any auditors, rating agencies or others I feel should have identified the errors prior to filing the statements with government agencies.  I may also move on to pension funds.

So that’s my fair warning.

I really don’t intend this to be mean spirited, but if you’re a U.S. insurance company and have taken an aggressive approach in how you report your investment holdings in an effort to mislead people and put the economy at peril, you can expect to have your financials dissected in an extremely public way.  I’m also currently discussing sharing ALL my detailed work with two internationally respected media outlets that have expressed an interest in covering this story.

I’m going to start with a very large life insurance company, but plan to identify companies of all business lines and sizes so no one feels left out. 

My most recent newsletter has caused a flood of emails on a host of different issues.  The most obvious controversial topics were my suggestion that deflation is still a serious prospect for the U.S., my suggestion that the Dow Jones Industrials might someday soon begin with the number 4 and finally the prospect that the Federal Reserve may be responsible for the massive rally in the U.S. stock market.

I recieved the below email a couple of days ago and the person who wrote me managed to weave all three issues into their concise note:

Mike-
 
I’m a financial planner in (State name removed).  I really enjoy your blogs, although I feel my mind always wanting to “not want to believe it” which fits right into the prevailing mood of the marketplace as you describe it.  I’m not a trained economist, but I shudder to think of what would happen to the equity markets if a Glenn Beck got wind that the Fed was artificially inflating the stock market with its printed up monopoly money.  There is already a huge distrust and uncertainty among everyday Americans.  If there was a “run” on Wall Street similar to the “run” on banks during the Great Depression, I can’t imagine the fallout.  I’m presuming that is the premise of your Dow four-handle, but for us simpletons out here in the sticks it might be good to have you expand on how you think that could play out.  Just out of curiosity, have you heard from anyone in the political sphere since posting the blog?  Also, I’m curious about why the 10-yr. treasury was one of your possible recommendations; won’t that get killed in a higher-rate, inflationary environment.  My feeble understanding is that we are going to be like a group of people locked in a room where one person has a candy bar and the other nine have $1 each, and then the Fed is going to drop in several $100 bills and the things that have any intrinsic value are going to appreciate.  Ok, lousy example, but the idea is that the money supply / velocity of money will pick up in the next decade- to me it’s the only feasible possibility with the American mindset (both politicians and beneficiaries) will go along with.  Your feedback is greatly appreciated.
  
Thanks again,
 
(Name removed)

Let me me give some concise and perhaps inelegant explanations for my feelings that inflation is not as big a worry to me as it seems to be for everyone else and why I think the Dow is going to the 4,000’s.

First, the Dow prediction is not at all scientific.  I have argued for many years now that we have been traveling down an extremely familiar road to me since I have watched the Japanese for the previous 20 years and I know how this story ends.

Here are some facts for you to quickly consider:

–The Nikkei 225 Index reached 38,957 on December 29, 1989

–The Nikkei 225 Index reached 7,603 on April 28, 2003

–The was a total of an 80.5% decline from top to bottom and it took 4 years to acheive.

–As of this morning, the Nikkei stands at 10,092, which is 74% below its peak over 20 years ago.

Now make this application to the U.S. markets:

–The Dow Jones Industrials peaked on October 11, 2007 at 14,279.

–80.5% of 14,279 is 11,494 points.

–If the U.S. were to suffer the identical drop as Japan (which is statistically improbable) the Dow would stand at 2,785.

–If the timing of this drop was identical to Japan’s (41 months), this drop in the Dow would occur by March of 2011.

Now of course I am not predicting the Dow is going below 3,000 in the next 13 months, but I am simply making the case that Americans should stop the arrogance that causes them to dismiss the possibility it COULD happen.  Japan is not some Banana Republic/Third World country, but is still the 2nd largest industrial economy in the world…and it happened to them.  With all that we have endured during the past two years are we really so foolish to think it couldn’t happen to us too?  Gosh, I hope not.

So my “prediction” of a Dow Jones in the 4,000’s is actually giving myself a lot of room for error actually.

The prediction of possible deflation is also tied to the correlation to Japan.  For the past 20 years Japan has been issuing MASSIVE amounts of government debt and their short term interest rates near zero.  And do you know what happened?

Severe deflation.  Deflation that has even been accelerating in recent quarters.

I’ll finish by pointing out something all of you should already know. 

Whenever EVERYONE is in agreement that something is absolutely going to happen (I think you’ll notice an almost universal consensus among investors and economists about inevitable inflation) than you can almost be guaranteed that it’s never going to happen.

“Life is what happens when you’re busy making plans.” – John Lennon

As all of you probably have noticed, the U.S. stock market has jumped up this morning on what appear to be a couple of positive stories.  Oddly, both stories didn’t strike me as particularly wonderful, but we are all aware of the fact that the stock market needs no true reason to do anything.  In this case however, I ask you to consider some simple and quick points.

One story that seemed positive was Caterpillar stock receiving an upgrade with Morgan Stanley raised its rating on the industrial sector to “attractive” from “in-line”.  While this was certainly a nice thing to hear if you are an investor in Caterpillar, it immediately struck me odd.  I fully admit that I do not follow Caterpillar whatsoever and know literally nothing about their balance sheet.  However, I do know that the company relies heavily upon exports and as the dollar strengthens it will become increasingly difficult for Caterpillar to keep their pricing competitive around the globe and maintain profit margins.  But this story didn’t honestly bother me very much.

The story I found VERY troubling was the reports that there might be something in the works to bail out Greece.  Not that I have any problem bailing out Greece or anyone (unless it were to somehow involve U.S. tax payers, but that would be the final straw for many, many Americans) but it was the below quotation I got from a news story that bugged me:

“Rumors are swirling that (the European Union) is going to cause the Greek debt holders to take a haircut on some of their prices and shore up Greece,” said Jeffrey Saut, Raymond James Financial chief investment strategist in St. Petersburg, Florida.

You may notice there was no mention of Greece getting its fiscal house in order.  The bailout will effectively be the poor investors who were foolish enough to lend the country money who will be asked to take the hickey and eat their losses.

The reason I titled this post “Our New Perverse and Inconsistent World” is simply because it is starting to appear as if the whole world is off its rocker at this point.  Consider the events of the past 24 months and notice how there is no disernable pattern that can be counted on.

–Bear Stearns is bailed out in a deal brokered by the Treasury and Federal Reserve (with the Federal Reserve financing 95% of the purchase price at effectively 0%) and Lehman Brothers is let go.

–General Motors and Chrysler senior creditors are thrown under the bus with even the unions being moved ahead of them in line and suffering staggering losses (and the president of the United States calling them out in a live press conference, referring to them as “greedy speculators”) while AIG creditors, who include the world’s largest financial institutions get 100 cents on the dollar paid by U.S. taxpayers.

–Every politician in Washington D.C. has spoken that the economic disaster was caused by too much debt and that we need reform while at the same time planning to increase the government’s debt by double over a ten year period.

–And now Greece, Spain, Portugal and whomever else you’d like to name…who have managed their finances badly and put their countries at peril will somehow be magically saved if the investors who lent them all money get screwed and are forced to accept losses.  How lovely.

So I’ll leave it there.  I can only wonder when someone…homeowners, corporations, municipalities, sovereign governments or anyone is going to FINALLY have to live with the consequences of their actions.  Or will there always be a bailout for them with the people who enabled them stuck holding the bag at the end?  Stay tuned.

I’m sorry I couldn’t make the title of this blog post more descriptive, but I’ve received multiple emails about my theory that it might have been the Federal Reserve using their Open Market Trading Operation to drive up U.S. equities from March of 2009 through January of 2010.

To save me going over the information I laid out in my January newsletter, please visit this link to refresh your memory:

http://afs-seminars.com/newsletter_Jan_2010.html

Here is the Cliff Notes version of my research of the time period between March 9th, 2009 and January 7th, 2010 (which is the time period of all the increase in the U.S. stock market):

–80% of all the market gains occurred on just 30 Mondays.
–70% of all Mondays during that time period were “up” days.
–Most recently, in the 18 Mondays immediately prior to January 7th, 16 were “up” days, or 89%.
–Literally almost ALL of the gains actually occurred during the overnight futures trading sessions and no gains occurred during daytime U.S. trading hours.

My general contention is that it is quite odd from a market and statistical point of view that this would occur and I speculated as to any entity that might have the ability to cause this, and there was only one possible culprit: The Federal Reserve.

The questions that I’ve been receiving via email since my January newsletter went out allege that perhaps I conveniently left out what occured on the Fridays that proceeded the Mondays.  The thesis is that maybe traders were simply closing out their positions on Friday (meaning they would sell out and move to cash prior to the weekend) and perhaps the markets were generally down on Fridays and that would cause the phenomenon I uncovered on those Mondays.

But consider this:

–There were 40 Fridays during this time period.

–Of those the market was up 23 of those Fridays and down on 17.

–Overall the market increased several hundred net points during those 40 Fridays.

–So basically 57.5% of the Fridays were up days and 42.5% were down days.

These findings can only lead to the conclusion that the statistics relating to the following Mondays is that the Monday action is unrelated to any Friday sell-offs.

On an administrative note, I recently found out that when we updated the blog software that we disabled all you users who had registered and used to participate (much to my enjoyment) by commenting on the blog.  PLEASE drop me a note and I will send you your new user name and password if it wasn’t sent to you automatically.

mike@afs-seminars.com

I love reading your comments more than I like reading my own.

This is what I heard throughout the market declines of yesterday, as many blamed the slide on the worries that perhaps Greece, Portugal or Spain may be at risk of default.  The parade of pundits on television tried their best to assess the situation and how important, or unimportant, a credit crisis in one of these countries would actually be to the global economy.  As I listened I was at first amazed at how dismissive many of these talking heads were of the situation.  The comments were fairly striking:

“It’s only Greece.”

“The Greek economy is about the same size as Mississippi.”

“Portugal represents only about 6% of the Euro zone.”

“It’s really unlikely we’ll actually see any defaults from these countries.”

These sorts of comments continued throughout the day and slowly but surely I began to think that I had watched this movie before.  As Yogi Berra would say, it was “deja vu all over again”.

Maybe you remember some of the commentary about the looming subprime crisis from about two years ago and how unimportant it would be to the overall economy:

“The subprime market represents an extremely small component of the mortgage market.”

“The likelihood of a substantial decline in real estate prices is very small.”

“Lehman Brothers is just one company.”

“There is little chance that foreclosures will increase in the prime mortgage markets.  The subprime situation is contained.”

I wrote an entire newsletter a couple of years ago titled “And The Band Played On”, referencing the Titantic and my attempted association was how so many people at the time were dismissing ominous economic warning signs about an oncoming crisis.  I think Greece, Portugal and Spain will all prove to be pretty important.  When California begins to teter on the verge of default, I think that will be important too.

My argument is that they’re doing it again.  Dismissing important signs that there may very well be serious trouble brewing in the global economy.  No less of a moron than Jim Cramer was on the Today Show this morning claiming that this whole situation is no big deal and that everything will be fine so we should be plowing our money into the stock market with both hands.  I (and common sense) would argue that this might be a moment in history that might be better watched with your money on the sidelines.

Sort of in the same vein, I had a wonderful email from a faculty member from Emory University the other day in response to my recent newsletter.  It displayed an elegantly efficient use of words:

“i don’t need mail from nutcases.”

You also have to appreciate the text message feel of the email also.  But nonetheless, although I’ve developed a fairly thick skin by now, I still felt compelled to inquire about the harshness of the “nutcase” comment, so I replied back to ask.

Wow, XYZ.

Nutcases??  Somewhat harsh, no?  And spoken by someone obviously associated with the wonderful business school at Emory University.  One might have thought you would have considered my somewhat carefully laid out case for the three possible outcomes.

Nonetheless, this nutcase will see to it personally that you’re removed.

Best of luck on the feedback you receive on your published works.

Cheers!

Mike Gasior

As I expected, I received a response that I found somewhat more disconcerting than the original 6 word email:

hey mike, sorry you are offended.  the “nutcase” comment was a result of my googling your name and reading about your views and activities, and not solely based on the specific message you sent me that espouses fringe political views.  surely you understand that thinking people won’t necessarily agree with you about the source of the problem or the best solution.  i could perhaps have been more circumspect.

still, i do appreciate being removed from your list.

thanks

At least the lack of capitalization remained consistent, but I was taken aback at the comment about my “fringe political veiws” and how “thinking people” won’t necessarily agree with me.  It made me wonder if this is the sort of attitude that had infected Washington D.C. in recent years.  This disconnect between an agenda they believe in and the undeniable numbers that clearly show the agenda will be fiscal suicide.  Truthfully, I have seldom espoused any political views whatsoever and I have made my general disdain for politicians of all ilk extremely clear for many years. 

So even with this professor’s clear dislike of me I pushed on with one more email to see if they could explain what the “thinking people” were thinking:

Well, since you’ve now engaged me XYZ, and I will assume you consider yourself amongst the “thinking people” you reference, I would be very curious to hear where you think the source of the problem is and what the solution  might be.

My degree in economics and Masters in Finance are now nearly 30 years old and I have spent my entire adult lifetime working in the finance industry, but I never claim to have a monopoly on ideas.  And quite frankly, I’m pretty sure I didn’t make a single political comment in the newsletter that began this dialogue between us.

If you suspect me of being a fringe political “nutcase”, I encourage you to read my newsletter of September 2008, which predated President Obama’s election by several months.  It will quickly show I’ve been fairly dissatisfied with the workings of our elected officials for quite a long time in matters regarding the direction of the economy.

Here’s the link to it if you’d like:

http://afs-seminars.com/newsletter_Sep_2008.html

You are correct that I do have plenty of opinions, but I also try to bring my facts with me to explain my view and don’t just resort to abrupt name calling.

I’d love to hear what the “thinking people” thing will right our economic trajectory and the reasons that make you think these ideas have more merit.

Thanks again for writing.  Always good to hear from my friends at Emory.

Cheers!

Mike Gasior

Silence.  Fade to black…..

It did.

I spent an excessive amount of time last evening pouring over the new Obama budget to the point that it became obvious to me that I could really use some sort of hobby.

My opinions about the economy and markets going forward are pretty well known if you’ve read anything I have written during the past 5 years.  I believe we’re on a very familiar path if you have any knowledge of the travails of the Japanese economy going back the previous 20 years.  Our economic future over next 10 years was going to be challenging enough and it is my concern that any growth at all will be extremely difficult to achieve with the enormous debt burden that’s still being carried by consumers and corporations, and now the staggering amount being taken on by local, state and federal governments.  Paying interest on that debt as well as making principle payments does nothing to benefit the current moment in time nor help build for the future.  It simply pays for the past and equates to a dead body we’ll be dragging behind us for the foreseeable future.  The past is dead and tomorrow has yet to be born.

But if you consider some of the tax proposals in Obama’s budget it makes it almost impossible to imagine any investment being made by the people and companies who might actually have any money to invest.  I know some of the comments I am going to make in this blog might anger some of my readers because it will seem as though I’m advocating giving the rich and corporations a break  at the expense of the “working class”.  But this comment by Senator Grassley yesterday summarizes a point I would have made in this post if he hadn’t:

“The proposed budget’s $300 billion in tax relief over the next 10 years for individuals, families, and businesses is mostly targeted and limited, often to people who don’t have to pay any taxes,” said Senator Charles Grassley of Iowa, the ranking Republican on the tax-writing Senate Finance Committee.

This sort of tactic is the typical bait and switch that politicians pull on the public: pass legislation that appears to benefit the “working class” which accomplishes almost nothing and taxes the group that actually has money to spend and invest.  With all the discussion of “stimulus”, this budget and the tax proposals will the biggest killer of growth for the past 100 years and maybe longer.  Let’s take a simple look at just some of the proposed increases:

–Overall, a $970 billion tax increase over the next decade on Americans earning more than $200,000 and an additional $400 billion on corporations.

–Proposes to eliminate preferences for oil and gas companies, life-insurance products, executives of investment partnerships and U.S.-based companies that operate overseas.

–The top two individual brackets to revert to 36 percent and 39.6 percent, from 33 percent and 35 percent currently.

–Capital-gains and dividend tax rates would increase to 20 percent for people earning more than $250,000.

–The budget assumes the federal estate tax, which expired January 1st and was replaced with a capital-gains tax, will be reinstated retroactively with a 45 percent rate applied when married couples’ estates exceed $7 million. If Congress doesn’t act, the estate tax in 2011 will be reinstated to a 55 percent rate applied to estates valued at more than $1 million.

Truthfully, I could go on and on about this budget, but I will spare you this sort of torture and save it for myself.

My simple summary problem with this budget is that it contains literally NO reductions in discretionary spending at all (at least nothing meaningful or material) and the White House themselves project a budget deficit this year of $1.6 trillion and another  $1.27 trillion deficit in 2011.  And as always, the projections that estimate those deficits are the typical rosey scenarios politicians love to use.

Understand one thing…the people and companies who will NOT have $1.3 trillion available to spend or invest anymore will NOT be spending it.  Period.  Paragraph.

The politicians will defend the budget with talk about proposals that will create jobs and provide economic stimulus.  My problem is that in capitalistic societies there are corporations and successful individuals.  Not the government.  And please remind yourself that all the numbers I mention above do NOT include any sort of health care mandates that may be passed or the “cap and trade” tax on energy, which might involve trillions more dollars.

This is a very sad moment in my adult life because I have seldom felt so helpless to watch a train wreck happening right in front of me with the ability to do literally nothing about it.  No matter how loudly this budget gets debated in Washington, we all know too well that the Congress will pass something that looks damn close to what Obama just proposed and the president will sign it.  Worst of all is that the momentum of the current move in the economy is massive and becomes more difficult to slow down or reverse every day.

And for those of you who think this blog is simply yet another example of Mike defending the “rich” and throwing the “working class” under the bus, I will share a wisdom I got from my paternal grandfather (who also gave me a first hand account of the depression throughout my ENTIRE childhood).  Grandpa Gasior made it through the 8th grade and held a series of “working class” jobs until his passing. 

There was a VERY wealthy man who lived only 1/4 mile from our neighborhood (His father had started a construction company that would ultimately construct nuclear power plants.  He used to land his helicopter in his back yard and had a horse farm on my street with horses he’d fly around the world to competitions.  Pretty heady stuff to a kid like me who could only dream of flying on an airplane someday).  For reasons I don’t even remember, I made some sort of snotty comment about this guy in front of my grandfather and some derogatory comment about “rich people”.  I’ll end this blog post with EXACT words Grandpa Gasior said to me about 40 years ago:

“Mikey.  No poor man has never given me a job.”

My plan for 2010 is to be revive the monthly issuance of my newsletter and I’m officially off to a rolling start.

Although a somewhat depressing title for what is my “Happy New Year” edition, I wanted to express my concern over the macro direction of the economy by titling it:

“The Doomsday Scenario”

If you are on my mailing list to receive the newsletter, it is being sent out as I write this blog post.  It’s only 9:00 a.m. and I already have a lovely response from a gentleman in the Netherlands with a succinct summary of my message of “Man what a load of sh**”.  Always nice to hear from my fans in Europe.

Nonetheless, if you are not on my mailing list, you can view it on the website at the below link and if you’d like to be added to my subscribers simply email me your address at mike@afs-seminars.com

http://www.afs-seminars.com/newsletter_Jan_2010.html

Also, I will be a guest once again on “The Naked Short Club” out of London tonight at 4:00 p.m. New York Time and you can tune in via the Internet at this link:

http://resonancefm.com/

As usual, the guests are all members of the hedge fund industry and tonight’s topics will range from what’s been going on in Davos, new regulations on banks, the outlook for the global markets and the economies and Lord knows what else might come up.  It’s always a bright and lively group and I truly enjoy my appearances on the show.

And finally, although the market appears to be prepared for a bit of bounce this morning, I think we are preparing (FINALLY!!) for the move downward and I wouldn’t be surprised if this is a substantial move lower.