“Everybody understands they’ve got a tiger by the tail here,” said Mark Tenhundfeld, a senior vice president at the American Bankers Association in Washington. “If they don’t let him go gently there will be a lot of mauling going on.”

Don’t be deluded. Banks are in trouble. Big trouble. The Insurers and REITS, and the consumer are too.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYN.RjdIR9Hg&refer=home

“There’s a decrease in acceleration as a falling body reaches terminal velocity…”

The definition of Terminal Velocity according to Wikipedia:

In fluid dynamics an object is moving at its terminal velocity if its speed is constant due to the restraining force exerted by the air, water or other fluid through which it is moving.

A free-falling object achieves its terminal velocity when the downward force of gravity (Fg) equals the upward force of drag (Fd). This causes the net force on the object to be zero, resulting in an acceleration of zero.

So, at this rate the decline in the economy according to our friends at the Fed and CNBS and other media orgs. will reach 0 at some point in the near future.

Wonderful.

The GS earnings and equity offering is over now so the market may resume it’s downward trend. Poor GS bagholders. The stock touched 130 yesterday and closed at $115 down 11% today.

This bear rally was violent and news driven. If you missed it, you may have another chance if we tag 666 on the S&P again.

We are still in a deflationary environment folks, so don’t let the market fool you into thinking these higher prices are the real thing.

Some think we are in a bull market when it comes to precious metals and I will not argue; I think the prudent thing to do now that this silly rally may be losing steam will be to establish positions in precious metals and basic materials for the long haul.

Interest rates are as close as they will ever get to zero, so now is a good time to load up. The Fed will raise rates to attract more bagholders for our debt and then you may see the Mother of all  inflationary scenarios.