FEAR, by VFRTXN 7-31-08

Fear, it slowly grows, the earnings numbers in coming quarters will lay the foundation for a lasting prolonged tough slow down. Most of us already know and feel the reality of this storm. It churned slowly off the coast of denial during the summer of last and now with a blast we go into this fall and winter of discontent with our emotional sails unfurled, the winds of change howling, screaming at us now as we head straight into what was once a distant no mans land which lies beyond the breakers of a once sunny beach we bathed upon not so long ago.

A place where we lived on tomorrows dime and thought we would never have to pay up, the drinks kept coming, the bartender said never mind those clouds in the distance, spend what you have and spend what you don't have, just spend, rack up huge amounts of debt it's OK. Your Uncle Sam leads by example and racks up huge debt so it must be OK. Go ahead and buy houses you can not afford and when the sh.. hits the fan so what, go ahead many were told it's OK you can afford it on this beach, it's just one big party where pay up time never comes and the drinks are always free and the sun always shines, Uncle Sam will bail everything and everyone out when the time comes and the bubble of BS pops. Will we crash upon the rocks and take to the water in many different directions as we strive to make ends meet in this new age of doing more with less, with doing without more than ever before or will many more just go bankrupt.

This fear like all fear feeds itself. The ole saying there is nothing to fear but fear itself is now quite loud in this the theaters of our country's mindset. The mindset of fear, the emotions of it all are just now beginning to set in with the markets. We are at a happy plateau of fear, yet as with most human behavior we are about to become more unbalanced where fear goes to far and becomes the rage. Call it momentum, call it a fire that flames up in a crowded dark room filled with people just wanting out. That is what the market will become as it comes closer to setting it's bottom in place. The burning room with flames is the market, those who flee it's heat, the sellers, those who buy the fear, the fire man, the storm raging on the high seas, is the volatility, the beach is where we sailed from and headed back to except this time when we hit the beach again that being the bottom in the markets it will be a much different place then of course.

Fear makes us do many things as does it's evil and opposite twin greed, both are the super stars of markets that make them dance their dance. This dance floor, the floor the market seeks is nowhere in site, no where close with so many clouds of uncertainty. Some this week have boldly claimed they know more weakness is coming, yet others still deny even a recession is alive and growing deeper and wider.

One thing is for sure, there be fear in the winds that be blowing now. The FEAR is alive and real and it's got it fingers flicking the volatility meter switch as the nerves of the markets twitch more each day with wild mood swings. This is a pure sign of a very very sick market mindset. Unbalanced with no normal discipline whatsoever.

FEAR does that, it fades the discipline to darkness as the market stage has one lonely voice, the cry of fear, and the storms come.

Be prepared always, the pincers jaws are close at bay.

V.