I found the following story in my emails yesterday. If you purchased $1,000 of shares in Delta Airlines one year ago, you will have  $49.00 today. If you had purchased $1,000 of shares in AIG one year ago, you will have $33.00 left today. If you had purchased $1,000of shares in Lehman Brothers one year ago, you will have $0.00 today. But, if you had purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans for recycling refund, you will have received a  $214.00. Based on  the above, the best current investment plan is to drink heavily and recycle.  It is called the 401-Keg. Now I do not know if the number match up, but the story got me thinking about security of long term asset management and as so often when things get really bad in the market, you have to look back 20 years or so and figure out what went wrong, what is salvageable and what type of security you need as a baby boomer retiring or on the verge of retiring. It will help you put things in perspective and not to panic.

Here we go…The Markets!. We are sitting this one out kids.  Unless you are a Series 9 I’m asking you to not do a thing until we’ve seen the market’s manic highs and lows go away.

“The driving force: As the new giant economies of the world accelerate, competition for the planet's most critical natural resources is intense and mounting.
This competition is impacting oil, uranium, gold, silver, copper, steel, timber and more.
It's pitting the U.S. against Russia, India against China, and China against Japan.
And it's creating a massive, dramatic, sometimes earth-shattering groundswell of demand.

As you already know, we are in the early stages of a currency crisis and a total crisis of confidence.  What do people that maintain their wealth and expand it do, during periods like this?  They take positions in GOLD.  You should always hold some Gold.
A Boom in gold is just getting warmed up.  It could easily rocket to $2,000 an ounce in the next year.

So far, only one major asset class has escaped Mr. Market's correction: bonds. U.S. Treasury bonds have gone up (meaning, yields have gone down) as investors sought the safety of what used to be, and should be, the surest credit on earth. But bonds depend on not only on the ability of the issuer to repay…but also the value of the money in which they are calibrated. And if that money starts to sink in value, bonds take a hit.

The trading Gods have been very generous to us and have given us a $67 per share short.  It time to enjoy the profits and close the trade

More Fannie and Freddie fallout. The Treasury's bailout is labeled a "conservatorship," but it's treated as a bankruptcy in the market for credit protection insurance, or credit default swaps (CDSs). One London banker estimates $200 billion to $500 billion of Fannie/Freddie CDSs are outstanding. That makes the Fannie/Freddie debacle many times larger than the next largest CDS default, which was auto-parts maker Delphi, which had $25 billion of CDSs outstanding in 2005. At a loss rate of 10%, insurers and banks could be on the hook for as much as $50 billion of Fannie/Freddie CDS losses. AIG and Washington Mutual's upcoming shake out come to mind.