[Villages Kahuna]

I think we've got a lot more on the downside coming. Notwithstanding what the politicians say, they waited too long to pass the "bailout bill". The credit markets have been frozen for several days. Now there is all kinds of evidence of the result. I think I heard 16 states would have to have big layoffs because there are no buyers for their muni- bonds. California had to lay off 20,000 teachers because they won't be able to make payroll. All kinds of public works projects have been stopped. O'Hare and Miami have stopped work on airport expansion projects. Lots and lots of other business problems resulting from no credit, from big companies to small. Car sales were down 1/3 in September and will be a lot worse in October. The U.S. car companies were on tender hooks financially to begin with. No one knows if the fed will nationalize them like the banks if they look like they'll fail.

As all this works its way thru the U.S. economy, there'll be unexpected hits to earnings and further downward pressure on the stock market. It'll be months before the Fed actually buys any of those bad loans. This thing could last for a long while.

Sorry to say that in my opinion this will be a long and deep recession. I'm a long way from being alone in that opinion.