Here is a sampling of email excerpts to clients today and yesterday . . .

Yesterday - March 16

As I try to get through a couple of hundred emails, I decided to forward the clip below to you.   The clip is of Americans . . . and the world, following Obama and the Economic Royalists.  But actually, Obama, Bush, Dodd, Frank, Paulson, Geithner, Cheney and the rest of the Economic Royalists have beautiful resort mansions in the hills off in the distance.  The only reason everyone is jumping into the bottomless pit, is because they were told to jump, and that if they jumped into the hole . . . they would each receive a mortgage modification, three years of no mortgage payments, followed by ten years of half payments, a new car, a plasma TV for every room in their house, a boat, a huge pension for doing nothing and four vacations to exotic resorts every year for the rest of their lives.  Oh, and free health care and the winning lottery numbers too.
 
I also caught a bit of some of the commentators tonight.  They are actually calling this a GREAT buying opportunity . . . again.  I love it.  I just love it. 
 
It saddens me, but I love the fact that we are prepared and we are not following the general public into the hole. 

Tonight - March 17

Not a pretty day for shorts like us.  But it is not totally unexpected or even a surprise.  I don't like it, but that's life.  Sometimes it rains when I want to go fishing.  And sometimes the fish don't bite.  Today it was raining and the fish were not biting.  In fact, we saw garbage like Best Buy defy gravity and rally 9%.  That hurts.  We saw JP Morgan, Centex, KB Homes and Met Life rally 10%.  That really hurts.  But we can't stop stupid people from buying these stocks.  Unfortunately, those stupid people are the guys running the country's pension funds, 401k programs and other fiduciary money.  Smart money is NOT buying.  The money that's in here buying will dry up, and the market will head lower.
 
Now that we have rallied above 770 with a final hour push of 50% of the entire day's gain, we could be in for another painful day or two.  But another day like this one, and we push through 800 on the S&P and will be glaring at the other side of 7500 on the DOW.  We are up 18% from the recent low.  We can't time all the swings.  The best we can hope for is to carve a little piece off of each one.  That's our goal.  So for those of you that are disappointed that we are losing money over the last few days, remember . . . sometimes the fish don't bite AND it rains.
 
In the News - Nothing. Zip.  Nada.  The talking butts are telling people today's rally was attributable to better housing numbers.  Are they kidding?  Today's rally was not even short covering.  Today's rally was dumb money being manipulated, and an effort to boost consumer confidence in the markets.  It will be a hard lesson learned for the average retail client.  There was nothing in the news that even hinted at anything positive.  Well, there was a lot of Happy Talk from the same idiots that told you everything was fine at 14,000, 13,000, 11,000, 10,000, 9,000 and 8,000.  Guys like Jim Cramer who was calling for a 16,000 DOW, 1,600 S&P and $1,600 an ounce gold.  Guys like Suzie Orman (yeah, she is a guy) who two weeks ago told you to continue to average in, then last week told you to sell, and this week he/she is telling you to average in again.  What else was in the news.  Nothing.  Zip. Nada.  Today was a day that we heard nothing meaningful.  I think that alone tells you we are near the end of the rally.
 
Bag-O-Tricks - We did hear a lot of chitter chatter about all of the stuff we've already tried.  And we heard a lot of different opinions on mark-to-market . . . with the consensus telling us NOT to do away with it, because that would be a return to mark-to-myth.  What they don't tell you is . . . we are already marking-to-myth.  Barney Frank is still banging his fist, but some of his dark past is starting to come up stinky.  Let's just say he had a cozy relationship with one of the key execs at Fannie.  And the two of them played Fannie together.  Remember, Barney was the same Congressman that was exposed years ago for hiring a male prostitute.  We heard nothing from Chris Dodd . . . as he has finally realized he is just one step away from a jail cell where he will be playing fannie with Big Bad Freddie the Freak. 
 
So what did we learn today?  Nothing.  Zip. Nada.  Sometimes is rains.  And sometimes the fish don't bite.
 
Tomorrow's Conference Call starts at 9:10, but I am going to have a pep rally about 5 minutes before the call to boost your spirits.
 
For those two risky trades we put on yesterday, BGZ and FXP, I warned you that they were high risk.  Even with today's rally, we are still up about 1% on the FXP position and only down about 5% on the ultra whacky BGZ.  But as I noted for both, these are high risk and come with WARNINGS, bells, whistles, sirens and waivers.  I actually thought we were going to exit both of them today and the market was ready to roll over.  But as I said this morning, we were on the fence. 
 
If you have fire power, you will want to review the portfolio list and move more funds in.  We will be moving more funds in tomorrow.

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Posted by David Good
Director of Operations
Michael C. Morgan P.A.