GREETINGS FROM DAVOS!

Greetings from Davos. Just kidding! WE’RE NOT IN DAVOS!  We couldn’t even get invited to the Bronx! Not

that there is anything wrong with the Bronx. But we are in beautiful Orlando, Florida where it feels like Davos

with a low of 30° today. That freakin global warming!

As we write this, another major gap to the downside as Asia smoked again…leading to Europe doing the same. Maybe today will be the big washout!

We do not have much to add except to say despite massively stretched, extended and oversold conditions to the downside, bounces are lasting one day or less.  This tells you just how weak markets really are.

We expect a good number of people to start joining in on our thesis that this is not just a correction in a bull market but a bear market of consequence. In the weeks to come, the market will continue to make it more apparent. We  remain very worried that this will not be a garden-variety bear market but one of major consequence as central banks again have bubbled up asset prices to levels they should never have gotten to…and enabled leverage/debt/margin to hit all time records. (No one learns!)

The market action continues to remind us of 72/73, 99/00 and 07/08. Throw in a dash of 73/74 and you can understand why we are very worried. (We hope this is not the case!) You are now going to read reports of global slowdowns as well as recessionary numbers as the markets again flushed out trouble before the masses.

We also expect rumblings of “no more rate hikes,” rumblings of “we may need to go back to 0%” and rumblings of negative rates as well as the need for QE4. We are not kidding! We are in hopes this does not occur as it is the central bank interference that created the distortions that create the eventual downdrafts.