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To: Dale Baker who wrote (58149)	1/22/2008 11:42:52 PM
From: Keith Feral	Read Replies (1) \| Respond to of 118717

The big problem with rotational corrections is that they take the financials down, the the techs, the oils, materials, growth stocks, and everyone else. At the end of a 20% correction, people are willing to believe anything they hear. That's about the time you need to be buying the stocks that dragged us down, not the one that held us up. I thought the analyst from Bear was kind of funny when he said his TA guy called for a $130 bottom to apple no matter what their eps were. Meanwhile, he has a $250 price target. Maybe next year! If people are looking for value, I think the financials are a better place than retailers. Both sectors showed good strenth today. However, people have to pay the interest on their credit cards and mortgages before they can go shopping again. Same with their car payments. Ironic that the worst sectors are starting to look pretty good long term. So will the techs after another day of selling - I hope. I'm sitting with good cash reserves and now the yields are falling apart, the banks are kicking off 8% yields. C dropped there yield to 5%, but that isn't too bad in the grand scheme of things. KO has a yield of 2.7% with a 25 PE. C will have better EPS growth than any hamburger company this year after the weak EPS environment. Same with MCD, but the substitution effect doesn't end. I'll buy 5 double cheeseburgs from the $1 menu rather than buy a $7 value meal. 3 - 12 packs of Ko at the store only costs $9, so I can go home with 36 cokes and 5 double cheeseburgs for the same price as 2 value meals. The intense depression at the end of a wipeout would normally set up for a good rally, However, at the end of each wipeout, there seems to be a good reason why things will never come back. Last time it was global terrorism, now it's global subprime. YIKES! I love what Ben Stein pointed out on CNBC tonight, $100 billion worth of subprime and CDO writedowns have destroyed $3 tillion worth of equity value. It makes you wonder. I don't trust the shorts feeding us all the bs anymore than I trust the analysts that thought the losses would be contained to the 3rd quarter. Still, I think there is a big enough institution to come in an make the mortgage insurers whole again. Meanwhile, all the shorts keep mocking the FED's direction towards neutral monetary policy as a negative for the economy. In the real world, which the FED and the shorts can't seem to keep in perspective, lower interest rates stimulate the economy. I'll go along with the 50 basis point discount to 3.00% and a few smaller cuts to 2.50% to restore liquidity. After that, I would rather see the FED head towards a long term strategy by overshooting rates and creating another vicious cycle of monetary micromanagement. The FED needs to adopt a medium term policy that secures mortgage payments on the median price of mortgage costs around $1000 per month. They need to change their policy outlook to mortgage stability which controls the balance of the economy and forget about gas prices. Maybe they forgot about the Internet which allows people to work from home. IMO, 2.50% FED funds will keep the national average price of a home around $1000 per month. We can't keep dragging down the people in the midwest every time housing bubble get too intense in NY or LA, Why kill the core of the country by coastal population growth? The intellectualism of the FED is a problem because they don't see the real impact of their policy. They perceive the capital formation of the capital markets to be a sign of excess rather than a security blanket when things to bad. I figured that out a month after graduation from my pristene liberal arts college and had to get a job with no talents.