So it seems I was right about a pull back this week. Man was yesterday harsh. After that I was not surprised at all by the rally we saw today. This range bound trading accompanied by high volatility is what I anticipate over the next 6 to 9 months. While we may set new lows over this period, I think it depends on how rough the recession gets over the coming quarters. I feel the market has priced in something pretty serious, but only time will tell whether the drop has been sufficiently large. As far as the recovery, I really can't see it happening until we get some good news (or no bad news for a while from financials). A string of earnings that surprise on the upside, or a series of better than expected economic data are the kind of catalysts I am looking for. Not sure exactly what is causing the unprecedented levels of volatility, but it seems to be here to stay as well.

Moving on, I saw an excellent video on YouTube last night. It is a speech Elizabeth Warren gave at Berkeley about the death of the American middle class. I found a lot of the information she presented somewhat surprising, but she has clearly done her homework, so I don't have any reason to doubt her. It is nearly an hour, but in my opinion time well spent (you can skip the first 6 minutes). There is also a story on Naked Capitalism quoting her talking about the lack of method surrounding application of TARP funds. She is the head of the TARP oversight committee and doesn't have good things to say about Paulson's methodologies.

Finally, another interesting piece on major university endowments selling private equity stakes at huge discounts. Apparently private equity has different accounting rules which has allowed them to not mark down the value of their holdings by as much as they should.

0 comments