SKF

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The chart above of SKF (inverse financials) is nearing the top of its range. One would not normally buy this chart "up here", but the individual charts of the financial stocks are not improving. Their decline has no velocity, which means that fear never spikes, fireworks don't go off, and we never hit a bottom. Charts of Citi (C) and Goldman Sachs (GS) just carve out new lows on a daily basis, with no end in sight. GS deserves its fate, as does Citi. But thousands of other well run companies are being pulled down with the ship. Not fair.

Our guess, from a look at thousands of charts, is that the market will break its lows and head dramatically lower. The descending triangle on the indexes puts the odds in favor of further decline. Whether it's on this iteration, or after another rally or two, no one knows. One thing is for certain, people are giving up (or have already given up) on the scam that is Wall Street.

The cat is out of the bag... stocks are worth 14 cents per share, give or take.

It makes sense if you do the math. If a growth rate of 10% yields a p/e of 10 for a company earning $5 per share, then the stock is "worth" $50. But when growth slows to 0%, or turns negative, the stock has no value at all (other than the company's tangible assets divided by umpteen trillion outstanding shares). Either way, 14 cents is roughly the value of a single share of any publicly traded company.

So now that the public has accepted this previously guarded Wall Street secret, where will the market bottom? From the people we've spoken to, the answer is "who cares". Wall Street has dug their own grave, and there is little or no sympathy on Main Street. Furthermore, most people realize that the housing market in the U.S. dwarfs Wall Street. The housing market must be stabilized, as it accounts for 33% of our economy. Wall Street is only 5% of our economy. The more people we ask, the more we're finding that other than insofar as it affects their 401k's, people would rather see Wall Street crumble than survive.

From our own experience, in a recent land sale of $16 million, the buyer drove up in a Prius. Certainly someone with $16 million to spend on land does not have to worry about gas prices. So, of course, we had to ask about his choice of wheels. "Screw them", was his reply. A simple reply, but boy did he say a mouthful.

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