this is radio tabs

--------------------------------------------------------------------------------

Almost a year ago one lambasted a Board member for bailing on the market at SP1045 since then the SP ran to 1370 after QE2 was implemented. Now with the end of QE2, the Euro Debt issue and the opaque nature of the Euro banks some say 40 to 50 to 1 in leverage, the seeming dysfunctionality of the US government, the SP Downgrade and almost at stall speed of the US economy we are back down to roughly 1120 on the SP in 2.5 weeks.

Panic selling has taken place, the baby with the bathwater has been thrown out. Corporate earnings have generally come in strong again. The US Treasuries have once again become the refuge of the desperate in their On The Beach Strategy. Some banks are even charging to hold cash and are paying virtually no interest. Treasuries have fallen to record lows, which in the longer term means a negative return on investment. Gold has set a new record of $1800 an oz and the USD relative to stable currencies has fallen.

Now even the Donald of Thrump has invested in the Big Cap's and Banks. Insiders are buying shares like no tomorrow. Does this mean the Stock Market is now CHEAP?

Here is something to consider...When one lambasted our Board member the SP500 was in a trading range of 1040 to 1125. The market has been holding at the 1125 level, which means we have given back all the gains of QE2 but have not fallen below the levels of the snap back rally of 2009-2010

While Monday was a bleak day, Tuesday was up sharply, Wednesday was down heavily and today we are up again. This clearly indicates that the sentiment and thus the tide of the market is changing The panic is receding.

When Big Cap stocks are paying dividends in the 4% to 6% range and are trading at roughly PE 11 X earnings there is a capital gain waiting to be picked up along with the dividend. Consider that many of these companies have not missed a dividend in 60 years or more one wonders exactly what risk the risk to reward ratio is?

Also one has to wonder if some of these Big Cap stocks go under what exactly will be left standing? The answer is nothing much. Yes the world is on shaky ground with the Sovereign Debt issues and it can all blow up in our faces.

The outcome of the SD issue is likely to be over time an end of the Progressive era of big government as budgets will have to shrink one way or another. Yes these issues along with the American structural economic issues will cause a slow growth economy for the foreseeable future. Americans will have to readjust thinking in terms of making and doing with less. Especially when one considers that it was the use of the Credit Card that sustained consumption for the past decade or more.

So is it the end of the world? The answer is no it isn't. It however is the convulsive end of an era, and the beginning of a new one. So TABS is turning guardedly optimistic.

What we have seen is that all the Kings Men and ALL The Kings Horses of the Progressive era have FAILED to rectify the economic malaise. They have been discredited as being a failed model. The Obama's of the world don't have an answer and have decided to go play golf instead, the Fed has shot its bolt and anything more that they do has to be weighed as have a negative response in the markets. The European Socialists have shyte their pants and have flooded US Treasuries and Hooliganism has raised its head in the UK. In other words CHAOS has won as men throw up their hands in surrender at trying to control outcome. Now we can start to heal.