Happy New Year!

Here Comes the Sun

Little darling, it’s been a long cold lonely winter

Seattle is particularly dreary this time of year. Buckets of water fall on my rooftop, and I wonder if I'll every see the sun again.

The market is no different.

This whole year has felt overcast. Occasional sunshine peaked through as the S&P and Nasdaq rose to levels not seen since the months before 9/11. However, with Hurricane Katrina, we have seen storm clouds and sadness.

Sentiment is beginning to reflect concern. If its not one thing, its another. The latest meme to capture the hearts and minds of players is Yield Curve Inversion.

Consensus is that we will NOT SEE A RECESSION. This is a bit odd because the inverted yield curve seems to be a good predictor of recessions.

I think most players would like to see volatility pick-up. My guess is that things in motion tend to stay in motion, and that we will not see volatility anytime soon.

We will continue to slog along until something breaks. And so far, despite all the warnings about the housing market, nothing is breaking yet.

So, best wishes for health and prosperity in 2006!

May God help us all!