A Couple of Cool Graphs

The US debt-to-GDP ratio has a lot further to run. The question is whether Obama will give the US economic problem the sense of "wartime" urgency (as FDR did). I suspect that he will be a gradualist, and the US economic will hit a second leg down by March.

If McCain is elected, then he will focus on fiscal matters. My guess is that he'll toss a few crumbs to people, but then he'll start cutting the budget. This will cause the economy to slide even further and faster.

Regardless of who is elected, whatever they do will be too little, too late and we will have another leg down by spring of 2009.

In the meanwhile, we remain on hedge fund death watch. I think that on scary HF blow up news, the market will be a buy. On rally days, the market will be a sell. There is heavy resistance between 1100-1200.