Another Dreadful Day

Just another dreadful day. Nothing can go right. Best Buy issuing just horrendous guidance, Paulson playing pick a plan showing no confidence and receiving none in his press conference, and then Intel after the bell also releasing horrific guidance setting up for a massive move lower at the open tomorrow which if it occurs will slice through the October lows. There are signs of capitulation (really for maybe the first time this whole thing started) with quotes of some of the Titan's of finance finally looking gloomy. These same guys 6 and even 3 months ago still thought the world was rosy.

You had Dimon saying the economy was going to be worse than the credit crises.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5NNkx582T90

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the U.S. recession ``could be worse'' than the credit-market crisis that brought lending to a standstill.

Unfortunately he added this:

Still, Dimon said there is reason for optimism about prospects for the economy. ``We're not running this company like we have a Great Depression,''

The CEO of Merrill Lynch, John Thain, filled the gap.

http://www.ft.com/cms/s/834ebf5e-aff9-11dd-a795-0000779fd18c,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F834ebf5e-aff9-11dd-a795-0000779fd18c.html&_i_referer=http%3A%2F%2Fcalculatedrisk.blogspot.com%2F

The global economy is entering a slowdown of epic prop­ortions comparable with the period after the 1929 crash, John Thain, chairman and chief executive of Merrill Lynch, warned on Tuesday.

But former Goldman Sachs Chairman John Whitehead outdid them all.

http://www.reuters.com/article/Finance08/idUSTRE4AB7HT20081112

The economy faces a slump deeper than the Great Depression and a growing deficit threatens the credit of the United States itself, former Goldman Sachs chairman John Whitehead, said at the Reuters Global Finance Summit on Wednesday.

Whitehead, 86, said the prospect of worsening consumer credit woes combined with an overtaxed federal government make him fear that the current slump is far from over.

"I think it would be worse than the depression," Whitehead said. "We're talking about reducing the credit of the United States of America, which is the backbone of the economic system." Whitehead encountered plenty of crises during his 38 years at the investment banking firm and was a young boy during the 1930s.

First the bad news. All these guys are probably right and saying things I have been saying for a long time. Now the good news. You need this race to the bottom of who can be the most bearish, the most cataclysmic, the most depressing for the buying opportunity to finally develop. This is the first time I have seen it at all in those whole debacle by what I call main street wall street. Not the smart money that manages money but just the normal Wall St types. I have not seen this level of pessimism through this whole thing but rather continued cheerleading. I noted on this blog on the October lows (the Monday after the intraday low on Friday), I was dismayed at how many bottom callers you had. At some point we are going to stop setting news lows every one to three months and will establish a low that will hold for many months. I thought October may have been it. Not looking like it but if you get Wall St in a game of who can be the biggest bear, in the short term, the bear may be headed into winter hibernation after this next drop. We could very easily be 10 to 20% lower than we are currently for that to happen.