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I’ll gladly accept beer (I’m a retired engineer — engineers love beer), but I’ll tell you without you having to buy me anything:

I went to cash. I could be wrong. I could be reading far too much negativity into this market, but what I’m seeing in international trade tells me that we’ve got more to drop from here.

If the SP500 closes below about, oh, 755 to 758 — somewhere in that range.... and doesn’t pop back up immediately the next morning... I think we go down sharply from there.

The central problem in the world economy is that there were many more nations than just the US who depended upon the US consumer. China, S. Korea, Taiwan, Germany, Canada... when you look at their trade stats, all you see is a curve that is dropping off a cliff. When trade declines like that, it means bad things for the world economy.

The US consumer has never had both their retirement investments (IRA, 401K, pension) AND their home equity hit as hard as this, and never at the same time since WWII. For the big cohort of the Baby Boomers, if their IRA’s/401K’s don’t recover (and I don’t see the market recovering for years to the 2007 highs), their home equity will not recover for a decade or more... they now have no choice but to save.

Well, saving results in “the paradox of thrift.” Since the US economy is (or was) 70% based on consumer spending, when these consumers stop spending and start saving, guess what? The US economy goes down further.

It is a no-win situation as far as I can see it. And the clowns in DC and NYC are not doing anyone any favors. There’s a whole lot of posturing going on, but there’s little in the way of serious attention to the real issues: consumer spending and home defaults. The only guy who is even marginally on the job is Bernanke... and he’s making moves that are getting negative responses from the Chinese, who we need to buy all this debt.

I’m not telling people what to do. I’m just telling you what I did. I’m a very active investor/trader, and I believe I have the discipline to get back in as well as get out. Too many people panic on the downside and don’t get back in on the upside — and there will be an upside at some point. We know that. I’m just in need of my time to do other things than watch the market, and I see nothing constructive happening in the next quarter (or two), so I’m getting out.