THE KISS OF DEBT

The positivity of this event is as clear as it will ever be...watching and investing in this holiday tape is always rewarding as traders way over trade, people square books for tax reasons (loss or gains), raise cash to pay bills and money managers chase the best performing assets for year end display (to customers)and punt the worst relative performing stocks...

The banksters should be no surprise..the most hated business... even by the country's leadership....is the worst performing group.

Almost all the domestic and international "investors" in our nation's debt now hold it at a loss....depending in part which currency you are domiciled..

The tax loss selling bounce candidates are harder to pick this year....given such extreme movements down and up....

IBD says, "Some investors are still in cash despite 2009's 24% gain through Dec. 10th, which would rank 23rd best among full calendar year returns for the S&p 500 since 1926." The US Dollar/ cash of course was the worst performing asset in the world for 2009.....

We are at extremes though..

1) Net out flows of money in the stock market for the year by the public.
2) Net inflows over $300B INTO BONDS by the public.
3) Near record cash on the books of major US corporations (XOM DOES AN ALL STOCK DEAL??)
4) Almost nobody is bullish on 2010 for much of anything....in fact most are calling the current global capital markets another bubble ready to burst....for everything....
5) China again is being questioned in disbelief anything positive could be happening there...
6) Gold is casually called a top by everyone....as well as most in oil.

We are struck by the complete lack of any positives by most of the world's investors for 2010-2011. We have a hard time remembering another year around Xmas with so much complacency...

For certain.....the debt (funding ongoing losses) game is over for wdc, llc....their/ our cost of capital is going to scream higher.....the markets are sending a very clear signal....the relative performance of cash and debt to hard assets and equity has begun...utilities, oil and gas trusts, mlp's, reits, super blue chip div plays are getting all the action.....our focus.

Danny Boy seen here ready for the holidays...his favorite time of the year.