DJIA

open10,458

close 10,544.13 up 81.63

day high 10,567.59

day low10,458.60

today's volume 190,715,523

3mo avg. daily volume 197,317,916

DJTA

open 4,401.01

close 4,447.44 up 46.26

day high 4,471.77

day low 4,401.01

today's volume 12,633,634

3mo avg. daily volume 17,958,165

Another day, another solid open and a sell off throughout the day.  Today saw average volume, which is a rarity now-a-days, but I recall a month ago average volume was about 10% higher, so still nothing to write home about.

Freeze, Fight or Flight

Everyone says the "fight or flight" mentality naturally kicks in when something's life is at risk.  I live in Colorado, where deer and elk encounters are very commonplace; especially on the highways, and primarily when you're traveling at 60 mph and there is otherwise nothing that could possibly be done about the situation.  If you have never experienced the phrase, "deer in the headlights" than you can't know how true it is.  Most times you are able to swerve out of the way... unfortunately sometimes you are not.  I've never been involved in a deer collision, but my parents have, and most everyone I know has, so I say a quiet prayer every time I get behind the wheel, especially during winter when they have retreated from the high country in search of food, and most importantly, at night.  I mention this fact of life we must deal with out here for one reason... the deer does not know it's life is in danger.  In fact, it does not know that unless it does something, it's life is over.  It's a guarantee.  A deer can do quite a number on the front end of a car, but the car always wins.  

I think of the bond markets and real estate markets right now.  There is a crisis looming, and there are unfortunately few of the "traditional" options.  Wall Street tells us that if not stocks, then bonds, and the flood into debt instruments has been impressive.  What is interesting is at the "moderate" inflation rates we have today (as per last FOMC meeting minutes, a paltry $10 billion monetized a month is all we'll have for the indefinite future), people are still running for "guarantee's."  I was at one time a licensed annuity broker.  I never fully understood the concept of sacrificing any semblance of liquidity for "a guaranteed rate of return."  Where they really get you is when you actually do annuitize and then it's not even your money any more.  The only way to win is to live longer than their stated payout dates... but what people don't understand is that insurance companies are in the business of making money, like everyone else is.  So whatever they say about doing what's best for "you," even when that's true, they're certainly not doing it at there own expense. 

So people today are absolutely flooding into "guaranteed" rates of return in bond portfolio's or fixed rate annuities, which are also usually invested in some form of note or bond portfolio, expecting things to be fine... and they will be, assuming that interest rates do not increase during the duration you own the asset.  

So, do I believe interest rates could increase at some point within the next 7 years... well, how would you answer that question?

So we are frozen.  What will be impressive is a wave of flight capital seeking true safe haven's should there be a looming crisis.  To the few of you arrogant enough to fight these markets, more power to you, and if the rest of us are wrong you're set to make a large fortune... ...if the rest of us are wrong... of course.