Guns A Blazin...

Lately I can't but help recall that great song by Johnny Cash, Don't Take Your Guns to Town. As the song goes a young man heads to town with his gun at his side, against the crying pleas of his mother. Despite his reassurances that he's not looking for a fight and would never shoot first she laments his death before it even occurs. Once in town he goes to a bar and has a drink to calm his nerves set alit because he's carrying a gun for the first time. A stranger noticing his attempt to be a man laughs at him, evoking the mortal response in the lad.

I can't help but draw the analogy between that yarn and the fiscal, and to a lesser degree, monetary, policy we've seen over the course of the last year beginning with the loosening of the Discount Rate at the Fed in August of 2009. If we don't know all the specific announcements since we certainly know they are throwing everything, including kitchen sink, at the global problem. More recently, the activities have been coordinated amongst federal bankers across the globe. I even heard over the weekend the Chinese were stepping up too.

Sometimes effort counts for something. Sometimes things are better left alone, left to a natural course. I believe that this is one of those instances where our attempts to stem loss may only serve to make matters worse sometime in the future.

Each time a federal authority stepped to some microphone, be they the President, Paulson or Bernanke the markets tumbled. Why? Its the old addage: "Buy the rumour and sell the news". Market participants, especially the largest found regilion and saw the errors of their ways. Once the rope was thrown investors assessed the action and figured it wasn't enough and wasn't going to stem the losses that day. N0thing but time and many failures will truly redress the wounds. I know when I prune my roses they flourish thereafter.

Fast forward to the present and we now have various federal governments owning shares in banks of their respective countries. If this doesn't co-mingle issues of regulation with the free market I don't know what does.

Had the authorities had some moxy and patience to let the strongest survive it may be over sooner than later. Pulling the bandage off fast is always the best way - deep short pain.

Because we at CastleMoore do not pay as much head to economic or fundamental news in our final investment filter we have done well for our clients in choppy, rotating markets (Please request a representative - actual - client ROR). Moreover, selling is a serious and essential part of our investment methodology.

However, we do lament that the broad markets may be in for more trouble in the future due to shortsightedness shown today by our economic leaders.