As the fallout from the Bernard Madoff scandal continues to be unraveled, the story only gets sadder and sadder. Many people seem to believe that the victims are just very wealthy people, but this is absolutely not the case. Some of the victims are retirees that have lost everything and can no longer pay their day to day bills.    

Well, 2008 has been a period of deflation. The U.S. and global economy has slowed dramatically and thus corporate expansion has come to a halt as consumer spending dried up.

So the Fed didn’t sit idly by. No, they do what they feel they do best which is print money. It’s a great tactic short term to get things going…normally (but usually a bad mistake longer term for the economy).

I say, normally, because when the Fed pumps money into the economy and gives banks access to more money and lower interest rates…they normally pass along the money and the low rates to the public and to corporations which need the money to expand and grow.

For years and year, whatever direction the euro went, the pound tagged along and vice versa. This produced a wide trading range for the last 30 years. However, we live in a new day today as we break through those historic highs this month!

Check out the chart below.

30 Year Highs are Taken Out! Will we reach parity?!? 

There’s been a power struggle since the advent of the euro!

Tax harvesting is a small silver lining in a year like 2008 for most investors.   It allows you to take advantage of the poor performance of investments for tax purposes. 

2008 was a wild and hairy year for sure. Volatility was the highest I’ve ever seen it and also the highest I can ever find on record.

The Dow dropped from over 14,000 down into the 7000s. Oil dropped from $147 down to just under $40. These were some of the fastest drops I’ve ever seen in my life.

 So what’s in store for 2009 for stocks, bonds, commodities and currencies?

 Stocks finally stabilize and a few “select” sectors will lead the way out!

In stocks, you are going to see stabilization for 2009. In fact, it will likely “base” in a very wide sideways range for much of 2009 as it catches its breath to head higher into the next bull market in late 209 or 2010.