When the boat’s below the water-line, you can’t bail out a sinking river…

From BoingBoing…

Bailout costs more than Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, Iraq war, Vietnam war, and NASA’s lifetime budget — *combined*!

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• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

Every IT organization can benefit from knowledge-sharing. An example of this, and a particularly resource efficient way to grow the skills of almost any organizational unit, is to allow for cross-training.  An exceptional vehicle with which to present cross-training is as a component of an “20% Plan.”

A 20% Plan might include time for members of an organization to expressly work on their own ideas (Google has such an installment within its workflow). There are other ways to make use of such an allotment of time for an organization — though, with this design Google leans toward fostering creativity.

A sound structure to develop and implement cross-training, starting with the most credible and knowledgeable members in each sub-unit, is a well-rounded, mature accent to any IT organization — and might make a smart form for early adopters of 20% Plans — especially at Universities, where the resources to teach in mass are at the ready.

Installing such a facility to members of organizations helps to build important relationships, promote trust,  and can increase the overall value of each and every member. In this way, peer review allows even the cross-training methods to become better over time, and over-time impose internal efficiency standards on each developed organization unit.

I suggest something along the lines of: members develop training topics as a function of their skill-set, while audience size and reaction determine acceptance and effectiveness. In this way, the raw data help to demonstrate direction and help organizational development respond in something closer to real-time.

We were right on the money yesterday here at Matt-That.com, with our prediction about the US stock market. As we expected, after washing out a false rally, the market turned downward. Howsoever, the sellers came out, presenting the kind of volume, that suggests we’re only closer to the second part of my prediction: that the market goes unfeelingly sideways.

In today’s session, traders and investors alike, from all around the world, will be forced to learn about a new mechanic taking shape in this market: Conjuration, I call it. Its certainly existed before, but not nearly as it does today.  Conjuration is the first step in creating pump and dump bear traps.

How do you create a Bear trap?  First, you conjure value out of thin air by suggesting if you miss a particular buying opportunity, you will get no other. This conjuration of value creates the same panic used during selling to initiate worry about being left out of the market, causing panic buying.

Today, we will conjure such value, in the form of a rally of immense proportions, with almost no basis in reality. This will form the upside dressing of the next stairstep down, continuing the wash-out of millions of new investors/positions. Soon, this exact ebb and flow will drive the market sideways.  The disinterest will be more profound when there is no dumb money to dump your shares on, nor trade volume to pump them up.

Many people have been taking advantage of the traders nature of this market — full of ups and downs. So, in order to remain safe, how can we time the beginning of this rather troubling event, of a side-ways market, to avoid holding positions on either side?

Monitoring the pessimism, using its reversals, we see its strength has grown to the downside, not diminished. So, we can begin to sell our short positions here (the most leveraged first). And we should not look to acquire many more leveraged positions going forward.  Leverage on any direction is the most dangerous position to be in, in a sideways market.  Logically though, what indicates the coming sideways market?

We’ve had sellers from 14,000 to now 7900.  And sellers came back into this market to take us to those levels. There can be only so much more selling pressure on the sidelines as we go.   But, what about the positive story then?  If we’re out of sellers we must be full of buyers, no? First rally almost 1000 points.  Second rally half, at just 550 points. Third rally, half again, some 250 points.  Strange, we’re running out of buyers too.  And that, is how you end up with a sideways market.

At points of maximum pessimism and optimism there must be cyclical reversals, otherwise a market has no psychological basis with which to use as function for pricing.  Todays cycle suggest the kind of rip-your-face-off rally we saw the first time.  And, like the first time, it will not hold.

The Dow Jones Industrial Average closed yesterday with a 7900 handle, 7997.28 to be exact. It marks the first time these levels were closing levels for the index in over 5 years (almost a full 50% down from the peak of a 14,000 handle just recently set a year ago, in October 2007).

Chart technicians are on both sides about what all this means.

I think its important to point out price action on another closely watched index full of widely held stocks, the Dow Jones Transports Index, which made a fresh low during this sell off. This is suggestive that today we will likely see that same action more broadly. Transports led us through the commodities moves on both sides, which have been nearly dead-locked with the market, in a state of stair-stepping deflation.  Trading volume has also wound down dramatically.

These are not indications of re-valuation of the market, nor are these indications of price re-entrenchment.  These are not indications of capitulation.  These are indications that the US equity market is about to change its tone dramatically.

The final destination of this market, after its traded down, washing out perhaps hundreds of thousands of new investors in hundreds of varied positions, is not excitement.  It is not a psychology of buy & hold. And it is most certainly not a market psychology which leads to rebounds. This market will trade into such low volume, continually taking out players, vaporizing capital turned equity, only further removing opportunities for uptrend trading.

In the end, the action will go side ways as the whole market becomes apathetic. And while all historical indication tells us that we have a green light in a Bull market, a red light in a Bear market, a sideways market has only one indicator and it hangs brightly now over the door: the exit light.