Warren Buffet was quoted over the weekend saying the economy is in shambles and that it will last for the rest of this year.  Not sure that’s news, yet it’s surely captured headlines.  In fact, Buffett may have needed (he surely wanted) to refocus some of the VERY negative spot light on him, given that his investments, including Berkshire Hathaway suffered the worst year in it’s history, by a VERY large margin.  Don’t get me wrong, I like Warren Buffet, yet I’m NOT sure this is a time for him to be spouting off; perhaps he should stick to his knitting.

Anyway, the Asian and European markets sold off this morning, and then today the US stock markets sold off big time: the DOW closed today at 6763, down 299.64, which is lowest level since May 1, 1997 and the S & P 500 is down 16% in 11 days and 22% in 2009.

Specifically, the S & P 500 ended at 700, which is the lowest close since Nov 1996.  (While some traders have pegged 700 as a critical point level, which if reached would indicate a new low of 600.  While it happens to interest me, I don’t believe anyone knows whether this is the bottom, or, if not, where it is.  They haven’t in previous months, nor have they called the myriad 10-20% gains that various asset classes—including those of DFA—have posted over several weeks during the past months.

There is GREAT NEWS TODAY.  Oddly enough, while neither of these numbers was forecast, consumer spending was up in January as was consumer income.  How long that will last is questionable, given the rapidity of over-projection unemployment claims, granted.  Yet I suspect you may be receptive tonight to GOOD NEWS!  Oil also dropped 10%, so hopefully we’ll continue to see lower gas prices at the pump.

It’s also interesting that we do see emerging markets and tech both up over these past days and weeks, in general, and these don’t typically happen in “normal” bear markets.

We are clearly in a trader’s market, and in a derivatives and shorting market—none of which I participate in as a Certified Financial Planner at Capital Financial Advisors incidentally.

Hey, the new flood of derivative products each time new credit is created makes copulating rabbits look lazy.  Yes, all this betting on gloom and doom, and especially all this continued packaging of non-transparent product is CRAZY!

Yes, we are in what some refer to as a “great” recession; different surely from the Great Depression of 1929.  Yet a great recession will not show immediate promise.   Whether the economy recovers in 2009 is still negotiable, yet the stock market could very well recover before the broader economy does.

I’m praying for the day to come soon where the market’s blood-letting produces transparency.  Once that is restored, and only when that is restored can we expect some positive traction, and consumer confidence and recovering markets.

I am not a trader, let alone a short-term trader.  I have either harvested, or am in the process of harvesting tax losses in my clients’ portfolios in order to “bank” these capital losses that will be used to offset future capital gains.  As you may know, President Obama’s budget plans call for increased capital gains rates from 15-20% beginning in 2011.  So, there is clear value in shielding future capital gains from tax.

I did NOT recommend hedge funds, nor did I receive their fat fees and commission paychecks.  Yes, most hedge funds exacted exhorbitant fees, WITHOUT performance.

I don’t recommend or promote  esoteric financial vehicles that I don’t understand.  My advice particularly to mature women investors is to not invest in anything you can’t understand, or be taught to understand.

While the asset classes in which I invest are down, they ARE able to be defined.  Index-like investing with a Value and Small cap bent principally in Dimensional Fund Advisors, an institutional money management firm.  Real companies, in no-load, razor thin expensed institutional mutual funds.  No Madoff, no Ponzi scheme shenanigans.

Tomorrow Bernanke testifies and Treasury Secretary Timothy Geithner makes his first appearance speaking to the House Ways and Means Committee.  I will be watching and listening, of course, as I have been, low these past months.

The market’s news however didn’t compare to the recent sad news of Paul Harvey’s death at age 90.  What a WONDERFUL man whose rich baritone voice extoled the “the rest of the story” week after week.  May he rest in sweet peace!

As investors, we await the “rest of the story” in the markets.  Yet, my caution is that any short-term myopia about medium and long-term investments is surely misfocused.