Darwin (2)

We see that the market finished the year up off November lows. This could be due to a bear market rally, the fourth wave up according to Elliott Wave Theory, or some other technical pattern that will correct soon. Or, according to retail brokers and advisers, it's because the bottom is in and stocks are about to zoom up because . . . because of what? . . . because corporate profits are about to soar. ***right***

Also, note that each time there’s been a substantial uptick, it’s off lower highs.

Apparently, the Fed and Treasury would like to bail out every entity listed on any of the exchanges, in addition to the foreign banks and central banks they've been slipping money to under the table. They can't save them all, for one, and for two, the money they're giving away has to be paid back at some point. None of this benefits the economy, corporate prospects, or the stock market. After each multi-billion dollar bailout, the stock market stabilizes briefly then resumes its decline. So, stocks will continue trending lower and if prices don’t fall fast enough to reflect reality, the markets will settle things up and crash.

For investors who thought they were well diversified by owning foreign stocks, here's what happened to their portfolios:

2008: The year in markets (WSJ)

U.S. indexes
Dow Jones Industrial Average -34%
S&P 500 -38%
Nasdaq -40%
Dow Jones Financials -55%
Amex Oil Index -38%
International indexes
Germany DAX -40%
FTSE 100 -31%
Japan Nikkei 225 -42%
China Shanghai Composite -65%
Mexico IPC -24%
Brazil Bovespa -41%
Currencies/commodities
Gold +5.5%
Crude -54%
Dollar index +6%
Pound vs. dollar -28%
Dollar vs. yen -18%