I love it, amidst the ever increasing world woes John Thain has been forced to resign. Instead of showing empathy for his crashing share price he goes on a spending bender like no other. He pimped out his office last year with an $87,000 rug and a $68,000 credenza. In total Mr. Thain has spent $1.2 million redecorating his office. When Rome is burning why shouldn’t Mr. Thain have a nice office with a good view of the fires?

I love the audacity and thoughtlessness of the man. It just reiterates the disparity between Wall Street and Main Street. Thain was known as the Clark Kent of Wall Street but it looks like Superman went bad.

With Bank of America struggling to absorb Merrill Lynch and Countrywide along with its own credit losses this couldn’t have come at a worse time. Mr. Thain is also now accused of misrepresenting the risks Merrill had.

With the taxpayer pumping $20 billion into Bank Of America and backstopping $90 billion of questionable assets its not looking good for the battered bank. Additional losses and credit card debt are some of the highlights we can expect in this ongoing drama.

Industrial production falls by 2% for a second consecutive quarter in Japan leading to a technical recession confirmed by deputy governor, Kiyohiko Nishimura. Australia isn’t fairing too well either and our hopes of Asia dampening the western economic pain are quickly diminishing. Wage inflation in China and Vietnam will also put additional pressures on soaring inflation which is seeping into American and western imports. All in all this poses some interesting problems going ahead for struggling bear markets.

I on the plus side am short 5.50 Euro on two separate positions and am quite happy to leave them alone for a while. Merrill Lynch has come out with more write downs and the market seems deliriously delighted and rallies over 200 points. Is this not the third time the banks have raised their collective hands in the air and said “yes, it was me but I’m sorry” with their doe eyes how could they be lying. So off we go and load up on shares. Well apologies if I fail to believe them with my cynical pessimism. There is more to come, a lot more to come.

For the moment I’m looking at selling up and cashing in at around 5050. My previous statement of a new low of 4500 may be hard to reach with oil reaching lower lows. This takes the pressure of the steamer for a while.

Annoyingly I set a stop loss on my current position and was stopped out this morning for 20 Euro rather that the 140 Euro it was looking at last night. Merrill last night shocked the markets and re-enforced the distance between fabricated statement and the truth. Trust in bank statements is now at an all time low.

For my part I was short and brought my stop to break even in spite of my conviction of lower lows. Of course as soon as I altered my stop the markets rallied knocked me out and are now flying lower at hi speed. Previously I either used wide stops or mental stops (yes they seem to work for me but they aren’t for everyone). The Dow Jones in currently -33 and not looking too healthy. I’m expecting a pop rally at some stage today purely because the sell off was so savage yesterday. With no positions open I’m missing out on the drop but don’t want to rush in for the sake of it. I think I will wait and see how the US opens and reassess then.