Last week, most Daytraders had a terrible week. The Bear slaughtered them by thousands. There was "Blood in Streets" at wire houses where Daytraders congregate. Did we witness beginning of a Recession or Depression last week?

There are many sound reasons for betting on Bear. Here are a half dozen reasons that Bear should win. 1. We've had a 17 year Bull Market. It has gone on too long and DIA is too high. 2. Private businesses are making less profit. 3. Few public companies are profitable. 4. Business costs are going up faster than business revenue. 5. The Feds should tighten money supply. I doubt they'll do it because they will fear Bear and potential of a Recession. 6. Inflation is higher than Government reports. The Government removed heating oil and gasoline from inflation index because they have nearly doubled in price.

Every public company has a permit to print money. We call their money "stock." The public company's job is to convince investors that their stock is worth more than investor's money. When you succeed, your share price is strong. When you fail, your share price collapses. Eventually, your company will fail.

Stock, like money, suffers from inflation. The objection to paper money is ability of Government to expand its supply. When a Government inflates its currency, it risks economic upheaval. National financial instability leads to political unrest. President Suharto of Indonesia is an example of risks politicians run with inflation.

Public companies run same inflation risk. One reason Canadian Stock Markets lack credibility is that they allow listed company insiders to inflate issued stock and dump it. I disagree with SEC decision to reduce holding period for insider stock to one year. The inflated shares hit market like a tidal wave. When U. S. Government inflates currency, it takes about eighteen months for American people to see higher prices. When a public company issues more stock, it often takes a few days for stock to depress company's share price. At best, it takes a year for company's shareholders to pay price for stock inflation.