The Daily Reckoning Australia newsletter of today is kind of short but what really got my attention was  short term treasury bonds trading at a negative yield. In other words, they cost more to buy than they are worth when redeemed at full maturity, which is completely unprecedented. Apparently, traders think that US bonds are the best place to put one's money, even at a negative yield (guess they figure it just loses money less rapidly??!?) If I was an investing man and had any money, small problem that, no money, I would have gone short on oil in July and had money but alas that trade is gone, and oil has very little room left  to go lower and no fundamentals for a rapid increase near term. Matter of fact it lost another $6 a barrel after OPEC swore on everything but the Bible that it was going to cut production by up to 2 million barrels per day last week. Kind of like the stock market after Bernecke, Paulson and co. pushed the funds rate to zero, small rise and then the continuing plummet. The perceived reality is nobody has enough cred for the market to have a lasting faith in, and things are not even close to being unwound yet. Think the housing bubble is bad, wait until the commercial paper starts to shred.  Oh and BTW, AP asked the largest banks, you know, the billion dollar bailout babies, what they did with our money, and they either said they did not know or they refused to tell. We do know they have been doing everything BUT what the purpose of the money was intended for, which was lending it to people so they could  buy  some of those repossessed houses. What to do, short of applying for a bailout?  I would probably buy some gold futures on pullbacks (gold is even for 2008 if you can believe it, after hundreds of dollar per ounce price swings! But further into the deleveraging/deflation cycle I would start looking at gold stocks on producers, like Newmont gold for example, because they will be bargain basement price after the stock crunch and cost less to buy with  higher upside  return than physical gold), and do option puts (selling a commodity short) on overpriced commodities like copper, uranium etc that are going to crash and burn as manufacturing plummets. The same holds for stocks, one can sell short a company stock, so if you do reverse analysis and look for the weakest of the major players in a sector or industry, you can make money on their way down. The real problem, as these authors note, is that everything seems so obvious that everybody KNOWS what has  to happen in the markets. (which is the sure sign to run the other way, or at least wonder why all lemmings love cliffs...) The real kicker is the timing..., just ask me as I was right on the direction of every trade I made but lost my money because of timing, usually by being too early into a trade. I really think in the short term gold, and gold stocks,  are going to take a hit also, perhaps down to the $600 range before the deleveraging is done and inflation kicks in. One thought I want to leave with you as an investing strategy these people don't talk about, and that is you can make money when companies and commodities are going down, not just when they are going up, so your asset management strategy does not have to be solely preservation. You can recoup your nest egg now and watch for the change in gold and other commodities when the inflation spike comes, which will be more rapid than the oil spike and slump was, in my opinion. I just think deflation is going to continue for the next few months and any money you can spare is better placed on strategic short bets.