Memo to those who live in caves: dump the insurers

When will Wall Street throw in the towel and admit the obvious? It's starting to remind me of a kid that's been caught lying yet sticks to their story, hoping that sheer will can convince their parents that they're telling the truth. When they reported three weeks ago, did any credible analyst not expect AIG's quarter to really stink? Has the market become so desperate/hopeful that it has deluded itself to reality. There will not be a speedy, neat solution to our housing/credit problems.

Every time I turn on the TV, there's some sycophantic"economist," "market strategist," or "President" telling us that a recession is not going to happen. They're right. It's already here. Recessions are part and parcel of a capitalist economy. They've occurred with regularity and will continue to do so for the forseeable future. I agree that both business and central bankers have lots of new toys that can help them navigate the recessionary shoals better than in years past. However, for all our genius at financial engineering, we have yet to invent a derivative or ETF that will allow us to avoid the business cycle.

Let me use a metaphor from professional basketball. Right now, the stock market is like the woeful New York Knicks. The Knicks have been bad for years and haven't made the playoffs since the 2003-04 campaign. Their problems are legion, but basically it comes down to the fact that they are dishonest with themselves. They haven't been able to accept a) that they are bad and b)there is no quick fix for a. Management at the Garden seems to believe that New York fans won't accept a rebuilding effort, that they are so moronic/crazy as to believe that their team can contend every year. Consequently, instead of letting bad contracts expire, building through the draft, and creating cap space for strategic forays into the free agent market, they haphazardly throw around money like that former telecom exec who dropped $241,000 at Scores a few years ago. They pile up bad free agent signings like a kid creating a snow fort. They mistakenly always belive that they are one deal away from being good again. No, New York, won't tolerate re-building, but they will tolerate an expensive yet awful team that has hopes of getting better any time soon.

Wall Street is no different right now. The Street is desperately searching for any indication that the sun will come out tomorrow, some sign that things aren't as bad as they seem. Perma-bulls like Abby Joseph Cohen continue to pick the market to rise and is even recommending tech. Thank God she finally stopped recommending Citigroup! I give her props for work in the 90s, but it's time for the media to stop giving her a pass.

Things are bad. No one knows when they'll get better. Stop looking for a bottom or an inflection point. Those things aren't apparent until after they've occurred. Just try to stay alive. If you're brave, like Wilbur Ross, you look for an opportunity. Or sit it out. There's no shame in cash. Don't be the Knicks and think that you always have to make a move. You might end up with a Marbury in your portfolio.