Said quickly with a drawl it comes our as "The Obama Hamma", which seems appropriate. His attacks upon free trade and upon free speech (with the rant against Rush Limbaugh) have been quick off the mark.

The Administration, with Pelosi's Congress seem to be bullying operators who will push the political fabric to the limit.

The damage being done during a relentless post-bubble contraction is bad enough, but to have it made worse by political bullies intent to impose socialism, under any guise, is going to add even greater distress to financial markets. Until the groundswell for another benign American Revolution builds up, perhaps the only constraint upon the full implementation of brutal ambition will be financial dislocation, made worse by political folly.

Socialists are a study. Feral socialists who have been out of office for awhile seem even angrier and more ambitious to impose policy than those naively new to power. Eventually, they realize their mistakes and much like a cat clawing the furniture - they can't help it and always look guilty when reprimanded. Such full reprimand by market forces could be some time off, and, in the meantime, no one's furniture is safe.

Some observations:

• As Ross points out rebounds in a lengthy bear can range from around 25% to 40% retracements.

• During the "Lost Decade" following the Nikkei high at the end of 1989 there were 13 rallies that accomplished a 25 percent retracement of the previous loss, and there were 5 that did the 40 percenter.

The classic fall crash completed on November 20, which was also the day that concluded the similar crash that ended the South Sea Bubble.

In our case, the rebound out to the first week of January amounted to 25% for the Dow, 22% for the Toronto index and 24.5% for the Nikkei. Retrospectively, this was too much - too soon, making markets vulnerable to the discovery of Obama's true ambition.

Ironically and eventually, protectionism has been one of the features of every post-bubble contraction. After exaggerating speculation on the upside, politicians are programmed to make things worse on the contraction. Comparing well with cats and furniture, one following the 1825 mania was called, in real time, "The Tariff of Abominations".

• We expected a number of bad news reports about banks and the economy, but the addition of Democrat folly has been quicker than we thought possible.

• Obviously, this, along with the strength to early January, is impairing the returns possible through the first quarter. This is regrettable, as after May the damaging contraction has been expected to resume.

• We would maintain trading positions established in November in Golds, Base Metal Mining and Oils.

Link to the Friday, January 30 "Bob & Phil Show": http://www.howestreet.com/index.php?pl=/goldradio/index.php/mediaplayer/1100