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9:00 AM EST, Tuesday, December 18, 2007: The market ails, as economic stats continue to show the economy weakness. Yesterday's stockmarket internals:

80% declining on the big board; only 20% rising. Huge numbers of stocks hitting new lows. Not a good place to be, though today we may see a "dead cat bounce."

A little ray of hope: my insurers seem to be coming back. Ambac rose 17% yesterday to $26.66. MBIA rose 3.4% to $28.54. And SCA rose 9.5% to $4.51. I still favor a small investment, spread amongst these three. Here's a link to my column of last Thursday.

Capital One continues its decline. Consumer credit has ballooned and the quality has progressively worsened.

I have a sinking feeling about Moody's Corp, the big rating agency that has screwed up so badly. A reader, Howie, writes, wait till the lawyers get a hold of them. Think of the HUGE conflicts of interests these rating agencies have where they are paid by the folks they are rating.

How much spam should you expect? It was an ugly meeting. "I'm getting 25 spam emails a day on my BlackBerry. I don't want to deal with them. It's your job to get rid of them," I was told. I wanted to laugh. 25 a day is few and easy to erase. But...

Spam is an ongoing battle. Spam filters can work. Tighten them. You'll lose emails you want. Since midnight last night, my spam filter caught 10 emails. Nine of them were not spam. I wanted them. Viagra is spelled so many different ways because filters don't catch all the iterations. The bottom line is spam works. Someone is buying all that Viagra. It's an ongoing battle, part of our new milieu.

Hanky Panky on Wall Street: From today's Wall Street Journal:

Bear Manager's Actions Are Subject of Inquiry

Federal criminal prosecutors investigating the collapse of two internal hedge funds at Wall Street firm Bear Stearns Cos. are examining whether a Bear executive improperly withdrew money he had invested in one of the funds while making optimistic forecasts about the portfolio's prospects, people familiar with the matter say.

Weeks before the two funds began imploding in April, fund manager Ralph Cioffi moved about $2 million of his own money from the riskier of the two hedge funds into another internal fund with a separate investment strategy, these people say.

Mr. Cioffi's move effectively lowered his exposure to the riskier of the two failed funds when it was on the brink of significant declines, these people say. No other senior Bear executive invested in the funds, according to people familiar with the matter. A spokeswoman for Bear declined to comment.

Speaking to fund investors not long after the money transfer, Mr. Cioffi and a fellow fund manager still were publicly bullish about their two main funds, High-Grade Structured Credit Strategies Fund and a riskier sister fund.

As late as April 25, when they held an investor conference call, the two managers were telling investors that the amount of money investors were attempting to withdraw was lower than the amount of new money coming in, according to a lawyer representing investors who lost money in the funds.

"The consistent theme was that the investor redemptions were a lot less than the fresh investments," contends Ross Intelisano, a plaintiff attorney whose clients lost approximately $80 million when the Bear funds collapsed in late July. "That's what kept people in."

Businessweek.com reported yesterday that prosecutors were examining whether Bear Stearns insiders associated with the funds were pulling money out of the portfolios before this year's mortgage-market turmoil. The Wall Street Journal reported the existence of the criminal probe in October.

Before he removed the $2 million, in February or March, Mr. Cioffi had invested about $6 million in the riskier of the two High-Grade funds, say the people familiar with the matter. But after moving part of that investment into a third fund within Bear Stearns Asset Management, as Bear's money-management arm is known, Mr. Cioffi's remaining exposure in the riskier High-Grade fund was $4 million, these people added.

The securities unit of the U.S. Attorney's office in Brooklyn began examining the failing Bear funds during the summer, people familiar with the matter have said. Alongside investigators from the Securities and Exchange Commission, which is conducting a civil probe, criminal prosecutors are examining whether the High-Grade fund and its riskier sister fund were properly sold and managed. The funds, which have filed for bankruptcy protection, wiped out $1.6 billion in investor capital.

There are two lessons here. First, it's not always easy to figure out what your favorite hedge fund is doing. Hedge fund docs are generally written so vaguely as to allow them to do anything, including borrowing money to bet heavily on on bonds backed by subprime mortgages. The extent of a hedge fund's riskiness is often not apparent. By the time, you as an investor do find out, it's too late.

Second, it takes time to get your money out of hedge funds. There are long periods your money is locked up for. Often, the fund manager may arbitrarily limit how much you can take out and limit in what form you can take out in -- .e.g. not cash, but stock or bonds in a totally illiquid bond or equity.

Why females should avoid a girls night out after they are married....
The other night I was invited out for a night with the "girls." I told my husband that I would be home by midnight, "I promise!" Well, the hours passed and the margaritas went down way too easily. Around 3 a.m., a bit loaded, I headed for home. Just as I got in the door, the cuckoo clock in the hallway started up and cuckooed 3 times. Quickly realizing my husband would probably wake up, I cuckooed another 9 times. I was really proud of myself for coming up with such a quick-witted solution, in order to escape a possible conflict with him.

(Even when totally smashed... 3 cuckoos plus 9 cuckoos totals 12 cuckoos =MIDNIGHT!)

The next morning my husband asked me what time I got in, I told him "MIDNIGHT"... he didn't seem pissed off in the least. Whew, I got away with that one! Then he said "We need a new cuckoo clock."

When I asked him why, he said, "Well, last night our clock cuckooed three times, then said "oh shit." Cuckooed 4 more times, cleared its throat, cuckooed another three times, giggled, cuckooed twice more, and then tripped over the coffee table and said "oh shit" again.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.
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