is making believers of the skeptics on the sidelines.

Fear Disappears From The Market according to Clusterstock:

Says Clusterstock, "More evidence that investors have gotten very complacent in this market. Not only does the market continue to rally, but the VIX, sometimes called the fear index, is at the lows of the year. There was a brief spike before September, but since then it's collapsed."

Upcoming earnings are improving -- finally reflecting the benefits of firing all those people.

The alternatives? I've hit this issue in recent days. There aren't any significant alternatives. But nothing captures the flavor better than a gruesome email I received yesterday. It came from one of my real estate syndicators. Here's an excerpt -- as much as you want to stomach.

As you are all aware, the ongoing global recession has caused significant lending problems in the entire commercial real estate industry. The lack of liquidity in the market has basically eliminated all lending for the foreseeable future on any kind of normalized terms. The XXX Partners have been carefully monitoring the current status of the financial markets, particularly as it concerns our loan maturities coming up in the next 24 to 36 months.

We have all seen the turmoil that the world’s financial markets have experienced since mid 2008, with the majority of lenders seeing the value of their loan portfolios fall 20% or more as requirements for “mark-to-market” accounting reduce the value of the underlying real estate. Appraisals prepared for financial statement purposes present very conservative valuations – a result of a lack of recent “normal market” sales in the marketplace and also by appraisers deriving value by assigning arbitrary underwriting assumptions. A building appraised at $15 million in 2007 may now be appraised as low as $10.5 million, without any negative change to the rent roll of the building, simply by changing the capitalization rate in the appraisal.

As a result of the above, most real estate investors have been faced with very reluctant banks when it is time to either (a) periodically test compliance with loan covenants or (b) need to refinance or extend an expiring loan. Since competition for financing has all but dried up, lenders are currently in a strong position to make demands ranging from higher interest rate margins, significant delevering or even payment of the full loan balance. This has placed an enormous burden on the equity investors who have been faced with reduced returns and unexpected capital calls, even for well located and well performing assets. In fact, good assets are more likely to be targeted by lenders because they are more able to comply with the additional requirements.

This is an industry-wide phenomenon and it is expected that the industry (which of course includes our investments) will see a significant delevering exercise over the next three years. New commercial real estate loans will be made with more conservative assumptions, including lower valuations, lower loan-to-value (typically 60-70%) and higher interest rate margins, than we have been used to since 2004. A high volume of real estate investments were made at the height of the real estate market in 2006-2007 with short term (three- to five-year) high leveraged acquisition loans. Based on this fact, the system is expected to face significant refinancing problems and there will be major loan defaults in the commercial real estate sector.

This situation will provide opportunities to acquire prime real estate from distressed owners at heavily discounted prices. XXX, as an experienced and successful owner/operator through several real estate cycles, will definitely be pursuing high return opportunities. However, we want to make sure that you realize that we must review each asset in our portfolio to determine which ones could be faced with a delevering request, regardless of its performance. As mentioned previously, lenders are taking a hard stance and do not face any competition in the current market. They are faced with portfolios of bad loans that they need to deal with. These bad loans are typically unable to meet stricter lender demands. Therefore, lenders will try to aggressively renegotiate the more profitable and well performing investments.

As most of you have been aware, some of the our investments have already been faced with delevering requests and we have been proactively negotiating with our lenders on all our loans that are expiring over the next 12 to 18 months. By the end of this year, we will have reviewed and discussed with lenders 100% of our loan positions, even for low levered and well performing assets.

So much for real estate syndications, for the time being. No sales. No opportunities to buy cheap. Maybe in a year or two.

Meantime, all my recommendations -- bar one (more about that in a moment) -- are skyrocketing. Recommendations include GOOG, AAPL, BYDDF, GLD, SVA, BCRX, EWA, EWZ and FSAGX. One exception in recent days in STEC:

In the longer view, this pullback is neither significant nor major (not breaking any trendlines, etc.)

Still I dumped half my STEC holdings. One can never get poor by taking a nice profit.

EWA is Australia. I was pleased to see this short piece in yesterday's Wall Street Journal column Heard on the Street

Carry On, Australia.
A stable currency, resurgent economy and elevated interest rates. Such a target for carry-traders exists in familiar territory: Australia.

The country's resource-rich economy is rebounding -- thanks in part to rapid Chinese growth. Interest rates, already relatively high at 3%, will soon start rising. With U.S. rates essentially at zero, the gap with Australia's rates is the largest since 2005, and futures traders see it widening further.

Meanwhile, cheap U.S. money has made the greenback start to look attractive as a funding currency. U.S. dollar Libor even dipped recently below a similar benchmark for the yen for the first time in 16 years.

One indication of renewed interest in the Aussie dollar: Japanese households held 12.3% of their foreign-currency assets in the currency as of July -- a record high, according to Westpac, an Australian bank.

The risk, of course, is that the picture was even prettier in the carry trade heyday of 2008. At that point, traders who borrowed in yen and invested in Aussie dollars enjoyed a 7% spread -- before the Australian dollar slumped in value, carrying out many who were enjoying the easy profits.

With traders often unhedged against such currency risks, currency stability is critical to the carry trade. On that score, the outlook for the Australian dollar is good, with interest rate rises expected in the not distant future.

But for the carry trade to return to its old self, one more piece has to fall into place: leverage, to juice the returns. With risk appetite still rising across the system, perhaps it is only a matter of time.

EWZ is Brazil. Everything is going gangbusters there also. And EWZ is reflecting it:

More US dollar woes ahead. The investment newsletters are full of apocalyptic visions for the stressed U.S. dollar. Sample:

“The Fed and the Obama administration seem to be pursuing policies that are dollar-negative, and they give no hint of letting up,” -- John Mauldin of Thoughts from the Frontline. This chart is from Investment Postcards from Cape Town:

Frankly, it's hard to see the dollar going much lower. My hedges include gold (GLD and FSAGX) and overseas stocks -- Brazil (EWZ) and Australia (EWA).

The securities salesmen are pumping again. They're on the phone again pushing everything from their latest stock tip to their latest fund of funds. Please don't forget that most-difficult-to-say word -- NO. Practice it now. Say NO three times.

HDMI cables? Reader Alan Seiden loves MonoPrice.com for his HDMI cables. He writes, "Their cables are high quality, much better than what I found in RadioShack, and much cheaper, too. Highly recommended."

Late night humor
+ "Yesterday in New York, President Obama had lunch with former President Clinton. As he was leaving, Clinton told Obama, 'Remember, if Hillary asks, we had lunch and dinner, then I slept over at your place.'" --Conan O'Brien

+ "Yesterday in New York City, President Obama gave a tough speech to the Wall Street Executives. See, Wall Street is considered a safe place for Obama. You see, on Wall Street, if someone yells out 'you lie,' you could be talking to anybody." --Jay Leno

+ "Kanye (West) was pretty hurt when he heard the President called him a 'jackass.' But then Joe Biden said, 'Ah, you get used to it.'" --Jimmy Fallon

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.