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9:00 AM EST, Thursday, January 8, 2009: Yup, all my readers will now say, "the minute the financial press and the investment newsletters think it's time to get back in is precisely the time to get out." And now everyone feels vindicated after yesterday's 245 loss on the Dow, erasing all its 2009 gains.

I remain skeptical of the stockmarket and remain largely in cash. Sadly, I don't have any brilliant ideas as to what to do with cash. The good news is that the muni bonds I was pushing a few weeks ago (because of their high tax-free yield) have now rallied strongly and yield much less. I'm pleased for the rally. I was worried that the high yield was telling me that some of my New York munis were in danger of defaulting. Now I feel better.

Spent two hours with The Workout Maven. Yep, that's his business. He takes over the management of failing investments. His business is booming (like shoe repair, repossession and consignment retail). His big boom is in crappy real estate deals out west. The BIG thing I learned from him -- the incredible urgency to get deals done and due diligence not done. Let me explain:

A few years ago, there was vast money chasing a home. Every hedge fund, every money manager, every investment banker was overwhelmed with money. They took the money. The fees were stunning. Never had so many people made so much money so quickly. The world's top earners were money managers. A handful of hedge fund managers earned over $1 billion in one year. No one wanted the money to spend it. No one can spend that much in one year. They wanted the money to show off. Money was a measure of brilliance.

There was one problem: There were fewer and fewer safe places to "invest" the money and make the returns necessary to attract more money. The pressures to find investments and find them quickly became overwhelming. My workout maven told me of millions of dollars "invested" in western desert land that was never visited. "Developers" popped up to invest the money. The "developers" received millions of dollars. Some they used for work on the property. Others they pocketed. When buyers failed to appear, the house of cards quickly fell apart.

No one knows where all the money has gone. He's out there picking up the pieces, and figuring today's value, if any. It's grim.

The Predictions Business. Predictions get you publicity. If you're selling something (like yourself), that's good. Mine are simple: This recession is going to get a lot worse. There'll be many more industrial bankruptcies and bank failures. More fraud and incompetence will appear. The latest is from India's Satyam Computer Services, whose chairman issued a letter explaining what he did. Click here.

Bryon Wien, 75, has been making predictions for years. They're among Wall Street's most famous:

Byron Wien’s ten surprises for 2009

Dead on target at the beginning of the new year, 75-year-old Byron Wien again published his annual list of surprises to expect in 2009. Wien, chief investment strategist of Pequot Capital and one of Wall Street’s best known veterans, has been publishing his list of economic, market and political surprises since 1986.

Reviewing Wien’s 2008 list, he got about half of his predictions right.

He foresaw the US entering a recession “as housing starts stay soft and banks are reluctant to lend to anyone where a whiff of risk is apparent”, and the S&P 500 Index declining by 10%. He also correctly predicted the ECB commencing an accommodative monetary policy, Barack Obama’s US election victory and Russian President Dmitry Medvedev becoming more assertive in world affairs.

However, Wien was quite wrong with his prediction of the US dollar strengthening during the first half of 2008 and weakening in the second half. Also, he expected the price of oil to go down to $80 a barrel early in the year and rising to $115 in the second half.

Wien believes his ten surprises have at least a 50% chance of occurring at some point during the year. Although this is not a very high probability, his predictions nevertheless make for stimulating reading. His list for 2009 follows below.

1. The Standard and Poor’s 500 rises to 1,200. In anticipation of a second-half recovery in the US economy, the market improves from a base of investor despondency and hedge fund and mutual fund withdrawals. The mantra changes from “fortunes have been lost” to “fortunes can still be made”. Higher quality corporate bonds, leveraged loans and mortgages lead the way.

2. Gold rises to $1,200 per ounce. Heavy buying by Middle East investors and a worldwide disenchantment with paper currencies drive the price of precious metals higher. In a time of uncertainty, investors want something they can count on as real.

3. The price of oil returns to $80 per barrel. Production disappointments and rising Asian demand create an unfavorable supply/demand balance. Other commodities also rise, some doubling from their 2008 lows. Natural gas goes to $9 per mcf.

4. Low Treasury interest rates coupled with huge borrowing by the Treasury send the US dollar into a serious downward slide. Overseas investors become concerned that the currency printing presses will never stop. The yen goes to 75 and the euro to 1.65.

5. The ten-year US Treasury yield climbs to 4%. Later in the year, as the economy shows signs of recovery, economists and investors shift their mood from concern about deflation to worries about inflation. A weak dollar, rapid growth in money supply and record-setting deficits (over $1 trillion) are behind the change.

6. China’s growth exceeds 7% and its stock market revives. World leaders credit China’s authoritarian government for its thoughtful stimulus policies and effective execution during a challenging period. The Chinese consumer begins to spend more and save less and this shift is behind the unexpected strength in the economy.

7. Falling tax revenues from the financial sector cause New York State to threaten bankruptcy and other states and municipalities follow. The Federal government is forced to step in and provide substantial assistance. The New York Post screams “When will the bailouts stop?”.

8. Housing starts reach bottom ahead of schedule in the fall, and house prices stabilize after dropping 15% from year-end 2008 levels. The Obama stimulus program proves effective and a slow growth recovery begins before year-end. Third and fourth quarter real gross domestic product numbers are positive.

9. The savings rate in the United States fails to improve beyond 3%, as most economists expect. The concept of thrift seems to have vanished from American culture. Peak job insecurity and negative growth drive increased savings early in the year, but spending resumes as the economic growth turns positive in the second half, making Christmas 2009 the best ever.

10. Citing concerns about Iraq’s fragile democratically elected government and the danger of a Taliban-controlled Afghanistan, Barack Obama slows his plan for troop withdrawal in the former and meaningfully increases US military presence in the latter. In a hawkish speech he states that the threat of terrorism forces the United States to maintain a strong military force in this strategic area.

You are your own worst enemy. Retail sales are awful. Banana Republic's windows are filled with huge red Sale signs. I'm at their Third Avenue store and 64th Street store. I ask the salesgirl "How are things?" She says the only action is "returns."

I find a nice pair of $98 leather loafers. They're called Gibsons.

They're not on sale. But I can get 15% off by signing up for a Banana Republic credit card. I do. I'm rejected. I offer cash, less 15%. They reject my offer. Full price or nothing. How stupid is that?

P.S. the Gibsons are very comfortable, and much cheaper than their various look-alikes from Rockport, Mephisto, ColeHaan and others.

Divorce is such a pleasant business. My lawyer friends tell me that divorce is booming. The argument is simple. I married you because you were rich. Now you are no longer rich, you are also grouchy because of the money you've lost. From Newsday comes:

When his wife needed a kidney transplant, Dr. Richard Batista gave her one of his, attorney Dominic Barbara said. Now that Dawnell Batista has filed for a divorce, Richard Batista wants his kidney back as part of his settlement demand. Or, Barbara said Wednesday, his client wants the value of that kidney: An estimated $1.5 million.

Barbara said his client, a 49-year-old doctor from Ronkonkoma who graduated Cornell University Medical School in 1995, married Dawnell Batista on Aug. 31, 1990. The couple had three children, now ages 14, 11 and 8. After she had two failed transplants, Barbara said, his client donated a kidney to his wife in an operation that took place at the University of Minnesota Medical Center on June 18, 2001.

Richard Batista said his marriage at the time was on the rocks because of the strain of his wife's medical issues. "My first priority was to save her life," Batista said at a news conference in Garden City. "The second bonus was to turn the marriage around."

Dawnell Batista, 44, of Massapequa, filed for divorce in July 2005, Barbara said. ...

Medical ethicists agreed that the case is a nonstarter. Asked how likely it would be for the doctor to either get his kidney back or get money for it, Arthur Caplan at the University of Pennsylvania's Center for Bioethics, put it as "somewhere between impossible and completely impossible."

First and foremost, said Robert Veatch, a medical ethicist at Georgetown University's Kennedy Institute of Ethics, "it's illegal for an organ to be exchanged for anything of value." Organs in the United States may not be bought or sold. Donating an organ is a gift and legally "when you give something, you can't get it back," he said.

"It's her kidney now and . . . taking the kidney out would mean she would have to go on dialysis or it would kill her," Veatch said.

Nor can you assign a subsequent monetary value to an organ, Caplan said. "There's nothing later [you can get] in terms of compensation if you regret your gift," he said. What's more, no reputable surgeon would perform such a transplant and no court could compel a person to undergo an operation.

Actual press release I received yesterday: (This stupid release even got mentioned on CNBC.)

The $13 Billion Industry Is In No Fear Of Collapse, But Why Take Chances?

LOS ANGELES, Jan. 7 /PRNewswire/ -- As the 2009 AVN Adult Expo opens in Las Vegas this week, Girls Gone Wild CEO Joe Francis and HUSTLER magazine publisher Larry Flynt are petitioning the newly convened 111th Congress to provide a financial bailout for the adult entertainment industry along the lines of what is being sought by the Big Three automakers, a spokesperson for Francis announced today.

Adult industry leaders Flynt and Francis sent a joint request to Congress asking for $5 billion in federal assistance, "Just to see us through hard times," Francis said. "Congress seems willing to help shore up our nation's most important businesses, we feel we deserve the same consideration. In difficult economic times, Americans turn to entertainment for relief. More and more, the kind of entertainment they turn to is adult entertainment."

But according to Flynt the recession has acted like a national cold shower. "People are too depressed to be sexually active," Flynt says, "This is very unhealthy as a nation. Americans can do without cars and such but they cannot do without sex."

While not to the degree felt by banks and automakers, the Adult Entertainment industry has been hit by the effects of the economic downturn. DVD sales and rentals have decreased by 22 percent in the past year as viewers turn to the internet for adult entertainment. It is estimated that roughly half of all internet users visit adult sites, with the number of unique visitors to adult websites (including GirlsGoneWild.com and Hustler.com) has grown to more than 75 million per month.

But the "saltpeter" effect remains.

"With all this economic misery and people losing all that money, sex is the farthest thing from their mind," Flynt says, "It's time for congress to rejuvenate the sexual appetite of America. The only way they can do this is by supporting the adult industry and doing it quickly."

"The popularity of adult entertainment in America has grown steadily for the past half century," Francis says. "Its emergence into the mainstream of popular culture suggests that the US government should actively support the adult industry's survival and growth, just as it feels the need to support any other industry cherished by the American people."

Favorite latest New Yorker cartoon.

This cartoon is not the sad story it portends. Susan and I went to dinner last Friday at the home of a retired school teacher. He had just built a chicken coop in his backyard, stocked it with $78 of baby chicks (they came by FedEx) and was now enjoying two dozen new fresh eggs a day. And he was having a ball. He promised to name the meanest, grouchiest chicken after me. Meanwhile I Googled "chickens lay eggs" this morning and found this question:

Can I buy a live chicken from the farmers market and just wait for it
to lay an egg. If it does, can I just eat it? How many eggs can a
chicken lay in a day/week/month. How long can an egg be laid, sit in
a non-refrigerated nest, and still be OK to eat? Thanks for helping

You can find all the answers in an article entitled "Raising Chickens." The article ends with a Short Chicken Glossary, the final entry of which is:

egg. If you don't know, you shouldn't be doing this.

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.