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8:30 AM EST Monday, October 2, 2006: Today is Yom Kippur, the day of atonement and the holiest day of the Jewish calendar.

I apologize for some bad calls -- GM comes to mind. I apologize for some good calls -- InSite Vision comes to mind. By now everyone has figured you read me and everyone else in the investment biz with a super critical eye. Does his logic make sense? Does he have an agenda?

The biggest agenda is deadlines and speed. Think poor Cramer with an hour to fill each day. When I was a magazine publisher, people would ask if they could write a monthly column. I'd say Yes. Start writing. They'd peter out quickly. Most people have three columns in them.

Nando Parrado, 56, is perhaps the best known of the 16 survivors of the crash of an Uruguayan Air Force plane in the Andes Mountains in October 1972. It was carrying his rugby team to a match in Chile. It was he who, with a single companion, trekked through the harsh cordillera with virtually no supplies or protection and eventually guided rescuers back to the crash site to save his friends and teammates. Saturday's New York Times talks about how Parrado, after losing everything, his family, his friends and his future ... came back to life "from the grave" and embraced life with a huge gusto.

34-years later, Parrado explains

“I think life is simpler than we tend to think. We look for answers and more answers. But there are no answers. Things happen in life, good things and bad. People say why did it happen to me? Well, why not? Some people win the lottery, and others die in a car crash. It happens, and there is nothing we can do about it. The universe doesn’t care what happens to you.”

Bond investors are probably right to fear an American slowdown. This is from this weekend's Economist:

WHEN asset classes diverge, investors should take note. Bond yields have fallen sharply in recent weeks, with the ten-year treasury bond yielding 4.53% on September 25th, compared with 5.24% in June. That, and the recent weakness in commodity prices, might seem to indicate an imminent economic downturn.

But investors in shares do not seem overly concerned. The Dow Jones Industrial Average has been flirting with its record high of 11,722, set back in January 2000. The Belgian and Spanish stockmarkets have recently scaled new peaks. And emerging-market bond spreads, a good indicator of investors' attitude to risk, are around their lowest levels of the past 14 years.

The stockmarket bulls feel there is little to worry about. Profits growth has far outstripped share prices in recent years, bringing price/earnings ratios down significantly. And company cashflows are so strong that, according to James Montier of Dresdner Kleinwort, American share buy-backs are adding three percentage points to the dividend yield.

Profits look high as a proportion of GDP, in historical terms, but the bulls feel there is little sign of an imminent reversion to the mean. The global economic outlook may have moved in favour of companies because globalisation has reduced wage pressures.

Indeed, the bulls feel stockmarkets would have been even higher but for investor concern about geopolitical risk, high oil prices and rising interest rates. Now that oil prices have recently dipped below $60 a barrel and American interest rates may have peaked, the markets can put those worries behind them.

Indeed the drop in the oil price may have played the role of the Seventh Cavalry, riding to the rescue. Lower petrol prices may relieve the pressure on American shoppers (as shown by this week's rebound in consumer confidence). In addition, by bringing down headline inflation, central banks will have fewer reasons to tighten monetary policy.

So what are bond investors worrying about? If the recent fall in oil is actually a sign of a slowing global economy, a more apt equine analogy might be a horseman of the Apocalypse. Recent American data, such as last week's survey from the Federal Reserve Bank of Philadelphia, have generally been weaker than expected. Goldman Sachs is expecting third-quarter American output growth to be just 2% (annualised), well below trend.

The big concern is the American housing market. August existing home sales data were a little stronger than expected, but median sales prices are lower than they were a year ago, the first annual decline since April 1995.

Some analysts dismiss housing worries, pointing to Britain and Australia, where a sudden slowdown in house prices prompted a softening, but not a collapse, in household consumption. But David Bowers of Absolute Strategy Research argues that the British and Australian economies benefited from America's strength when they were under pressure. No other economy can give America the same support. In addition, the construction sector is a more important provider of American jobs than its British or Australian equivalents.

A housing-market decline will be a balance-sheet shock for American consumers that might prove the final spur for them to do what some have predicted for years; rebuild their savings. Unfortunately, this hit to demand could coincide with problems elsewhere, with Germany facing a value-added-tax increase in 2007, Japan's recovery faltering a little and the Chinese attempting to slow their investment boom.

This sudden change in the bond market's focus might seem rather strange; after all, only a month or two ago investors were worrying about inflation. And some analysts cling to the view that bond investors are underestimating the inflationary potential and that, after a brief pause, the Fed will be forced to resume raising American interest rates. A slight variation of this argument is that the inflationary pressures will prevent the Fed from being quite as accommodating if the economy turns down.

It is hard to see how both the bond and equity markets can be right. Equity investors seem to assume that the global economy will display the same resilience as it has in recent years; taking that view has been a bet that has paid off since 2003. But the bond markets almost have an each-way bet on a slowdown: “Ashes to ashes, dust to dust, if the Fed doesn't get you, then housing must.”

The forecasting record of bond markets is not perfect: remember the deflation scare of 2003? But given the scale of the decline in yields, and the fickleness of stockmarkets, it would be foolish to bet against the bond market's judgment.

In order words, be wary, be very selective. Hold cash for that rainy day, which may or may not come. But it's hard to tell. I remain cautiously optimistic.

Getting re-elected in November: The BIG Conspiracy theory is that the White House is engineering lower oil prices to get Republicans elected to Congress in next month's elections. Latest theories:

1. Bob Woodward’s new book says that Prince Bandar bin Sultan of Saudi Arabia told President Bush that, “He could ease oil prices” ahead of the election.

2. Goldman Sachs former CEO is now Treasury Secretary. Goldman Sachs changed the weighting on its commodity index, one of the most popular vehicles for betting on raw materials. In July, Goldman Sachs tweaked the index's content by cutting its exposure to gasoline. Investors tracking the index had to adjust their portfolios accordingly -- which sent gasoline futures prices tumbling." Prior to Goldman's revision of the Goldman Sachs Commodity Index in July, unleaded gas accounted for 8.45% (dollar weighting) of the GSCI.

Now unleaded gas is only 2.30%.

This means that commodity funds had to sell 73% of their gasoline futures to conform to the reformulated GSCI.

It wasn't only commodity funds that were forced to sell. Goldman's decision to lower the weighting of unleaded gasoline in its commodity index and NOT to roll any portion of the GSCI attributable to New York Harbor unleaded gasoline created problems for arbitrageurs and commercial traders as well. Here is the Goldman press release:

"On July 12, 2006 Goldman, Sachs & Co. announced that, for the roll occurring in September 2006 (the September Roll) in relation to the Goldman Sachs Commodity Index (GSCI) futures contract expiring in October 2006, it would roll the existing portion of the GSCI that is attributable to the Reformulated Gasoline Blendstock for Oxygen Blending (RB) futures contract on the New York Mercantile Exchange but would not roll any portion of the GSCI that is attributable to the New York Harbor Unleaded Gasoline contract (HU) contract into the RB contract."

Goldman's changes probably induced arbs, commercial hedgers, and other traders to sell September and October unleaded gasoline future contracts to avoid possible (settlement, delivery, etc.) problems. September futures expired in August; October contracts expired September 29. Hence, unleaded gasoline prices collapsed in August and September.

Is all this true? I'm doing more checking today.

What will happen today in shul
Moskowitz had bought a parrot and one morning found the bird at the eastern side of the cage, with a small prayer shawl over its head, rocking to and fro, and mumbling. Bending low to listen, Moskowitz was thunderstruck to discover the parrot was intoning prayers in the finest Hebrew.

"You're Jewish?" asked Moskowitz.

"Not only Jewish," said the parrot, "but Orthodox. So will you take me to the synagogue on Rosh Hashanah?"

So he takes the parrot.

Moskowitz said "Can I tell my friends about you? This isn't a secret is it?"

"No secret at all. Tell anyone you want to." And the parrot returned to his praying.

Moskowitz went to all his friends to tell them about his Jewish parrot. Of course no one believed him, and in no time at all Moskowitz was taking bets. By Rosh Hashanah he had $1,000 in bets riding on the parrot.

Grinning, Moskowitz brought the parrot to the synagogue in its cage. He put him in a prominent place and everyone turned to watch the parrot do his prayers. Even the rabbi watched, as he had $7 that said the parrot would not pray.

Moskowitz waited. Everyone waited. The parrot did not pray.

Moskowitz put the prayer shawl over the parrot's head, but the bird ducked and shawl fell off. After the services all of Moskowitz's friends laughed, and collected their money.

Utterly humiliated, Moskowitz returned home, turned viciously on the bird, screaming, "Prepare to die you little monster, for I'm going to wring your neck! If you can pray, now's the time!"

The parrot's voice rang out clear, "Hold it, you idiot. Today is Yom Kippur, when all the Jews will sing the tragic, haunting Kol Nidre. Why don't you bet everyone that I can sing Kol Nidre."

"Why? You didn't do anything on Rosh Hashanah!"

"Exactly," replied the bird. "Think of the odds you'll get today!"

What goes on around the High Holidays
A nice Jewish girl brings home her fiancé to meet her parents. After dinner, her mother tells her father to find out about the young man. He invites the fiancé to his study for schnapps.

"So what are your plans?" the father asks the fiancé.

"I am a Torah scholar," he replies.

"A Torah scholar." The father says. "Admirable, but what will you do to provide a nice house for my daughter to live in, as she's accustomed to?"

"I will study," the young man replies, "and God will provide for us."

"And how will you buy her a beautiful engagement ring, such as she deserves?" asks the father.

"I will concentrate on my studies," the young man replies, "God will provide for us."

"And children?" asks the father. "How will you support children?"

"Don't worry, sir, God will provide," replies the fiancé.

The conversation proceeds like this, and each time the father questions, the fiancé insists that God will provide.

Later, the mother asks, "So, how did it go?"

The father answers, "He has no job and no plans, but the good news is he thinks I'm God."

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. Thus I cannot endorse any, though some look mighty 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 Claire's law school tuition. Read more about Google AdSense, click here and here.
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