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9:00 AM EST, Thursday, September 4, 2008: Cash is King. A friend calls me. He's found the ideal business. Only $750,000 for a business that throws off $450,000 a year pre-tax. He's found his perfect investment. Only one problem. He doesn't have the cash to buy it; the seller will only take back a $100,000 note and no bank will lend the rest. Will I lend him the money? He'll give me a second mortgage on his house? I explain I have three problems with this loan:

1. I have no idea what his house could fetch -- no one does -- if I had to sell it.
2. I'm leery of all the legal work and expenses necessary to get this hot "deal" sealed.
3. I hate the thought of throwing my dear friend out in the street.

Fact is he's making the right decision. He's spent the last year doing nothing but looking for his own business. He's checked out hundreds of businesses for sale -- through brokers, ads, etc. This is HIS business. He's figured ways to double the sales.

Today, your own business makes so much more sense than fiddling with stocks, bonds, real estate, etc. With your own business you can sell harder, cut expenses, delay payments to suppliers, beg for pre-payments from customers. With passive stockmarket investments you're at the mercy of irrational forces. (See below.)

But he doesn't have the cash to make his dream come true.

I can smell the outcome. He's going to do something stupid. He's going to sell his house, move into a tiny rented apartment and work his tushy off in the new business. But there's a "gotcha" somewhere in this great deal. The profits won't be $450,000. ... You can figure the rest.

In the next year, there will be bargains for all of us. They will be The Bargains of the Century. But no one will lend you the money. There's a Credit Crunch. You need the cash. Hence, my old mantra, "Cash is King."

This is why it's so difficult: Bucyrus makes the heavy equipment miners use. It's really good equipment. The shares have been the darling of the commodities boom. There was a two for one split three months ago. Management raised earnings guidance by 11% in July. But, its key competitor, Joy Global, announced a drop in margins at its surface machinery unit. Nothing here a calamity. But the present stockmarket is sketchy and bingo, it erases months and months of gains.

Would I buy these stocks at these prices? No. I suspect they'll fall even further.

I recently spoke with my friend, the big Australian nickel, zinc and gold miner. He believes that commodity prices will recover -- but only after many marginally-profitable mines are closed and plans for new mines shelved. This is happening now. It's not good for makers of mining equipment, like Bucyrus and Joy Global.

Financial stocks to short: There'll be more big writeoffs and big losses. I have my fears about Merrill Lynch, Bank of America, Citigroup and Wachovia.

Medical bills you shouldn't pay. From BusinessWeek:

As health-care costs continue to soar, millions of confused consumers are paying medical bills they don’t actually owe. Typically this occurs when an insurance plan covers less than what a doctor, hospital, or lab service wants to be paid. The health-care provider demands the balance from the patient. Uncertain and fearing the calls of a debt collector, the patient pays up. Most consumers don’t realize it, but this common practice, known as balance billing, often is illegal. When doctors or hospitals think an insurer has reimbursed too little, state and federal laws generally bar the medical providers from pressuring patients to pay the difference. Instead, doctors and hospitals should be wrangling directly with insurers. Economists and patient advocates estimate that consumers pay $1 billion or more a year for which they’re not responsible.

Another virus. In fact five of them this morning. I have no idea where these came from. I didn't open a bad email attachment. Only lessons:

1. Keep your virus definitions up to date. Do this manually once a week. Run your virus checker manually once a week.

2. Learn how to take your main hard disk out and run it as a external hard drive. That way, you can physically erase bad files which your virus checker sometimes can't.

I speak for ultra-boring experience. Macs don't have viruses.

More good tennis to watch. This is the last weekend.