And people who think they’re laying rail.

Sigh. I tried. Really, I did.

But there was just too much idiocracy to allow the publishing of the first two articles I wrote this week. Originally, they were optimistic, forgiving, and light-hearted. Then I turned on the television.

And started laughing. A frustration-driven, maniacal laughter that rivals that of the Joker from Batman. And not Heath Ledger’s Joker, I’m talking the original – Jack Nicholson style.

Why?

Because I love watching fat cats sweating through their $3,000 suits, all but hyperventilating under the bright lights and cameras surrounding them, as even they struggle to believe the garbage spewing from their collective mouths.

A colleague of mine, Tony Daltorio, blasted CNBC analysts (and guests) en masse in a recent article, and I would like to publicly thank him for saving me the trouble of doing the same. A couple of months ago I proclaimed, “If you want to know about the financial strength of a company, don’t ask the CEO.” There’s been a lot of this going on lately, and everyone with something to gain (or, more accurately, lose) has been speaking in circles and/or telling us things we already know.

Safe talk instead of straight talk

My what a difference a week makes. Merrill has taken a light sentence (punished mainly by revoking its dignity) while Lehman got the chair. With AIG’s one phone call, it called the Fed. And asked for a pardon. To the tune of roughly $85 billion.

That’s a big pardon. You can’t bail out AIG with a couple of food stamps and a gas card, but it had to be done. A collapse in AIG would absolutely destroy confidence in the market, and quite possibly the market itself. When it’s widely known that we’re dealing in rough waters, the CEOs of Captain Obvious, Inc. come out of the woodwork.

Chief market strategist at Jeffries & Co., Art Hogan, stated the other day, “It’s too soon to say nothing bad has happened because of Lehman. We’ll know a lot more in six months than we know right now.” Thanks for that profound analysis, Art. Tomorrow I bet you could tell me what today’s weather is like.

The surest sign of excrement hitting the fan is commentators and “experts” stating the basic observable facts. Or feigning prosperity.

Citigroup’s new CEO Vikram Pandit touted the strength of his firm and sent a memo to all his employees stating, “We are confident about the future despite a very challenging time.”

Let me translate: “Our stock is already down 70% year-over-year. I run a huge financial corporation in a time when they’re being slaughtered like cattle. I am sleeping 45 minutes a night hoping that we don’t get caught in the undertow of this wave. Please don’t sell my stock.”

Last, but certainly not least, President Bush was on television the other day referring to the current financial crisis as “adjustments”. From someone who has failed at every business venture he’s ever undertaken, I can only assume he’s referring to adjusting the noose around the financial sector’s neck, in which case I agree. We know you’re almost done, George, and thanks for mailing that one in.

As you can tell, few things excite me like extreme pessimism. Why? Follow along.

Buy low, sell high. Buy lower, make more money.

In an article I posted two weeks ago, I warned my readers that, for lack of a better phrase, s*** was going to get real.

And it did.

Each day the market drops, my grin gets a little wider. And so does my future wallet as stocks get cheaper and cheaper. Closer to this fabled “bottom” that we so feverishly desire.

Here’s a sign: My mom called me yesterday to talk about AIG. My mom is a retired special education teacher who not only is ignorant to the financial markets, but is lucky to remember her own pin number to her debit card. When she is opening her mouth, then I know the pessimism is widespread and likely near its peak.

So what I’m going to propose is the same strategy I proposed with oil. Pure and simple: don’t wait for the bottom to buy, because you’ll be looking at it in the rear-view mirror. With each bank that fails, with each analyst who says we “should have seen this coming” or “we’ll know next time”, and with every candid photograph of floor traders running their fingers through what’s left of their hair in exasperation, I pick up just a little bit of stock. Not for tomorrow or the next day, but for the next few months and years.

Since the market goes up over time (and will, eventually, pass last October’s peak), why not buy it at a 25%-30% discount? If it goes lower, good. I’m buying more. We’ll be looking back at this opportunity in a few years and be kicking ourselves if we did nothing. Remember: panic = opportunity.

Oh, and turn off CNBC for a while.

John K. Whitehall
Analyst, Oxbury Research