We had staked out a short position in Citigroup on Thursday's close, selling March 20 calls naked for almost two bucks apiece, but the stock, aided by short covering, swam against the tide on Friday and finished with a mere 17-cent loss. So much for Friday Follies. By tradition, the stock market is supposed to act a little crazier than usual on Fridays, but all we saw was the same old teeter-totter action between nervous bears and complacent bulls. The bulls lost in the end ' the Dow finished off 147 points ' but it could have been worse, since the blue chip average was down as much as 220 points with just an hour remaining in the session. A report that non-farm payrolls had fallen by 63,000 workers didn't help, especially since an unchanged picture had been expected, but there have been days when such news might have caused stocks to go into a tailspin. The fact that investors took the report more or less in stride suggests they may be coming inured to talk of recession. Unlike TV pundits, news anchors and economists who continue to speculate on whether recession is imminent, just about everyone else seems to understand that we've been in one for months. Looking on the bright side, albeit superficially, we would hazard a prediction that inflation won't be much of a problem eight to ten months from now. The bad news is that it will be because deflation has taken its place. We recently had an exchange of e-mails with hardcore inflationist Eric Janszen of iTulip.com, who sees this as most unlikely. Eric believes stagflation lies ahead, but we have already explained why that would be a relative fairy-tale scenario compared with the full-blown wage-price-asset deflation that is coming. Another point of disagreement concerns
LATEST TRADES
