As I've said many times before, I think 2009's arrival will mark an important psychological reason for stocks to be bought. I'd like to take advantage of that phenomenon, thus I have switched my ES position from short (covered profitably @ 867) to long (same price point). OIH's good performance thus far gives me some reassurance that the markets have been beaten to the point that sellers, for now, are exhausted. I have also closed out my positions in FXP, SRS, and GG (first two long; last one short).

Energies have been absolutely beaten to pieces, but I think OIH is forming a pretty good inverted head and shoulders on its intraday chart; I am buying calls with a contingent stop at 66.01.

I'm also buying DIG in my IRA account with a stop at 22.64.

I have no idea why, but I feel like talking about politics. Not election politics, though – – we're long past that. I'm referring more to ideological politics, because to my way of thinking, that is inextricably linked to the world of finance where Slopers live.

During my teenage years, I thought about business and politics more than most of my peers (had there been blogging back in those days, maybe I would have even done it back then, too……..like KnightIsRight.com or something).  Because I had been raised in a middle-class, white-collar, rabidly anti-union household, the Republican seed was deeply planted. I was taught that people on welfare were bums, hard work led to success, and if you wanted something done wrong, let the government do it.

Thus, as a college student, my politics would have made Scrooge look like a soft touch. I had a laissez-faire, every-man-for-himself philosophy. If you told me old people were roaming the streets without food, my conclusion probably would have been that they should have prepared themselves better, and it was immoral to burden hard-working souls in order to subsidize the shiftless bums leeching off the rest of us. I don't take pride in my feelings from those days, but I don't deny them either.

That was a long time ago, and a couple of decades will change a person. Most of us have heard the old saw that "those who are young and conservative have no heart, and those who are old and liberal have no brain." I guess I've got it doubly-wrong then, because I was a curmudgeonly, selfish, and conservative as a young man, and now that I'm middle-aged, my politics keep getting pushed to the left.

What has driven most of the change, I suspect, is the observation of grotesque, wanton greed of my fellow Earthlings. That is not to say all the ultra-rich are bad. I believe that people like Bill Gates, Warren Buffett, and Ingvar Kamprad (the founder of Ikea) represent what I have always considered the best result of capitalism……….the amassing of great wealth, using it to make a meaningful, positive difference in the world. Even in my young days, I truly believed that large-scale philanthropy was the ultimate success story in life.

But these fine examples tend to be the minority. Many others represent the worst manifestation of wealth. Paris Hilton (although on a relative scale, her fortune is just rounding-error compared to Warren Buffett's) embodies the kind of perversion of wealth distribution that I loathe. Vapid. Showy. Mindless. And constantly desperate for attention. The nation's worship of individuals like this, who have found themselves wallowing in riches merely through an accident of birth, speaks volumes about our country.

The destruction of $10 trillion of wealth in the U.S. alone during 2008 marks the beginning of a new attitude about wealth. The pendulum has rapidly begun to swing. The pendulum had reached one extreme where ostentatious displays of wealth – – – be it real or fictitious (think Bernie Madoff) – – were the norms of the day. But after all the Enrons, Worldcoms, Madoffs, AIGs, Bear Stearns, Spitzers, Yahoos, and countless other disappointments and frauds weighing like a millstone around the necks of the investing public, populations in general will regard wealth with suspicion as opposed to admiration.

This isn't something I crave, because what it's going to mean is higher taxation, greater regulation, and a return to the kind of socialistic and unionized world we saw in the 1930s and 1950s.

The sad part is, it isn't capitalism that brought us to this point, but corruption. I still believe capitalism is the most natural manifestation of human enterprise; everything else is an abomination. But capitalism only works in the long term if it is performed within the rule of law and devoid of government manipulation. All the "yuck" factors we have seen have been spawned from abuse or interference. There should never have been a Fannie Mae. Or Freddie Mac. Or a Bernie Madoff, if regulations had been properly enforced. Or a Detroit bailout if these car makers had been allowed to fail naturally.

So the one common thread consistent from my selfish youth to my somewhat kinder middle-age is a recognition that government overreaching or incompetence is the problem. My fear for the future is that, as so often the case, the cure is going to be worse than the disease. If things go really bad, we may be for some version of the Reign of Terror, as many examples in history have shown us. The masses don't take kindly to ruination.

To any of you actually in front of a screen on this day at this hour – greetings! Trading should be quiet through the end of next week (the start of 2009 notwithstanding), so Slope will probably be pretty mellow until then. Untangling "what's next" hasn't been this challenging in a while, although January 2nd should give us a bit of a peek under the covers. We're all going to have to try to figure this out together, one day at a time.