NEW YORK, NY - Back in March, I asked whether investors were prepared to get to the bottom of Wall Street's Pandora's box. The response that I received from most readers in the US was that of outrage. They were appalled that I would suggest that the problems
were so bad that in the end we'd wished that the lid had been kept on. I think their response was part patriotism (or in this case maybe nationalism) and
part confidence that our system was just about beyond reproach. The European readers on the other hand, all
agreed that I was on to something. Maybe they were being cynical
in suggesting that the US market wasn't perfect and that Americans, used to winning and being on top, wouldn't be able to handle the truth. Well folks, the truth has been harder to handle than anyone thought it would be, and that patriotic fervor has become
rebellious anger.

Last week felt as if every investor climbed on their window ledges and screamed (all facing east to project their collective voices to Wall Street) I'm mad as hell, and I'm not going to take it any more!!!! (By the way, that wasn't confetti flowing in the air, those were worthless stock certificates.)

The big question over the weekend is: when does it stop? This question can be applied to several areas of our lives, including the stock market. In fact, I think it must be answered from the
point of view of corporate scandals and wrong doings. At this point of the stock market meltdown, there is no doubt that the driving force is the continuing stream of scandals. However,
one has to wonder what constitutes a scandal. These days it just looks like any misstep by corporate America is/was a deliberate attempt to cover something up.

Here is the definition according to dictionary.com:
scandal (sk n dl) n.
1. A publicized incident that brings about disgrace or offends
the moral sensibilities of society: a drug scandal that forced
the mayor's resignation.
2. A person, thing, or circumstance that causes or ought to cause
disgrace or outrage: a politician whose dishonesty is a scandal;
considered the housing shortage a scandal.
3. Damage to reputation or character caused by public disclosure
of immoralor grossly improper behavior; disgrace.
4. Talk that is damaging to one's character; malicious gossip.

As we can see, technically all of the headline news seen is indeed a scandal. However, I think investors are going to have to learn to separate malicious intent from stupidity and error.
Of course that may not happen until all of corporate America comes clean. Therein lies the problem with the executive branch of our government. While Bush's Harken situation was old news, his handling of the events has been terrible. (In fact, the more he
tries to sweep it under the rug, the greater the curiosity and doubt. It doesn't help that his father appointed the SEC head that oversaw the investigation.) Worse has been his handling of the Cheney situation. It smacks of unnecessary protest for him
to come out and proclaim his vice president's innocence. Loyalty
is commendable, but not when it challenges the sensibilities of
the entire nation. One day he's tough on white-collar crime (I think?) and the next he's sounding like the Bruce Cutler of the beltway. (By the way, this is an interesting aside, but I'll
give you one guess as to who the person is in the first meaning of the word "scandal". One hint: he was in the business of government.)

SAY IT AINT SO, JO JO
The biggest disappointment of the week was reserved for the company that arguably is the most trusted in the country. Johnson and Johnson (JNJ) came under scrutiny Friday, for accounting fraud at the company's Puerto Rico plant. This plant makes Eprex, and
though the product only represents a fraction of the overall revenue at the company, it is reasonable for investors to wonder if the allegations are factual this is only the tip of the iceberg.

So now shareholders in JNJ and other pharmaceutical companies have
to ask themselves 'when does it stop'? Save for Kraft, I can't think of a company that has products in every single US household.

Folks, you said bring it on, well now you have it.
Guess what?
It may get deeper.

I've preached that everyone should have puts and/or shorts at all times during this collapse. It is too early to say that now everyone should have calls or longs on weakness now, but there will be substantial upside opportunities. There are so many things that
are going to have to happen before we can stop asking "when does it stop"?
But it will.