Another long week ended in the financial markets. This week will be better. How do we know? Simple. The markets will be open for only four days instead of five. So, we have that going for us.

How many ways can you say tumble, plummet, slump, dump, calamity, disaster, fall off a cliff, jump out a window? After a while, frightening headlines no longer surprise, or, for that matter, even register. The further fall of sales, prices, shares, confidence, employment, and the slowdown of the world’s economy in general starts to be taken for granted.

A certain numbness about the whole financial world sets in. Inevitably, the feeling of panic wears off. After all, crisis mode is an adrenaline rush that simply cannot be sustained. And, for the survival of our species, that is certainly for the best.

Because we need to be calm here. We need to go over some things. Calmly.

So take a deep breath. Relax. Imagine you’re at a beach in California. Let your mind’s eye drift out over a sea…can you picture it? What’s that you say? You see waves, and a sailboat?

Well look again, because we’re at Long Beach, California, and we’re looking out over a sea of new automobiles. This salty port is where you find acres of evidence that the U.S. economy is evidently taking a vacation.

“This is one way to look at the economy. And it scares you to death.”- Art Wong, spokesman for the port of Long Beach, California, where Mercedes, Toyota, and Nissan have parked and stored thousands of brand-new, just-off-the-boat automobiles that car dealers have no room for on their already full “sales” lots.

On this subject, Ben Stein, writing in his Sunday New York Times column (Everybody’s Business), “What if a Slowdown is a Never-Ending Story?” opined:

“I understand well the argument against rescuing Detroit, as I have often said. But I also understand that if you have a wayward child who’s hit by a falling tree, you don’t stop to lecture her about her wayward ways. You get her to the hospital right away.”

A closer look at Mr. Stein’s metaphorical wayward child reveals that he is actually speaking of Detroit’s rather long in the tooth car companies, who for nearly four decades have been hit by a veritable forest of falling trees, and seem to have learned nothing about trees, and everything about falling. In short, Stein’s is not a very convincing argument that we should bail out (or in the more PC parlance, ‘rescue’) these Methuselahs of the motorways. It’s not like we have a shortage of cars or anything.

Instead, it might be more instructive to remember the famous words of Frank Borman, then chairman of the now-defunct Eastern Airlines: “Capitalism without bankruptcy is like Christianity without Hell.”

But, putting Satan behind us, what else did we learn this week?

The headlines in Barrons weekend edition typified the financial reporting of this weeks’ parade of disaster following disaster: “Major Damage,” “Extreme Stress,” “Savage stock market slump,” and “Rockier than 1929” were just some of the pithier examples.

Really, what can you say about U.S. equities? The short story is that this week’s new lows mean that we are at a point where all the stock market’s gains of the past ten years have now been wiped out.

Over at the weekend Financial Times, seemingly no punches were pulled. “It’s one car crash after another for the markets right now and the risk of global recession is deepening by the day.” Opined Martin Slaney of GFT Australia. Bryan Taylor of Global Financial Data said that, “You have fear in the market you haven’t had since the 1930s.”

In that same edition of FT, under the heading, “World In Recession,” we find Alan Beatties’ article “Dark days see warnings of far worse yet to come:”

“Any lingering hopes that some parts of the world economy, particularly emerging markets such as China, would remain immune to the crisis were snuffed out. With remarkable speed in the past two months, a worrying but apparently manageable credit crunch has turned into a global financial crisis and a recession across much of the world’s economy. “ Mr. Beattie aptly concluded his litany of woes thusly:

“And to cap it all, as if to set the seal on a week of threats to the world economy, there are pirates seizing huge ships in the Indian Ocean. These are strange and dark days indeed.”

Thomas Donlan, in “Looking for the Last Refuge,” Barrons, Editorial Commentary, 11/24/08, points out that the U.S. Treasury is likely to be borrowing a sum in the neighborhood of $2 trillion in 2009, or about double its 2008 needs. But with monthly Treasury rates at a tiny fraction of a percent, and even 30-years Treasury bonds yielding less than 5%, he concludes:

“Any reasonable investor faced with the current market circumstances must cast a wistful eye at gold. The magical metal is usually the last refuge of fearful people – not Treasury paper paying negligible interest.”

“But current market circumstances include a perplexing lack of faith in gold, which is off nearly a third from its record high, set in March.”

“The message is creepy: If gold is too expensive, what is cheap?”

Creepiness aside, what possible cheering Thanksgiving message can be delivered this week? Well, cheer is where you find it, so let’s give it a shot.

For a start, U.S. stocks rallied in the last hour of trading on Friday, closing up some 6.5% on a possibly well-timed leak. Mr. Obama’s choice for Treasury Secretary is said to be Timothy Geithner, the 47-year old current head of the New York Federal Reserve. (“Geithner Nets 500 Points” was the Wall Street Journal headline on its weekend editorial page). This is at least a sign that stocks are looking for a reason to rally.

Even the NYT's erstwhile conservative David Brooks had praise for Mr. Obama's cabinet picks so far. Writing in the Times under the headline, "Hype aside, Obama starts well," Brooks says: "...(t)he personnel decisions have been superb. The events of the past two weeks should be reassuring to anybody who feared that Obama would veer to the left, or would suffer self-inflicted wounds because of his inexperience."

Although catching a falling knife is generally considered an unsound investment strategy, shares of many solid and sound companies’ stocks have fallen along with their shakier cousins. For the nimble investors who are willing to buy when most are selling, there are lots of companies who will successfully navigate this global downturn. Their shares can be bought cheaply today, and such purchases will pay off in the months and years ahead.

And gold? Gold prices have been meandering around the low $700s for some time, but were strong all day Friday, ending up $50 or so in late trading, a gain of 7.5% for the week. Facing a potential federal deficit in 2009 of $2 trillion (that’s $2 with twelve zeroes behind it, thus: $2,000,000,000,000), we have to say that gold itself has quite a bit of unrealized upward potential.

But remember that there are more important things than money. Which is a blessing, since there seems to be so much less of it these days.

So give thanks this week for family, friends, and faith. Maybe take a week off from watching CNBC or reading financial news at all. And for goodness sake, don’t even think about opening those brokerage statements.

Let's all have a Happy Thanksgiving.

-Richard Smith