The bears got the upper-hand again in early 2008. They were fueled by the constant barrage of bad news disseminated daily in reference to the financial losses that banks and other financial institutions throughout the world were enduring.

From my own personal perspective - reading the financial news for the past thirty years - it seemed almost surrealistic to see the daily confessionals by financial institutions as to how many billions each one lost as a result of the mortgage meltdown in the United States.

The Federal Reserve (Fed) in what seemed like a panic reaction to the decline of the world's stock markets on January 23rd, lowered short- term interest rates by 3/4%.

The Feds' action on this day was certainly an anomaly as it was one week before its regular scheduled meeting on January 30th.

The bulls were emboldened by the Feds' action at this unscheduled meeting, and as

such, most major stock market indexes rallied significantly that day.

This rally in late January, however, was short-lived and most stocks went into a free-fall in early February, even though the Fed lowered short-term interest rates again on January 30th at its regular scheduled meeting.

The financial pain of the credit crisis triggered by the mortgage and real estate fiasco in the United States had its tentacles spread throughout the world.

Many banks and financial institutions worldwide had feasted on the zombie debt backed by the non-performing mortgages in the United States.

The losses disclosed by these financial institutions fueled a severe decline in the first quarter of 2008 in many of the worldwide stock market bourses.

The first quarter of 2008 ended with most major stock market indexes in the United States and the rest of the world near "Bear

Market" territory (20% decline).

Exacerbating this financial meltdown worldwide was the price of crude oil reaching $110 a barrel and gold breaching $1,000 an ounce by the end of March.

Bond yields for U.S. Treasury bonds declined significantly in early 2008, in lockstep with the Feds continuing to lower short-term interest rates.

Yields on corporate bonds however increased significantly during the first quarter. Bond investors priced in the potential for defaults ahead, if the U.S. economy continues to sink into a severe recession.

I remain committed to ETFs that are commodity-based (oil, gold and grains) as the core holdings for the portfolios that I manage on behalf of my clients.

The risk of equity-based securities is outweighed at this time by the continuing deterioration of the U.S. and global economies, with no end in sight.