It is pathetic out there in the pits of the financial markets.

It is not worth hand wringing over today’s new carnage. All I did today was handle some hedge fund administration and participate in a couple of board calls.

Now I will hang with the family and go for a run.

I felt that Bernanke and Bush remain behind the curve and shorted their speeches. That made me a few shekels, but it’s not even fun doing that.

I received this Fund Letter from a manger that is up 35 plus percent this year:

I am going to do away with all of the clichés about September, as I am sure you have heard them all. The only thing I would say is that, from the beginning of September until this moment, it feels like one long day.

The most tragic part of this whole situation is that it did not have to be this horrible but for the incompetence of elected and appointed officials. As this crisis mounted, they were way behind the curve and had no adequate planning. By allowing the collapse of Lehman, they choked the patient going into cardiac arrest instead of performing CPR. It is painfully obvious that the Fed needs to take the extra step of guaranteeing the banks’ obligations to each other. However, the Fed continues to shy away from doing just that. In the context of the prior ineptitude, each subsequent measure appears to be a desperate action of cornered men.

I think the effects of what happened in September will be felt for the next decade and probably beyond. It will cause not just investment professionals, but also the general American consumer, to change many aspects of how they do business. Saving rates have to rise; consumer credit has to shrink; and consumption has to decrease. The ensuing contraction of Wall Street’s and Main Street’s balance sheets will have a major effect on the economy overall, as they will compound an unfavorable economic climate.

Although everyone seems to be fixated on the credit crunch, the bigger problem is going to be the recession that will ensue. Underneath the wealth destruction and credit reduction lies a global economic slowdown. Domestic consumption and production have declined. A number of the G7 countries are teetering on the cusp of recession. When considered in concert with the global deleveraging, this economic downturn will likely produce calamitous results.

That’s pretty bleak, but on point. It does not mean stocks won’t bottom tonight and shoot up, but you need to understand the signs and the landscape ahead of us.

I won’t go down with the ship because I need to stay focused on opportunities. Opportunities come from having capital and a clear head.

This market is really too hard to call and so you must stay small.