"Dividend yields nosed above 10-year Treasury rates for the first time in 50 years. And the CBOE Volatility index's remaining above 50 from mid-September into December is rather like 40 days and nights of rain. These are the sorts of anomalous manifestations of an epochal de-leveraging that have fouled familiar signals of sentiment, valuation and market rhythm. And they strongly hint that what we're seeing is market-climate change -- not mere weather fluctuation.

It means that playing the reversion to any mean-in valuation, stock-bond relationships etc. -- that covers only the post-1990, or post-'82, period won't be nearly the high-probability bet it used to be. Until we get more hints of capital-market stabilization or an unclenching of extreme risk aversion, the chosen courses of many thoughtful market survivors have been either to shorten the trading time horizon to minutes or days to feed on the familiar darting moves, or dramatically lengthen investment horizons to years by seeking quality on sale and making friends with time."

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