“We’re clearly on the edge, it’s 50% or better,” said Alan Greenspan on Thursday, referring to the chance that the United States will fall into a recession. Six months ago the former Fed Chairman put the odds at no more than one in three. I think we are already in a recession.

We could say the same thing about the stock markets. All this debate about whether we have entered into a bear market is pointless. Stocks are going down and I believe they will continue to do so. That’s all I need to know. This week we saw another round trip in the markets. The averages moved higher based on some bogus bail-out news concerning Warren Buffet’s offer to re-insure the bank insurers. That carried the market for a day or two before some more bad news ignited a round of profit-taking. Investors and money managers alike were heading for cash the end of the week. Who could blame them?

In testimony before the Senate banking Committee, Treasury Secretary Paulson and the Fed’s Ben Bernanke studiously avoided the “R” word. That was no surprise given that it is, after all, an election year and neither wants to give the Democrats any more ammunition. Yet, both officials mumbled under their breath about slower economic growth and, cough, cough, more bad news coming from the financial sector.

Then there is the problem in the auction rate debt markets which is beginning to impact municipal money market funds for high net worth individuals and institutions. Who cares about a bunch of rich guys, right? Maybe, maybe not, investors are worried it might be the tip of an iceberg that could sink the whole tax-exempt money market as well.

New York’s Governor Spitzer didn’t help any when he threatened bond insurers with a 3-5 day deadline to raise additional capital or else. And if that were not enough, Citibank, one of America’s largest, has barred investors from withdrawing their money from one of its hedge funds.

As a result, volatility reigns on Wall Street and I’ve kept the aspirin bottle close at hand. However, I have noticed some interesting moves to the upside this week. Natural gas, for one, seems to be breaking out to new highs as is palladium, while gold and silver seem to be holding their own through these tumultuous times.

Several clients have called to ask if it wasn’t time for a bit of “bottom-fishing.” It is a term Wall Street uses for buying down -and -out stocks at cheap prices. “Sure, go ahead,” I said, if your time horizon is longer than the next few months but don’t put all your money to work quite yet. There will be plenty of opportunity as the market continues downward to catch an entire school of big fish, especially among the financials.