Mick Weinstein The Week's Best Stock Blogs

It was another volatile week for this deeply traumatized market, with a huge gain on Monday that largely vanished over the following three whiplash sessions. "This is really a market where you can miss a 500 point move in a walk to the water cooler," observed Bespoke Investment Group. Here's how market bloggers are currently making sense of it all:

• Congrats to Krugman

We begin on a positive note - Princeton University's Paul Krugman was named winner of the Nobel Prize in economics on Monday "for his analysis of trade patterns and location of economic activity." It's telling that, aside from his academic work and regular New York Times column, Krugman is a prolific and enthusiastic blogger who has long recognized the format's beauty - the ability to quickly and directly share personal thoughts, link to and comment on others' insight, and update easily. From his blog, entitled 'The Conscience of a Liberal', here's Krugman's straightforward explanation of the work that merited his Nobel.

• Crisis Overview

If you're still wondering what the heck is going on with this whole global financial crisis, here's a terrific, succinct summary from the Freakonomics blog, penned by Doug Diamond and Anil Kashyap.

• Start Lending Already!

Treasury Secretary Paulson did just what he had hoped to avoid on Monday, initiating government purchase of equity stakes in American banks in an effort to assure they'll resume normal lending activity with one another. The unprecedented move was intended to get the domestic financial system back on track - but will it work?

Naked Capitalism: "Treasury operatives have admitted, despite Henry Paulson's protestations to the contrary, that the government can only hope for the best in how the nine banks given a collective $125 billion cash infusion early in the week make use of the loot... In the old days, when bankers and corporate executives had some respect for authority, moral suasion, aka "jawboning" could prove effective. Those days now seem to be a distant memory."

Felix Salmon: "We're in a vicious cycle: No one wants to lend going into a recession whose length and severity is likely to be unprecedented in the postwar era. So that's going to keep credit largely frozen - which in turn will only exacerbate the recession's effect on stock prices. Governments might be able to prevent financial meltdown. But they can't prevent a major economic slump, or its reflection in the Dow."

Rakesh Saxena: "The British and American decisions to purchase stakes in major commercial banks are not, by any means, exercises in financial innovation. In fact, they kick start an economic process which Vladimir Putin consolidated and formalized more than three years ago: state capitalism."

Nick Gogerty: "A little hint to equity traders and investors: Stop watching the equity indexes like the Dow and S&P etc., as they are mere symptoms. Credit stress is the disease, and until you see the commercial paper market flowing again, the equity index fluctuations are just noise looking for a pundit justifier."

To that end, Accrued Interest presents the credit market indicators that really matter, and where you can find updates on their status.

• Time to start buying?

Warren Buffett made a public case Thursday for buying U.S. stocks, as "fears regarding the long-term prosperity of the nation's many sound companies make no sense." Some other opinions on the matter:

James Hamilton: "the recent dramatic drop in stock prices means that equities are more reasonably priced today than they have been at any time in the last decade... Stock prices have fallen much more than a reasonable projection of long-run earning potential, with many stocks offering a dividend yield today that is not far from the coupon yield on bonds."

John Hussman, who accurately predicted this sharp downturn (though, like many value-oriented analysts over the past couple years, not its timing) offers a "[w]ord to the wise - don't accept advice or analysis about this crisis from anyone who failed to anticipate it in the first place. The people warning about Depression now (or even talking about it casually on the financial channels) are the same reckless jackasses who told investors that stocks were cheap and "resilient" at the highs... Relative to 30-year Treasury yields, the S&P 500 is priced to deliver the highest excess return since the early 1980's." Here's Hussman's full market commentary for this week - a must-read as always.

Yet Jason Wood warns that valuation alone isn't a catalyst to move markets higher: "As an investor, I'm acutely aware of valuation and its role in investment selection and subsequent performance. But I'm also mindful of how valuation loses significance at times of great velocity... for stocks to turn, and sustain an upward trajectory, it's got to come from improvements [or anticipation of said improvements] in the fundamentals. And right now that's as much about watching the TED spread, the Baltic Dry Shipping Index, and what specific investments (and when) TARP will be undertake."

Before buying anything, recognize that we're in earnings season - yet another source of volatility. Noting that analysts haven't lowered their earnings expectations despite the sharp economic downturn, Barry Ritholtz believes "the analyst community is still way too bullish when it comes to S&P500 earnings consensus... The Street is at $95, and I am at $65... times a 15 multiple means we are actually near fair value. As long as earnings don't fall even below my pessimistic forecast - and multiple compression doesn't rear its angry little head. If that happens, all bets are off."

Alternative energy investor Tom Konrad sees value in 'wise energy use stocks' like those involved in efficient lighting and the electric cars market.

Prudent Speculations presents "Four Great Companies to Invest In During Uncertain Times."

Yield-focused investor Dobromir Stoyanov believes "it is a great time to start or keep investing in dividend stocks." Here are the names he currently likes.

Thoughts on precious metals investing at this stage from Gary Gordon, Tim Iacono and Hard Assets Investor.

Finally, speaking of stock picks, here's the case for suspending Jim Cramer for irresponsible statements on the tube: "He is doing a disservice to the very people he portends to help - the novice investor."