Making It Up As They Go Along
Gary Kaltbaum is an investment adviser with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show “Investors Edge” on over 50 radio stations. Gary is also editor and publisher of “Gary Kaltbaum’s Trendwatch”… a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary’s Daily Market Alerts click here or call 888.484.8220 ext. 1.
I could not think of any better title for this report. I know this is going to sound like I am patting myself on the back…BUT DIDN’T I TELL YOU ALL THIS WAS GOING TO HAPPEN? Seriously, for the past 2 years, I have been telling you to worry.
While I was telling you the housing market was melting down, Hank (U.S. Treasury Secretary Henry “Hank” Paulson) and Ben (Fed Chairman Bernanke) were telling you housing was bottoming.
While I was telling you subprime lending had become criminal, in fact, all lending had become criminal, Hank and Ben were telling you subprime was contained.
While I was telling you the economy was heading south, Hank and Ben were telling you the economy would not be affected.
While I was telling you that financial stocks were going to go further down than anyone could fathom with some going under, Hank and Ben were telling you everything was A-OK! (I did say on national TV that CITI was also going single digits!).
While I was telling you we would enter a bear market, Hank, Ben and the rest of Wall Street were telling you, as usual, not to worry.
While I was telling you the bailout plan was the worst of all plans, Hank and Ben were telling you it was a great plan and must pass…or else.
So…what have we got from Hank and Ben so far? Simple…two people who are “MAKING IT UP AS THEY GO ALONG!” You see, the other question I posed to you was: WHAT HAPPENS WHEN THE MARKETS FIGURE OUT THESE TWO DO NOT HAVE A CLUE?
Well, we are finding it out as they continue to destroy what is left of our free markets. Now…they have help. The Bolsheviks (aka the Bush administration) have given these two carte blanche to do whatever they want. Anything these two say…is the gospel.
Even though these two have been reactive and not proactive. Even though, these two have been wrong 100% of the time…let’s just follow their lead…and now look where we are.
Since the day of the bailout proposal, the DOW is down a measly 3100 points. Yup, that’s their scorecard…3100 DOW points lost. We now have Hank making it up as he goes along as he has now changed the TARP to…whatever!
In fact, I am just going to change my corporation into a bank holding company. While I am doing that, here is the link so you too can also feed at the trough. There is an actual application to cash in. Have fun!
But I am not done. I have more I want to rant about today. I have a torn muscle in my shoulder…so I am in pain. What a better time to rant.
I rant because I hear Alan Greenspan is still being paid tens of thousands of dollars to do one hour speeches telling everyone he is not to blame for anything.
I rant because the auto companies are now lined up for the bucks…and they are going to get it. I have news for all of you. There are plenty of auto companies doing just fine…they are just not companies on our shores.
Any bailout should involve the unions coming to the table and giving up some of the impossible legacy costs that have helped destroy these companies. But I must admit, who negotiated these deals? Yup…the auto companies themselves. Any bailout at this point will only be bailing out the unions.
I rant because according to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system…$5 trillion. Where will they get this money from? Do they think Barbara Eden is going to appear in a puff of smoke out of her bottle to just conjure this money up?
I rant because no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed.
“It’s a mess,” said Eric M. Thorson, the Treasury department’s inspector general, who has been working to oversee the bailout program until the newly created position of special inspector general is filled. “I don’t think anyone understands right now how we’re going to do proper oversight of this thing.”
I rant because GE said the U.S. government agreed to insure as much as $139 billion in debt for lending arm GE CAPITAL, the second time in a month it has turned to the government. Let me repeat the number…$139 billion.
I rant because American Express now has asked to be named a bank holding company…and in a nanosecond, with no checks and balances, the Treasury said okee dokee. Why did American Express do this?
Simple…so that American Express could get their hands on some of the $700 billion…as they can no longer sell credit card receivables and their late payments pick up. What does this mean? You and I are paying the credit card bills of others.
I rant because AIG is now up to $150 billion in giveaways. And let me be clear…AIG is ground zero for all the fraud we have seen. AIG never ever had the capital to back up any of the insurance it sold. Their profits they reported never came to fruition. Just one massive fraud. Indictments anyone? (That long story will be for another day!)
Simply put, the market has had very little chance and will have no chance as mass confusion caused by the so-called geniuses pervades the air. Trust is gone. Credibility is gone. Trust with the accounting. Trust with the system. Trust with the head honchos, top dogs, big cheeses. Trust with Wall Street that has continued to slobber (love that word) away at you with their typical mantras regardless of market conditions.
The Markets are now sitting right on previous bear market support. I do not know if we bounce first or break through. All I know is that I continue to see a massive supply of stock being met with tepid buying…which only means lower prices if nothing changes.
If things change, I will gladly let you know. I would much rather have markets go the other way. I continue to be in 100% cash and one of the few who have lost no money in what is becoming a bear market for the ages.
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