Greenspan’s Mission
As I write this, futures
are down on another gangbuster jobs number.
Of course, the Kerry
campaign will be out today telling you we are in a depression. In fact, I am
watching a Kerry spokesman spinning a comedy act. He is saying everything is
bad…everything stinks. ..job creation has been terrible. They forget 9-11
caused at least a 1-1.5 million job loss and Bush’s economic proposals were
not in place until 18 months into his term. Of course, an increase in your
taxes will fix things.
The market is simply following our script to a
tee…and I am not just talking stocks. The bond market has been crushed as
the 10 year is now sitting at 4.725%.
Let’s add some fuel to the fire today:
C breaks down and below its longer-term 200 day
average. This is the first time it is below this average since the March 2003
low. Many other FINANCIALS are going for the ride.
RETAILERS are gagging. The RTH broke support
yesterday as many names are coming under pressure.
I am willing to say that TECHS may be oversold and
may get a bounce…but I am not playing it.
Now, let me get into a dissertation.
Everyone is asking: Why is the market going
down when everything is so good? Let me be clear. MARKETS HATE RISING RATES.
MARKETS HATE RISING RATES. MARKETS HATE RISING RATES. And the markets as well
as investors have been so used to low rates that this move up is like a George
Foreman left hook to the right cheekbone. May I add that Alan Greenspan is
asleep at the wheel. He is woefully behind the curve right now and needs to
raise short-term rates to calm inflation fears down. I also believe the market
is worried about his statements about there being no inflation. What world is
he living in?
^next^
Butter has doubled.
Heavy cream has doubled.
Cream cheese has doubled.
Eggs doubled.
Darnit, my favorite,
Hostess Twinkies, are going up in price.
Kleenex raised tissue prices.
Hotels and Airlines are raising rates.
Lastly, I think big Al has had his limo driver
pumping the gas too long as I don’t think he has noticed that gas is $3 in
Cal-ee-fornya. (That’s Arnoldspeak.)
My stance has not changed. We are in a vicious
topping process that will pick away at your wallet if you let it. I suspect
the popular indices will ultimately follow the average stock…which has been
absolutely yonked. I gather we will get a bounce soon…but so far, all
bounces have been hit with a bigger bout of selling. Stay on vacation.
Do not forget to watch the FOX NEWS CHANNEL
BUSINESS BLOCK on Saturday from 10 am-12 noon EDT. That’s 5-7 am Hawaii time.
Gary Kaltbaum