Market Crooks Are In The Building
Gary Kaltbaum
is an investment advisor 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
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or call 888.484.8220 ext. 1.
Kudos to Meredith Whitney. She should be voted Wall Street Person of the
Year. I do not say this because I personally know her. I do not say this because
her husband is John Bradshaw Layfield…who is the ex WWE Champion…standing 6
foot 6. ..weighing in at a paltry 270 pounds and uses a finishing maneuver
called the “Clothesline from hell!” I say this because she dared to go against
the norm. As you know, for years, I have written to you about the lackluster
timing and the sheer conflict of interest in the Wall Street analyst community.
I do not think I need to rehash what we all found out during the last bear
market….and that is, analysts will let stocks go down 99% before changing
their ratings. Analysts’ buys versus analysts’ sells are probably 99-1. In fact,
just this past week, I found a couple of downgrades in ABK and MBI after they
had already crashed. Meredith did the opposite. She came out and told the truth.
What a concept? A clear, concise report on the problems at Citigroup. What did
she get for her report? A couple of analysts jumped up and defended
Citigroup…even though Einstein nor Citigroup has a handle on things. What else
did she get for her report? Nasty emails and yes…death threats. Meredith is
being blamed for the drop in Citigroup…as well as the drop in the market that
same day. Let me be clear. First off, to any of you idiots who sent those emails
or threats…my only wish is that you are traced and you are lined up so Mr.
Bradshaw can nail you with his finishing maneuver. More importantly, if you want
to throw blame…how about blaming Citigroup itself? Meredith Whitney caused
nothing. Citigroup is the guilty party. I am a numbskull…and I have been
telling everyone for weeks that there was a problem at Citi. You want a fallguy?
How about Chuck Prince for taking a minute $80 billion in “stuff” and moving it
into another “Enronesque” vehicle none as an SIV. You want a fallguy? How about
the rating’s services that issued AAA ratings on a bunch of unpricable crap. You
want a fallguy? How about the accountants who signed off on this crap? Meredith
Whitney only came out and told you what she believed and frankly…only came out
and told the truth. I want more Meredith Whitneys covering the markets.
Speaking of all these losses. Did you now know that Paulson, Bernanke…et
al…are now nothing more than attorneys for these big financial behemoths? For
months, these people who are supposed to be out in front of this and not
defending it…used the word “CONTAINED” several thousand times to soothe
nerves. That was a big help. There is going to be several hundred class action
lawsuits over the next few months as all the guilty parties will start turning
on each other. Do you think Paulson and Bernanke should be part of those suits?
Watch for all the pension funds going after the ratings services for marking
crap with AAA when they couldnt pass for ZZZ. That’d going to be fun. Watch the
class action attorneys swoop down like vultures filing against every company who
did not fully and fairly disclose these losses.
Lastly, this report has told you for weeks that Citi was a financial ticking
timebomb. Citigroup, over the weekend announced another $8-11 billion in losses.
Didnt these blithering idiots just tell everyone that earnings should be going
back to normal this upcoming quarter? Who the heck is running this popsicle
stand? And does anyone of you think this is just a Chuck Prince or a Stanley
Oneal problem? This goes a lot deeper than one person. I have news for you. This
$8-11 billion is nothing. There is a lot more to come. Hold onto your hats.
Hopefully, you have listened to this report by staying far away from the crooks.
With all the negatives, let’s do a little glass half full:
This market has been hit with:
Plunging RETAIL stocks.
Plunging FINANCIAL STOCKS.
Stalwarts like Merrill, Citi, Wamu and Bankamerica acting like the end of the
world is coming.
Plunging DOLLAR.
Worsening HOUSING market.
Restrictive lending.
Major investigations now starting up against the boys.
All this and the market is up for the year. All this and the market is a
smidge off the highs. All this and the market refuses to break. Yes, it is
bending…and yes, the bearish areas I have outlined for you…are only getting
more bearish. But whatever has been working…continues to work…and until
those areas top, you have to give the “major indices” the benefit of the
doubt…warts and all.
So…nothing has changed. Even with the psychotic volatility we have all been
seeing, the bears and the bulls remain clear cut.
I want you to stay as far away as possible from anything FINANCIAL…which
includes MORTGAGE-related, INSURANCE…especially GUARANTEE and MORTGAGE
INSURANCE, BANKS, S&Ls, LENDERS, REGIONAL BANKS, MONEY CENTER BANKS. Continue to
stay as far away as possible from anything RETAIL, HOUSING, HOTELS, RESTAURANTS,
TRUCKERS, AIRLINES, AIR FREIGHT, I would continue to overweight LARGE CAP over
SMALL CAP. Just continue to compare a chart of the NDX over the RUSSELL 2000.
Now…here is the short list of groups still leading.
OILS…though I have downgraded many names, STEEL…though I have downgraded
names like NUE, X and a couple of others. METALS, GOLD/SILVER…which are now
really getting strong, SOLARS, SHIPPERS…but there also I have seen a couple of
ugly high volume down days, FERTILZERS and lastly, BIG-CAP TECH…but be very
careful. BARRONS had a cover article entitled “TECH IS BACK!” They are wrong.
BIG CAP TECH IS BACK…the bottom like is that while the NASDAQ and NDX continue
to be amazingly strong, the ADVANCE/DECLINE LINE for the NASDAQ is at ALL-TIME
LOWS….not yearly lows…but ALL-TIME LOWS. GOOGLE, APPLE, RIMM, a few others
and now MICROSOFT are getting ALL the money flows…making the indices look much
better than the average stock. This is somewhat 1999ish…and bottom-line, when
they top…if there isn’t rotation back into the ugly areas…then it is party
over.
Gary Kaltbaum