Other People’s Money
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.
Citigroup bailed out, AIG taken over, FNM/FRE taken over, auto companies bailed out, the fed drops rates to zero, the fed buys the heck out of treasuries to force mortgage rates down, the FDIC now backing bonds of companies like Deere, money market funds guaranteed, Goldman and others change into banks in order to get bucks and of course we can work our way backwards where our government backed the deals of WFC/WB, BAC/CFC, JPM/BSC,BAC/MER and JPM/WAMU.
Am I missing anything? Oh yeah…TARPS, SIVS, another trillion out of Obama…yup…spin the wheel and see what you get. You already know what I think by my writings, my radio show and my TV appearances on Fox. This is insanity run amok…and being run amok by people who have been 100% wrong since the beginning, enabled the problem since the beginning and now the guilty are supposed to be curing the problem started by massive leverage and easy money…with massive leverage and easy money.
These people are good at one thing…and one thing only…USING OTHER PEOPLE’S MONEY…and instead of raising the money themselves, they are now just using the government piggy bank – aka the taxpayer. I don’t know what else to say as we are seeing so-called capitalists turn into socialists in a matter of months.
Now when it comes to GM and Chrysler, just connect the dots. A certain company named Cerberus owns a bunch of GMAC and Chrysler. Cerberus is run by John Snow and Mr. Potato head Dan Quayle. Is this hard to figure out why Mr. Free Market himself…George Bush…gave them the money? Speaking of the soon-to-be ex-president…did he really say: “I’ve abandoned free market principles to save the free market system!” This is the dude who has been running the show?
As far as the market, I am reminded of a shirt that says,”The economy has received $7 trillion and all I got was this stinking tee shirt!” Actually, the tee shirt is a measly rally off the lows. Yes…measly. When you drop 50% and rally 20%, you are still down 40%. But actually, markets are acting okay here…as they trace out a 10 week trading range…that continues to hold. So let me be clear…as long as the DOW holds 8100 and the S&P holds 815, we are fine. A break below and see ya.
I would like to say a lot more but we are now headed into holiday time where things slow up – but the good news is that the bias is usually to the upside. Since I gave you the downside numbers to watch, I think it is important to give you near term upside numbers also – 9026 DOW and 919 S&P. You may also add 1590 NASDAQ to that equation. A move above gives the market a chance for a further leg up…and since markets have built a decent base for 10 weeks, there is now a better chance.
But it is important you recognize that there is still one ingredient missing for me. Yes…crashed stuff is coming up off the lows…but I have never seen a sustained move up without what I call monster leadership. After 10 weeks, there is still not one stock in the market that has moved out to new highs and powered higher for significant gains. New bull markets always have monster stocks to carry the day. Maybe the damage was so bad that this will have to take time. After all, the 2002-2003 low took 5 months. So…I am patient but I am ready. After not participating in this nausea all the way down, I am now tiptoeing in and will add if resistance levels get taken out. Of course, I have my finger on the trigger just in case.
Next week, my annual critique of my calls this year as well as my annual words of wisdom. Enjoy the holidays!
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