Revenge of the Free Markets
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 click here or call 888.484.8220 ext. 1.
I cannot believe how many emails I received just minutes after my appearance on Fox News this past Saturday. Looks like I am not the only one p—ed off. I did not get a chance to say who ultimately had the final vote… and that is the market.
I will simply repeat what I have been telling you for quite a while. You have a market that started at about 60 on the DOW and went all the way to 14,000 because they were free markets. You then rig that same market by telling people you can’t bet against them. Did these idiots forget that with no shorting, you cannnot get short covering rallies? Did these idiots forget how many people hedge by shorting? When you can’t hedge with shorting, you just sell off your longs. You then rig the market by telling people you are bad if you bet on oil going up. You then rig the market by castrating the taxpayer by making them pay for the crappy free market bets that crashed. There is only one outcome when you try to change free markets. They get mad and they sell off. The DOW cratered over 450 points from the time the bailout was voted for. The market is down 1000 points since the proposal and scare tactics. Methinks upon this bailout being signed, every politician who voted for it, was tuned to Fox Business and sweating bullets on every 10 point drop in the Dow. Did you notice Pelosi calling it “The Paulson Bill?” Already disavowing it Miss Pelosi?
I wonder if Hank Paulson promised jobs to all the lemming Congresspeople that voted against their constituent’s wishes for a blatantly unconstitutional bill… because methinks many are toast. Then, maybe just then, we can get some people in Washington that have minds of their own and refuse to bet on one man’s bailout of his buddies. Imagine this. It took almost 2 years to get two satellite radio companies merged… but one week for the greatest money grab in history. The biggest outcome of all this is President Barack Obama.Â
I am speechless that a problem that was caused by too low interest rates, easy money and criminal accounting… is now trying to be fixed with… yup… too low interest rates, easy money and criminal accounting. I expect rate cuts around the globe this week, hundreds of billions more printed by the fed… and more sham accounting proposals to make things look better.
I remain in 100% cash as I have most of this bear market. See what study does for you. I have seen nothing to change that stance as the last ingredient of a bear market that I told you would show, is now at hand… vicious and panicky selloffs. I have no idea how long this lasts or how far it goes but I always believed we would break 10k in order to really suck out the sellers AFTER the market was already down 30%. The only sectors that have held up are now coming in… including the big cap banks that are the survivors, a few housing stocks and whatever was left. Many areas have simply crashed. Have you looked at those COMMODITIES?  The only good news is that it is now an apparent BEAR MARKET as most permabulls are now just starting to shift. Even the guru of bubblevision is now telling you to sell after a 30% drop. This, after bottom calls on every up day. In order to turn a bear market, you first have to convert everyone… so we are getting there. You then have to get calls of the end of the world. We are getting there. You need front covers of every magazine reporting on it… and we are getting there. In fact, most covers are about the next great depression. These covers even passed over the 70s… and headed right to the 30s. I guess we have to thank those wonderful politicians who tried to scare the wits out of everyone for that.
Lastly, when all is said and done, there will be many to blame. I have mentioned most of them in these reports in past weeks. Many videos are filling youtube showing politicians defending Fannie Mae
(
FNM |
Quote |
Chart |
News |
PowerRating) and Freddie Mac
(
FRE |
Quote |
Chart |
News |
PowerRating) throughout the years. But never forget, no matter what, none of this could happen without the massive leverage taken by the Goldmans, Lehmans, Bears, Merrills, Citis and the like. They knew exactly what they were doing and when they found themselves in trouble, they hid and hid and hid the losses until they could not hide them no more. They were protected by government and regulators throughout the process. When they could not hide the losses any more, they run to the bosom of the government like whining babies… using the guise of the “greater good!” And who is there to save them… Uncle Hank. I am now already reading about who Uncle Hank is hiring to manage this $700 billion… just more and more people who worked at places that caused this problem. Unfortunately, it is just a vicious cycle where the bad people keep getting hired and hired over again and again. Imagine a CEO of one of these firms on an earnings conference call stating they did not have to raise more capital and just 7 days later, raising more capital… and that indiscretion is not investigated. Instead, that person gets hired to run his soon-to-be-acquired company upon the merger. TO THIS DAY, NOTHING HAS CHANGED…  Â
Disclaimer: The opinions expressed herein are those of the writer and may not reflect those of Wunderlich Securities, Inc. or any of its affiliates. The information herein has been obtained from sources believed to be reliable, but we can not assure its accuracy or completeness. Neither the information or any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.