The Market Remains Split
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.
FOX BUSINESS NETWORK…IT HAS ARRIVED!
Running off at the mouth!
Fred Thompson…aka “The Valium.” Why is this man running? I have never seen
a candidate so disengaged in a debate. As a Republican, I am less than thrilled
at this juncture.
Major banks are looking at setting up a roughly $80-100 billion fund to buy
ailing mortgage securities and other assets. Why? Because these major banks have
been committing fraud by pricing these mortgage securities at whatever price
suited them. This is just another case of the inmates continuing to run the
asylum. Who the hell is watching all this? Oh yeah…Treasury Secretary Paulson.
Where did he come from? Goldman Sachs. These wonderful people are saying they
are looking into this in order to prevent a credit crunch that could possibly
hurt the economy. Nope…in this man’s opinion, they are just trying to cover up
all the fraud that was committed. This potential move simply tells us there
isn’t any market for these securities. I wish I could price the assets in my
fund any way I wanted.
I am not done.
Treasury Secretary Henry M. Paulson Jr. announced an initiative that would
boost financial companies’ efforts to help an estimated 2 million homeowners
whose introductory mortgages with low rates are resetting at much higher rates,
just as the housing industry suffers through its steepest downturn in 16 years.
The initiative is dubbed HOPE NOW. So…who will be a part of this initiative?
Yup…the same lenders that ripped people off with their shoddy and criminal
lending.
Why do I continue to mention all this? After all, the markets are reacting
well to all this “here I come to save the day” talk. It is simple. If you do not
punish the criminals…if you do not make them pay a stiff price…if you do not
let them go out of business…these same slimebags will continue to take
inordinate amounts of risk…these morons will continue to lend badly…and
ultimately, we are all going to pay the piper. The Fed, no doubt, saved these
people. Their accounts were being destroyed. I just hope I am short the market
the day the market shoots the middle finger at all this nonsense. The playing
field is not level right now…and no one seems to care….because the people
who should care are a part of the problem.
Comedy of the week…this a quote from our Treasury Secretary…”A strong
dollar is in the best interest of the U.S.”
OK…no more picking on Paulson. How about Angelo Mozilo…CEO of Countrywide
Financial. Finally, someone is paying attention.
“The U.S. Securities and Exchange Commission has been asked to investigate
stock sales made by Angelo Mozilo, chief executive of the mortgage lender
Countrywide Financial, in the months before its shares plummeted in the
deepening mortgage crisis. In a letter Monday to the SEC chairman, Christopher
Cox, the state treasurer of North Carolina, Richard Moore, questioned changes
that Mozilo had made to his arranged stock selling program, adjustments that
allowed him to increase his sales of Countrywide shares significantly. After
starting a plan in October 2006, Mozilo twice raised the number of shares that
could be sold: once in December 2006, when Countrywide stock was $40.50, and
again in February, when it hit a high of $45.03.”
As you know, I have been yelping about the fact that this man has cashed out
of at least $130 million in the past year…and in another case of a CEO showing
a complete lack of confidence in his own company, “the tanned one” just unloaded
another 699,000 shares in the past week…RIGHT AT THE LOWS. Gee…let’s go buy
that stock!
The market had a vicious high volume, negative reversal on Thursday…but so
far market couldn’t care. I don’t think anything has changed. It remains a very
split tape with only 50% of stocks working…with the good getting gooder and
the bad getting badder. At the risk of sounding repetitive:
I would continue to overweight…but on pullbacks right now because I am
seeing some overheating in:
China, Hong Kong, Brazil, India, Oils, Commodities, Gold/Silver, Shippers,
Fertilzers, Gaming and a slew of growth names mentioned in previous reports. I
do make note that names like AAPL, RIMM, BIDU and other high octane names were
the main victims in Thursday’s drop…and will need to be watched. I was quite
surprised that Friday’s action completely ignored Thursday’s reversal. Again, I
would also stay with large cap as small and mid-cap continue to underperform.
This has been going on for months.
I would continue to avoid:
Most Retail, most Transports, Housing, Lending, most Brokers, Banks, S&Ls,
most Restaurants, Hotels/Motels, most Semiconductors.
Gary Kaltbaum