The Markets are Too Leveraged
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.
Wow…wow…wow. I am not wowing about the
continued horrid drop in the market. In fact, the last 30 minutes from Monday
were about as gross as I have seen. I am not wowing that as of this writing
(about 6:30 AM), futures are up big. Keep in mind, markets are not just out to
hurt the bulls right now. They are out to hurt the short-sellers…thus the big
gap to the upside. I am wowing about what I am hearing and what I am seeing.
First off, it is never smart to call for
recessions or crashes in the market. Why? They just dont happen very often. I
have always been amazed by the permabears on both markets and the economy
because it is like betting against Tiger Woods or Roger Federer in their
respective sports. But I must tell you, if there is any market that could one
day decide to crash, it is this one. Why am I saying this? MOUTHS…and a whole
lot of mouths. In case you did not know, a gentleman by the name of James Baker
caused the crash of 87. Read up on him. He opened his yapper over the weekend
before the crash in a market that was already teetering.
I wake up this morning to hear:
Hank Paulson state that everything is strong and
everything is fine. How does he know? How does he know where things will be in 6
months? He doesn’t know. He is just pandering to investors and the market like
Hillary Clinton pandering in Selma, Alabama this past weekend.
Fukio of Japan saying that everything is strong
and everything is fine. How does he know? How does he know where things will be
in 6 months?
Greenspan AGAIN opening his mouth…clarifying
for the third time what he meant the first time.
Strategists paraded out telling everyone to be
calm and not to sell. One maniacal host was yelling at the public to “get in
there and start buying.” One strategist said that if the market keeps going
down, it will be good and if it starts to go up, it will be good.
So what is my problem? It is simple. The market
doesn’t care what any of these people think. Yes, the market doesn’t even care
what our Treasury Secretary thinks. What if all these people are wrong? What if
all these people are just selling you a bill of goods in order to keep the
market afloat? What if there is a problem out there that causes the market to go
lower? After all, both Bernanke and Greenspan said there wasn’t a housing
problem…before we all found out there was a problem. Both said subprime
lending was fine…before there was a problem. Both have said housing is
bottoming in the past few months…which it is not. These people could not hit
Mount Everest with a bazooka. The problem is simple. If there is a problem…and
these morons continue to jawbone the market into staying up, eventually, the
pressure in the market will build up so much, that none of us will know what hit
us. These people are making a huge mistake. THEY SHOULD BE LETTING FREE
MARKETS…BE FREE MARKETS. Markets should not be held up, kept up, talked up,
touted up. If there is a bear market out there. Let it occur naturally. You all
know what happens when you boil a pot of water and keep the lid on?
Remember this report. It is predicting nothing
but warning about everything. The people in charge right now are much richer
than I am…graduated from a better school…but in my opinion, should not be
running a fruitstand. They have forgotten what free markets are all about. They
have let the system become ridiculously too leveraged in order for themselves to
make hundreds of millions of dollars. They have been the creators of the problem
and they now want to tell you there isn’t any problem even though potential
problems are staring us right in the face.
Continue to expect ridiculous volatility to test
everyone’s nerves. I am playing this right by the book. The market has some
proving to do…firstly with a strong follow-through day before it is ok to
start wading back in. The market is opening very strong this morning. Just
remember how many reversals there have been over the past few years.
Gary Kaltbaum