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2009-3-15  (Sunday Evening Update)

I’ll be back with PART II of Cramer vs Stewart on Monday night. - gc

2009-3-12  (Thursday Evening Update)

Have a huge weekend.  I’ll be here with new comments sometime on Sunday night. - gc

I’ll see you here Thusday nite. - gc

I will eagerly return to see how markets fared Wednesday nite. - gc

LATE BUYING HELPS DOW INDUSTRIALS CLOSE 32 POINTS HIGHER, REALLY IT DID / PROMOTING CLASS WARFARE: FANNING POPULISM WITH AN OUTCRY OF TAXING THE RICH ONLY ACCELERATES DECLINE OF THE UNITED STATES

Mar 8 (Sunday) – Stocks escaped another 100+ point losing session when some buyers came in late to close out positions (it is obvious that short-sellers who are comfortable pressing their positions day-in & day-out want to reduce risk coming into weekends knowing that a technical rally could occur at any time).  The Industrials closed up 32 points at 6627, although there were more losing stocks than gainers.  Some market averages just barely made it back enough to close with a modest plus, while others like NASDAQ remained mildly negative.  Either way it was a relief considering the market could have easily slid further in the final hour and turned in another mind-breaking 200 point loss.  Unemployment at the national level jumped to a new high of 8.1%.  Despite that news the market opened with a strong rally of over 150 points.... but that evaporated quickly and once again stocks were mired in losses throughout the session until that late buying spree propped them up and trimmed losses.  The commodity trading was mostly higher as GOLD rallied $7 and OIL regained nearly $2 to close back above $45 a barrel.  Given that I’ve been stressing that investors emphasize mining stocks and take some positions in oil service stocks, my views on how to use these markets is starting to bear itself out.  My own portfolio is up slightly despite the stock market being down 20% this year.  I shouldn’t say anything, for fear of jinxing it.  One need not be a technical stock market guru to observe that nearly all indicators point to a severely oversold market condition.  Some of the sentiment indicators actually reflect the kind of negative sentiment that occurs at major bottoms.  The problem here is in the timing, these indicators are not historically able to pinpoint the timing or type of market turn.  They are useful to tell you that the market can turn higher, but that could mean a week, a month or 6 months.  Waiting for 3, 6 or even 9 months for a market turn would not necessarily be a bad thing if the market were truly in a basebuilding pattern of accumulation.  But in an environment of clearly declining prices, 3, 6 & 9 months can be a rather painful experience if one buys in too early. 

The stock market is already down 20% since Obama took office, the worst performance under a new president.  Obama is not the first president to “inherit” (administration’s favorite word) problems but Obama is the first president to blame the prior administration in every sound bite…. and frankly it’s getting old.  Besides, the Bush Tax Cuts did not cause the current financial crisis.  In fact, growth and job creation both picked up after the tax cuts kicked in for 2003.  Cutting taxes on income, capital gains and dividends helped improve the economy.... as it usually does.  Anything said to the contrary is politicalization.  The doophusalia in Washington want you to believe that the Bush Tax Cuts caused this mess because they want to keep your anti-Bush emotional hot button enflamed.  They must do this because when that button cools off; people will start looking closer at the facts to get to the truth as to what enabled the conditions that led to the financial collapse (Barney Frank and company who BLOCKED all efforts by Regulators to rein in Fannie Mae).  And know full well that the slutrag (pronunciation & definition) and the rest of the Liberal media desperately wants a rally, but for different reasons than we do.  They need a rally because they’ve already written articles about how the stimulus plan is already working and they want to continue conning the public that somehow, despite all the anti-business rhetoric coming out of Washington…. they know they can continue to keep a gullible public into believing that a stock market rally means an embrace of Obama and his plans.  Trust me; any rally now is the function of one thing and one thing only…. THE TEMPORARY EXHAUSTION OF SELLING.  Those of you who’ve been around markets for any length of time know EXACTLY what I’m talking about.  The link to the AAII chart (below) shows the AAII (American Association of Independent Investors) weekly sentiment survey.  The 70% Bearish outlook for stocks is the HIGHEST negative reading ever.  And their very low 19% Bullish outlook is only eclipsed by the 13% reading all the way back in 1990.  So to say that there could be a rally based upon such negative public sentiment is something any student of market technicals would say, and so I say it too.  But what I don’t see is a universal extreme reading like this one across all other key measures of sentiment, so I cannot pound the table wildly to make long-term investments on a whole-hog basis.

(right click AAII Sentiment Indicator below) <!--[endif]-->

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StockTalk:  I did note that one of my favorite stocks came down hard last week and when VISA(V: $50.19) briefly cracked below the $50 mark on Friday, it moved into the zone where I believe buying a few shares can be a good “add” to a conservative portfolio.  The stock is still well above its 52-week low of $41.78 so a move down to test that level might be in the cards and that’s why I would suggest only purchasing part of what you might be willing to own.  I do believe this will be a very good leadership stock in the next Bull market.... keep in mind, the next Bull market may not take hold until we get through this anti-business administration and the country votes in a more conservative leadership that understands fully that business is good for America.  That it's necessary for America.  And even more important, we need leaders who understand that capital formation is the driving force for job creation, growth and innovations, which the current guys don’t have a clue about.  Press Secretary Gibbs is dangerously naïve about the critically important relationship between Wall Street and Main Street and he is way too far down the learning curve to hold out any hope for.  However, he is getting some excellent training for his next job – Customer Greeter I at Costco.

BEWARE THOSE WHO PROMOTE CLASS WARFARE

Who is the middle class?  The administration doesn’t even know.  But I guarantee you one and all they are going to find out.  And it turns out they are hurting the very people they claim to be helping.  After all, how lucky can we, the middle class get, as we now have the brilliant mannequin Joe Biden heading our trek to the Promised Land, the land of milk and honey.  Michael Goodwin’s article hits a bull’s-eye when he describes just who the middle class is and why the promotion of class warfare is not only the wrong message, but a dangerous one as well.  And as I’ve said time and again here, the 60+ million who own stocks ARE very much the middle class.  And they ARE ALSO very much the employees of companies large and small in America.  Attacking corporate America under the narrow umbrella of fixating on some overpaid executives is losing sight of the moral of an Aesop fairy tale…. The Goose That Laid the Golden Egg.  Corporate America and Capitalism IS the Golden Egg.  We may not like the excesses that occur at the height of euphoria and we certainly don’t like the experience of wringing out the excesses at the lowest of lows…. But everything we have… our modern lifestyles, our homes, our cars, our electronic gadgets, our computers, our communications devices, our cell phones, our big screen TV’s, our appliances, refrigeration, microwave, our breakthroughs in medicine, surgical devices, our daily consumer products, everything is the result of trickle-DOWN economics… aka Capitalism.  To destroy all that which underpins every one of those technological advances, conveniences & more…. And all for the sake of getting the entire American public emotionally whipped up over a few bad apples is to undermine the entire philosophy of the founding fathers of our great nation.  I don’t believe Americans will let that happen.  Either the tone has to change out of Washington or the movement to get these guys out will gather huge momentum even before the next elections.  The greatest con-job on America is over.  Move-On-Con-Job.org and organizations like them have contributed to this 4-year experiment in extreme Liberalism and anti-capitalism under the name of protecting the middle class.  It’s all a lie.  Middle class, take a look at your 401-K.  Don’t let the word “inherited” fool you.  The millions of people who make up the financial markets vote every day about the future.  There is not a one of us who knows more than the collective knowledge of the markets.  Not a one of us.  Not you, not me, not Obama, not anyone, and definitely not Gibbs.  I will be back on Monday evening, when hopefully; the market finally starts out a week on a positive note, if that’s even possible anymore. - gc

WELL, ANOTHER UP DAY IN THE MARKET, THAT’S 2 IN A ROW AS STOCKS SLIDE 4% TO NEW BEAR MARKET LOWS / DOES BARNEY FRANK INTEND TO PROSECUTE HIMSELF?

Mar 5 (Thursday) – My sarcasm rings hollow tonight.  Yes stocks fell hard again; this time a sweeping drop clipping off another 4 to 4.5% depending upon which average you gaze at.  I said yesterday if there was no evidence of recovery in trading during the first 90 minutes, the session would not produce a follow through to the rally yesterday.  Well, the 90 minutes were not good and the dreadful result is obvious.  This was another extreme session of selling with market internals again stretched to capitulation levels with the NYSE Adv/Dec Ratio negative by 28-to-1.  Did you get that number right?  28-to-1!  There were new 12-year Bear Market Lows made in virtually every key index (but not NASDAQ).  The only thing different today versus the broad sell down 2 days ago is that today GOLD actually rallied strong, UP $21 and the mining stocks found buyers all day long.... with stocks in that sector up anywhere from 4% to over 10%, Yamana Gold(AUY: $8.81) rose 10.54%.  Technically we can talk about oversold extremes and support levels and all that stuff.  And frankly from a purely technical standpoint, there are still positive divergences (a few anyway), some technical non-confirmations and clearly, most of the sentiment and momentum readings suggest a rally should develop, at least based on historical parameters.  And for all of that, it won’t take much to trigger a rally, I mean one that can last more than a few hours.  Even a hint of stabilization in tomorrow’s Unemployment Report could be a spark. 

But investor psychology is completely spooked by the growing realization that capitalism is under siege and that the current administration would rather ignore history than respect it.  Let’s face some very hard truths about today’s America…. Now we’ve got Sean Penn setting international policy; Susan Sarandon promoting the illusion of global warming as a top priority; and we’ve got Bill Maher who bills himself as a comedian, but isn’t even slightly funny except to a few twisted Liberals who live within hardcore double standards and priorities that are seriously out of whack.  And we’ve got one of the biggest jokes in all of America influencing the political agenda, the slut-rag (new Cutler word), also known as The Almost Out-Of-Business New York Times.  So these are the people and groups setting the agenda for our safety and our economy in these here United States of America.  There is nothing scarier than that.  And people are wondering why investors don’t have confidence???  If you want to see a big rally in the stock market, here’s what needs to happen:

IS BARNEY FRANK PREPARING TO PROSECUTE HIMSELF?

Today Barney Frank told reporters he is considering legislation that would go after the criminals who created the financial crisis.  What?  Is Barney Frank testing the waters of his own fate here?  This slippery guy is a central figure in the enablement of the creation of the mortgage paper that much later became and morphed into CDO’s, CLO’s & CMO’s.  So is Frank preparing to prosecute himself?    Wow.  That would be good for a HUGE RALLY in stocks.  I’d wager at least 2000 points higher in the DOW.  If he truly wants to get to the genesis of the mess, then he’s right there in the middle of it as he blocked efforts by Regulators to impose greater controls and tighter scrutiny of Fannie Mae.  After all, how did all the paper that led to Credit Default Swaps come into existence?  Where did all that paper originate?  Where was it all enabled?  What were the incentives and motivators to create the mortgaged backed securities markets?  After all, in order for AIG to start a business segment to underwrite risk with Credit Default Swaps, all that paper had to be recklessly created first.  And didn’t that start with those in Congress and the Senate who vigorously blocked all efforts by the Regulators to rein in the situation during the past years of a decade?  The people in This Clip are the criminals, the ones who inspired and enabled the financial mess.  These are the ones who should be prosecuted.  Yes Barney Frank is quite prominent.  There are 1417 days left in the Obama administration.  There is no such thing as trickle-up economics.  In 1848, a book was written about what NOT to do in an economic system.  It’s called The Communist Manifesto.  Trickle-Up economics does NOTHING EXCEPT DESTROY WEALTH, and we are watching it happen live every day.  The only question is: will there be anything left to save?  In the words of General MacArthur, I shall return on Sunday nite. - gc

STOCKS ACTUALLY RALLY TODAY (NO… REALLY THEY DID!) GAINING 150 POINTS / GIBBS FAILS AT ECONOMICS 101

Mar 4 (Wednesday) – Nobody calls a rally like I do.  !!!!  The stock market had a positive morning tone as overseas markets were in the green and delivered a growing perception that China’s stimulus was starting to produce some optimism.  That feeling carried through overnight.  There wasn’t much in the way of news to damage the positive morning investor psychology and given the extended oversold situation with 12 of 13 days in decline a little hope that a turnaround can develop is a natural expectation.  The 150 point rally in the DOW INDUSTRIALS was a welcome sight for sore minds although stocks had been much higher coming into the last half hour, and then they lost steam and a 240 point gain dwindled down.  Nonetheless, a small victory for the Bulls with most indexes up over 2% and the NYSE Composite up a solid 3%.  The NYSE Adv/Dec Ratio was the best in awhile with nearly 5 gainers for each loser.  Some said a rumor circulated that Treasury or the House might come out with something regarding a change in mark-to-market rules, but there was no evidence of such.  Many have been calling for changes in the accounting rules to give relief to bank balance sheets.  Others say easing mark-to-market is not a good policy.  Take a look here at the viewpoint offered by famed short seller Jim Chanos on whether or not such accounting adjustment should be made.  He offers that it would make more sense to adjust the bank capital ratios.  Either way, the rally was a nice break in Bear market action.  In another surprise today, the EIA Inventory Report showed Crude Oil reserves actually fell as demand increased and OIL rallied nearly $4 to regain the $45 a barrel level.  This supported broad gains in most energy stocks with many of the oil service companies up more than 5%... while one we recently mentioned as a buy candidate, Weatherford Intl(WFT: $10.42) rose over 9%.  GOLD lost $10 and has now retraced 9.5% from the $1000 barrier to today’s close at $905.  But not all boats were rising as General Electric(GE: $6.69) fell nearly 5% to a new 18 year low during this fairly broad rally.  As I said a few days ago, the stock market was poised for a rally to emerge in spite of itself and in spite of unfriendly administration policy proposals, if for no other reason but for the deep, deep, deep oversold conditions.  It was very encouraging to see the S&P500 regain and hold the 700 marker and tomorrow will be a real good test to see if selling has burned itself out for the moment.  After all, yesterday, I did point out how we could be on the verge of the greatest rally in history!  With new economic data points expected in the morning on Non-Farm Productivity & Unit Labor Costs, the monthly Factory Orders and the always dreaded and seldom friendly weekly Jobless Claims report, we will know in the first 90 minutes if this rally is capable of being more than a one day respite from the tedious and grinding decline in stock prices.

GIBBS FAILS TO COMPREHEND THE PERMANENT LINKAGE BETWEEN MAIN STREET & WALL STREET

One of the many reasons stocks have been unable to get anything going is the endless string of naïve and unfriendly statements that come out of this administration.  Yesterday Press Secretary Gibbs said the following – “the idea that what was good for Wall Street is Good for Main Street is no longer valid” – that is just flat out wrong.  And it’s a poor message to send the American people.  Point #1: There are over 60 million households with market investments.  None of them can agree with Gibbs.  How can anyone claim to separate the fortunes of Wall Street from those of Main Street when there is such a predominant vested interest for a positive outcome?   Point #2: The businesses that are traded in the public domain are the VERY SAME ONES that employ people in your neighborhood and in towns and cities across the country.  Points #3 through 26: Points 1 & 2 are strong enough … we don’t need to go through the entire list.  This guy Gibbs is so off in left field it is crystal clear he can’t even begin to comprehend the permanent interconnectivity.  No wonder the market declines every time this guy opens his mouth.  Even Obama supporter and Wildman of STOCK-TV Jim Cramer (rant here) has finally come to realize the incredulous lack of market acumen by this administration.  It is interesting to see how the White House attacks anyone who makes an intelligent observation about their behaviors and policies.  I guess they are used to being omni-controlling from their Chicago-style-politics.  But one thing is certain in the United States, nobody can control the voices of America.  And now even Democrats are seeing the light as some are resisting some budget proposals including the tax deduction components as discussed in this article.  And perhaps that is the essence of the very hope that the stock market may have sniffed out today.  There are several things that can inspire a nice big rally here.  A Pelosi impeachment or an investigation of Senate & House Finance Committee members into the obstruction of efforts to impose Regulation of Fannie Mae are 2 things that would send stocks soaring.  But those aren’t happening this week.  However, a battle of Democrats who are starting to realize that the budget and other policies are undermining their very own constituents, well.... now that is something which CAN happen that the stock market can really grab onto.  I’m hearing many Obama voters who are already disillusioned with the proposed policies.  The snowball is just getting started.  And that might be the seed for the big rally we all want to see.  Back at you Thursday nite. - gc

STOCKS RALLY TODAY LOSING 37 POINTS WITH 2 STOCKS DOWN FOR EACH ONE HIGHER / TODAY’S SENATE HEARING HIGHLIGHT: COME TO VEGAS AND SPEND YOUR MONEY AND IGNORE THAT DOPE BARNEY FRANK

Mar 3 (Tuesday) – A good day in the market, Finally!  It’s been like what… over 2 weeks?  Let’s go over the numbers.  The DOW INDUSTRIALS lost only 37 points (and it was on the plus side several times during the day!!!).   The NYSE Comp lost 26 points.  The S&P500 lost 4 points and closed below 700 for the first time since 1996.  The NASDAQ lost only 1.84.  Wow, it lost LESS THAN 2 POINTS.  That is a freakin’ great day.  The NYSE Adv/Dec Ratio negative 2-to-1 with 2005 stocks down versus 1002 up. Hmmm, wait a minute, that is WAY BETTER than yesterday.  I’m getting excited here.  That means of your 10 portfolio stocks.... 6 were down, 3 were up and that last one is a coin flip…. or else unchanged.  Look at the statistical oddity of the A/D Line today ➜➜ it is exactly 2/1 negative save for 2 not being evenly divisible into an odd number.  This is amazing!!!  I am so obsessed with this one factoid that I might be able to conjure up an entire Bullish argument based on it.  Do you know this exact statistical event (I guess this can truly be classified as a ONE-OFF) has only occurred 3 times in history, once in 1982 the day before the Bull market started, once in 1974 the day before the final Bear market low was made and once in 1875 when the market had a half day for a holiday and the Advance/Decline Line was not actually calculated though historians say it did happen.  This is incredible.  This is just like that time when all 12 planets lined up over the equator on the same day Puxatawnee Phil picked up a hot little disco groundhog and created the basis for Pennsylvania to become a state.  In summary, this one stat tells me we are on the precipice of one of the best Bull market rallies in history.  This is the highest correlating indicator in history.  Did I mention that Bernanke and Geithner was center stage today with testimony?  Oh who cares about that… the NYSE A/D Line was one issue away from being exactly 2-to-1 this is really the key.  Did I mention that Pending Home Sales fell 7% to a new low level?  Or that Auto Sales were far worse in February that those horrible sales figures they had in January?  Fuggedaboud those things, look at this amazing mathematical oddity in the A/D Line today…. I just can’t get over it.  Did I mention that Nancy Pelosi is on a mission to destroy the American economy?  I know I mentioned that she is the most dangerous person in America last month, was anyone paying attention???  Forget about that now, we got an amazing stat tonight that will send stocks soaring; they will be ripping to the upside tomorrow just you watch.  Did I mention the audacity of arrogance of the current administration and their contempt for and disdain for Wall Street which is undermining any attempt for a recovery?  Forget that, this rare & unusual occurrence in the technical stats tonight is going to overpower all of the market-killing philosophy and programs being pushed by the new administration.  Now here’s the main technical trigger point… if tomorrow has 33% stocks up, 33% stocks down and 33% stocks unchanged, that will be the MOST Bullish event ever in the market.

THE BIG HIGHLIGHT OF BERNANKE TESTIMONY – “COME TO VEGAS, SPEND MONEY, IGNORE BARNEY FRANK”

I didn’t catch her name and I assume she’s from the great State of Nevada…. but one of the Capitol Hill committee members, a female at today’s Senate Budget Committee Hearing complained loudly to Bernanke, actually pleaded with him to defend her…. that too many other members of the Administration, Senate and House are hurting her state’s tourism business.  She said all this high-profile public yelling at banks and companies that received TARP money that they should not go to Vegas for conventions is having a negative impact on her state.  Then she verbalized a ‘come visit Vegas’ type commercial about the many virtues of Las Vegas and implored companies to travel there and do their business and to spend money.  This just highlights the colorful Keystone Cops who are running around Washington and it was THE HIGHLIGHT of the hearings.  I knew this would happen.  It was only a matter of time before the doophusalia in Washington starting hurting their own constituents with their ignorant lunacy.  Barney Frank publicly screaming at a bank and lecturing them about spending money to sponsor a PGA Golf Tournament was just the right level of visibility to boomerang back at him.  Doesn’t Barney Frank even know what stimulus is???  Even Obama knows that one – Obama says “stimulus is spending, seriously!”  This is the best kind of spending, spending that is happening TODAY.  Oy vey, these doophusalia in Washington are better than Days of Our Lives.  Now folks of the same party are battling over what is good spending and what is bad spending as they put on full display their promotions to cannibalize each other’s economic jurisdiction.  And Barney Frank of all people!  He who enabled the creation of the very paper that led to CDO’s, CLO’s & CMO’s should not be speaking out about what kind of spending companies should or should not do, TARP or no-TARP.  I predict another up day for stocks tomorrow, the DOW will probably close down 43.  I’ll be appearing next week at the Barney Frank Fannie Mae Comedy Club Convention in New Haven (however, I won’t be spending any TARP money there) and then I’ll appear at the Pelosi Most Dangerous Person in America Pull No Punch Line in San Francisco, but fear not as I’m right here again on Wednesday.- gc

DOW DROPS 300 POINTS TO 6763 IN A SWEEPING SELLOFF / 6 WORDS OBAMA SHOULD AVOID / WHY WASHINGTON OVERSIGHT COMMITTEES DON’T WORK

Mar 2 (Monday) – We knew there wouldn’t be much good news this morning… even with the AIG story that was well anticipated and the stock market was not able to find any footing after the initial opening sell-off.  The market has now broken to new lows in most major indexes.  Declines ranged from 4 to over 5% depending upon where you look.  The selling was extreme with virtually no pockets of strength, evidenced by the NYSE Advance/Decline Line which had 122 stocks higher versus 2791 lower.  In that regard it’s the kind of extreme you would see at a capitulation or a major market low.  But there was no panic and volume wasn’t huge and if there’s a low point in the market to be had now, I don’t think it could be termed as “major.”  Anyhow I don’t feel like going into a lengthy market commentary tonight but I do think the market is going to rally soon in spite of itself, in spite of the anti-market philosophy in Washington and in spite of the fact that there has been no area from which good news can arrive on the economic front.  Pending Home Sales, Auto Sales and Chain Sales are all due out tomorrow, is there a chance for any positive surprises?  Not likely.  Hey, NO GOOD NEWS POSSIBLE! - There's the reason for a rally soon!

6 WORDS OBAMA SHOULD NOT SAY

‘How ya like me so far?’  His cap and trade is undermining the energy industry, the government healthcare plan is undermining the HMO industry, and the pharmaceutical industry is being threatened.  Seems like the only business that’s going to do well is the one Pelosi invested in, Boone Pickens’s wind company.

THE FINANCIAL REGULATORS & THEIR OWN HYPOCRISY

The United States took action after the great depression to put in key regulations to prevent another depression.  The Glass-Steagall Act of 1933 was one of them.  It was designed to implement bank reforms to manage speculation, including a key provision that prohibited a bank holding company from owning financial companies.  This act was repealed in 1999 and how much a part the change in this provision played in opening the pathway for the current financial problem will probably never be fully calculable.  After all, that isn’t the reason that the housing market got out of control, which is really the basis for all the paper that was created that underlies the complex web of financial entanglements that followed on down the line.  One thing is clear; there are many Regulations in the financial and housing sector.  But what is the point of creating legislation and regulations when the very people who are suppose to BE the regulators are always BLOCKING attempts to DO the Oversight & Regulation?  If you want to see the real reason why government regulations don’t have any oversight, it’s because there is a vested interest in Washington that makes a concerted effort to block Regulations.  Watch This Now.  Listen closely.  In the words of Arnold…I’ll be back – on Tuesday nite. - gc

ANOTHER 119 DROP IN DOW & S&P MAKES NEW BEAR MARKET CLOSING LOW / BIDEN THE MANNEQUIN (Pull The String & Hear an Actual Gaffe!) / AMERICA, YOU GOT CONNED / A CALL TO THE MIDDLE-CLASS

Mar 1 (Sunday) – Last Sunday I said -- “I must confess that despite these encouraging short-term technicals, without some helpful street-friendly news it looks like the week ahead for stocks will not be easy”.  And it sure turned out to be another bad week for stocks in what was the worst February since 1933.  The INDUSTRIALS declined 12% for the month and are now down 20% for the year.  This IS the Obama market… it is NOT the Bush market.  It is the second coming of Jimmy Carter & LBJ all rolled into one.  Last week, despite the severely oversold technical status for stocks, even the standard month-end window dressing by money managers could not overpower the downward bias.  The GDP came at negative 6.2%, the worst quarter in the United States since 1982.   General Electric(GE) cut its dividend by two-thirds, their first payout reduction since 1940.   Once details of Obama’s budget came public midweek downside momentum gathered steam.  More Americans are awakening to the fact the new administration economic policies are designed to undermine entrepreneurial spirit and take away all incentive for creating wealth and prosperity.  This is a fundamental mistake for the future of the American economy.  The broader NYSE Comp and S&P500 fell more that 2% resulting in more than 2 stocks lower for each one higher.  The NASDAQ was less negative losing 1%.  GOLD slipped $5 and OIL fell .46.  The closely watched S&P made a new closing Bear market low and this index must find support in this general area or the concept of a double bottom reversal for that key market index will disappear.  So once again the week begins with stocks at new low points and in an extended oversold condition.  One would think a rally could develop out of sheer speculation.  But concern about where this nation is going in regards to how it treats business is an underlying market psychology that is defeating all attempts to rally.  I continue to emphasize owning the mining stocks and some exposure in the energy services and a few special situations while we wait to see more details on a constructive banking plan from Treasury.  Perhaps that can spark some kind of upside move.  On Monday we get new data on Personal Income, ISM Manufacturing & Construction Spending none of which are expected to be too shiny.  IF stocks can keep it together past those reports and into the 2^nd hour of trading, the oversold technical situation may attract some buyers to test the waters.

HEY LOOKEY HERE MIDDLE CLASS AMERICA – IT’S JOE BIDEN TO LEAD THE WAY – YIPPPEEEE!!!!

Barack Obama, Nancy Pelosi & Barney Frank are calling all middle class Americans, “stupid”.  And to make their point clearer, they put the poster boy of doophusalia, Joe Biden, in charge of the “middle class rescue plan project.”  This guy couldn’t manage his way out of a brown paper bag after you showed him which end is sealed and which is open.  Biden’s in charge of rescuing the middle class?  No Thanks!  Last week Super-Doophus-Biden said in an interview that Louisiana was losing 400 jobs per day.  Wrong again Joe!  Louisiana was the only state to add jobs last month.  Some suggest Biden lied.  I don’t think he lied.  He’s just amazingly stupid.  IF you want to see just how devoid of grey matter Biden is, click here.  Then think about the fact that this guy is #2 in charge of our country.  Thank You America for putting this joker in high office.  But fear not middle-class….Joe is on OUR side and he will lead us to salvation!

MOVE-ON-CON-JOB.org

My fellow Americans, as part of the esteemed Middle Class I’m outraged and offended that a bona fide member of the elite-doophusalia has been named the leader of our resurrection.  Biden’s already told us to be Patriotic and to pay more taxes, then Obama followed up and told us to be Patriotic and pay off our neighbor’s mortgage and it will not be shocking if Biden’s next proclamation of Patriotism is that we must step up to pay off our neighbor’s credit card.  America, you voted for this.  I know many of you got sucked in by groups like Move-On-Con-Job.org as they conned you into believing you were supporting an agenda that would lead America in the right direction.  As the days go by more and more of you will realize how the wool got pulled over your eyes.  Keep watching how this administration is telling straight to your face that they are helping you and watch how they are picking your pocket at the very same time.

A CALL TO ALL AMERICANS – PARTICULARLY THE MIDDLE-CLASS

Sooner or later, each of you in your own time, will come to realize and understand the following, that: A) Business is important in America.  B) The Stock Market must lead the way to better prosperity.  C) Incentives must be in place for entrepreneurial energy and wealth creating to re-emerge.  And D) The entire country benefits when these are the economic priorities.  The direction led by today’s administration policies and the misguided promotions of adjunct groups like Move-On-Con-Job.org is a direction that leads to the lowering of the standard of living for all Americans to a level that is permanently lower than where we are today.  Hello, Middle Class America, wake up, wake up, it’s time to open your eyes.  Ok so you got conned pretty good there, but it’s not too late to re-evaluate your situation and speak up.  Is this what you really thought you were voting for? ➜➜➜ One Senator said this week Obama is pushing "the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible."

Memo To All Middle-Class-Americans:  We are not this stupid.  All of you out there who think that being treated like 5^th graders by people ’the doophusalia’, who aren’t smarter than first-graders THEMSELVES must do some serious soul searching about whom you are and what this country means to you.  The current economic program is designed to bring the standard of living much further down and remain down ad-infinitum.  As I have stated here many many many times – There is NO SUCH THING as an economy that grows from the bottom up.  It doesn’t happen.  It doesn’t exist.  Every example of it in World History is a failure.  We are entering the long dark corridor with no light if we take this path.  Who will emerge as the next world power?  Look to the countries that are pursuing GROWTH and keeping incentives high for their entrepreneurial leaders.  When there is success by entrepreneurs and creative individuals are motivated to pursue new ideas & inventions, they create wealth and succeed…. Not only for themselves, but for the many people who participate in their venture as: employees, consultants, vendors, business partners or investors.  When this kind of activity is in motion…..and this is KEY…. the living standard for everyone improves and in a variety of ways and provable measurements.  America is now officially headed in reverse.  Yes, Capitalism can withstand the periodic dislocations on both the up and down sides no matter how severe the cyclical swings…. from the euphoric (internet bubble) to the contractive (great depression) as the economy is a dynamic perpetual motion machine.  But the idea that wealth can be equally distributed by the earners to the non-earners is a recipe for giving up America’s leadership position in the world.  I am a minority of ONE.  I will not give up.  Each of you is also A Minority of One.  See you on Monday. - gc

STOCKS DECLINE AGAIN AS DOW NEARS THE 7000 LEVEL / CONTRARY PLAYS & SPECIAL SITUATIONS

Feb 26 (Thursday) – In the pre-market it looked as though stocks would head higher and when the futures shrugged off that miserable Jobless Claims report and then the dismal 5.2% drop in Durable Goods Orders, and then that god awful General Motors(GM) quarterly statement, I would have doubled down that today would end on the plus side of the ledger.  A rally did take hold early and the DOW pushed its way up 130 points and breadth was decent.  Market internals stayed good and the gains were spread across many sectors.  OIL was also moving sharply higher tacking on another $2 on top of yesterday’s move.  As stocks begrudgingly lost their mojo the rally fizzled and markets went negative in the later 2 hours of the session.  The closing loss was 88 points to 7182 down 1.2%, though the NYSE Adv/Dec Line was only mildly negative indicating selected pockets of strength held on.  The decline varied widely today with NASDAQ hit hardest off 2.38% and the broadly based NYSE Comp falling less than 1%.  Some positive sectors were the GOLD stocks as well as Oil Services, a sector we like, which held positive on the back of the further jump in OIL prices.  GOLD stocks actually managed to produce upticks even though the metal itself lost $6.  It had been off $21 and then rallied to close at its daily high just as stocks headed south.  It’s interesting to see how GOLD remains the upside breakout group, even though it has backed off from the $1000 level and now OIL is following suit as it emerges with an upward bias.  Do you see how the commodities theme is slowly returning to the forefront?  February is now on track to become one of the worst months ever.  Hard to believe after all the bad months we’ve already had.  Tomorrow is end of month and it will take some extraordinary kind of rally to turn the month around…. too much to ask for, especially with the Friday morning trifecta of Q4-GDP, the Chicago Purchasing Managers report and Consumer Sentiment, none of which will be very encouraging.  The market will do well just to stay even tomorrow and with many short-term timing indicators in various stages of oversold…. at some point we should see a rally that can hold until a closing bell.

NOT A BULL MARKET BUT SOME SPECIAL SITUATIONS & CONTRARY PLAYS ARE WORKING

StockTalk:  If you want to take a shot some of the oil service stocks which look interesting are Schlumberger(SLB: $38.17), Weatherford Intl(WFT: $10.58) & Nabors Industries(NBR: $10.00).  I believe this sector can withstand a Bear market as long as it doesn’t go into a massive worldwide liquidation like we experienced in Oct/Nov when the hedge funds were forced to liquidate.  I also think this group can actually work higher in a sideways market or one which trends mildly lower.  Notice how VISA(V: $56.06) stays strong and was up 1.15% today again in a down market.  A lot of the construction and infrastructure stocks have been getting creamed lately and if they keep going down we may find a gem or two in there.  You’ll recall that these stocks ran up after the election as investors felt this was the way to play the Obama presidency.  Unfortunately for them, they thought that infrastructure was going to be the primary focus on the stimulus package and they got faked out.  Some of these stocks are down 33% off that disappointment.  Interesting.... that being the one area investors felt they could be confident in.  I say stick with GOLD and Energy Services and a few special situations otherwise remain defensive and keep cash reserves high.  I have personally kept rolling a relatively high hedge-ratio short position to help profit on the downside and that is working very well.  I was very pleased to see that one of my favorite special situations Guidance Software(GUID: $3.13) reported record sales and beat estimates, and added 41 new enterprise customers in the quarter, a pretty amazing accomplishment in this glum environment.  Here is the report I published online in December when shares were trading about the same $3 level as today.  They have no debt and $36 million in cash reserves.  Here is their earnings call transcript which you might find interesting reading.  Disclosure:  This is a small-cap software company that I own some shares in.  I might accumulate more if the Laurel’s, Nancy’s & Hardy’s, aka the doophusalia in Washington, can wake up enough to make me confident that a Bull market can develop. 

Raising corporate taxes is not going to help the economy, not going to help employment and not going to help the middle class Americans who are being misled to believe that help is on the way.  The way the middle-class is being conned into believing that current policy is going to help them is one of the most amazing deceptions I’ve witnessed in my entire adult life.  It is absolutely fascinating to watch and will be even more fascinating to see how long it takes Americans to connect the dots, draw the flow charts and realize that the new policies are completely backward and upside down.  The clock is ticking.  Have a great weekend all.  I shall return on Sunday nite. - gc

STOCKS WEAK AFTER UNEVENTFUL SPEECH / OIL SNEAKING BACK UP / SENATE & HOUSE FINANCE COMMITTEES LOVE MORE REGULATION BUT EXPERIENCE SHOWS THEY DON’T EXECUTE ON OVERSIGHT

Feb 25 (Wednesday) – Stocks were under pressure form the opening bell and kept sliding until the INDUSTRIALS were down 200 points with broad setbacks in all key indexes.  There wasn’t much of a rebound effort until mid-session when it was reported that Obama would make a statement after his all-hands meeting with key financial advisors that would address either new regulations or detail plans for bank recapitalization.  That inspired shorts to cover and likewise traders to purchase stocks and the market made its way all the way back to the plus side as the last hour of trade got underway.  As word leaked that the statement would only contain more broad comments and generalities with no details, stocks went back into sell mode.  The loss was held to 80 points, or a little over 1% across the board, though the more broadly based NYSE Composite slipped nearly 1.5%.  GOLD fell $10. 

OIL jumped over $2 to cross back above the $42 level as inventories grew less than expected signaling that demand for energy may have stopped declining and may have found a level of stability.  Despite the broad decline today, bank stocks were mostly higher and some energy & oil service issues also climbed higher.  Housing stocks were weak as Mortgage Applications declined and Existing Home Sales also fell further.  I think stocks will try to regain their footing tomorrow, even if no details of the Geithner plan are yet revealed.  The key test will be the pre-market economic data points including Durable Goods Orders and the dreaded weekly Jobless Claims report.  If the market can skip past those gloomy reports then stocks will make another try to rally.  Technically, stocks are still quite oversold and several of the trading oscillators are calling for some kind of rally here.... at least for a try to get back to the 7700-7800 area which would be a decent gain given how few gains there are.

OBAMA SPEECH A BIG NON-EVENT – STILL NO DETAILS ON FINANCIAL SECTOR

THE SAME HOUSE & SENATE FINANCE COMMITTEE FOLKS WANT MORE REGULATION EVEN THOUGH THEY DIDN’T BOTHER TO OVERSEE THE REGULATIONS THAT ALREADY EXISTED

The decline in stocks was not a total referendum on the Obama speech to Congress last night, which wasn’t spectacular by his lofty oratory standards and wasn’t awful either.  His tenor was more positive than his fearful dictates and that was welcomed by all.  But to spend four-fifths of his talk on the economy without any specific plans laid out was less than hoped for and the market took its morning queue from that.  He limited his references to “inheriting the current situation” to one or two times…. so while he hasn’t shaken that crutch (and that’s all that is) it was a step in the right direction.  Of course he inherited the financial problem directly from the Senate and House Financial Committees which have been dominated over the past years by the likes of Schumer, Frank, Dodd & Waters, to name a few who endlessly and unabashedly promoted aggressive home ownership as they enabled and encouraged banks to become more aggressive.  There is a building backlash brewing to put those folks under a sharper microscope.  Obama would be smart to drop the inherit stuff lest that backlash rise to the surface.  Popularity is great but it is a fleeting benefit.  The other thing he’s still a step slow on, and this one is real important, is that no meaningful economic recovery of any type can occur without a lead by Wall Street.  Depending upon how long it takes him to wake up to that reality will have a direct bearing on how long it takes the markets to recover.  When the markets recover people are feeling better.  They spend more.  Businesses hire.  Confidence grows.  Capital forms.  New businesses are created.  Debt financing improves.  And with nearly 60 million American households having a direct vested interest in the stock market this one variable makes a huge difference in the overall economy.  That’s 60 million households.   Think about that.  So many every day people have 401K’s, IRA’s, Mutual Funds, Bonds, Retirement Plans and are invested in all sorts of investment vehicles.  Browbeating Wall Street isn’t going to quicken any recovery.  We’ll see how smart this administration is on this very important factor.  Government doesn’t create new industries.  Investors create new industries.  Wall Street does.  Government doesn’t create growth.  Government creates subsidies.  I’m sure everyone is looking forward to see how government is going to manage a massive healthcare management program.  What successful government model will it be based on?   Anyone???   At the end of the day investors are looking for some kind of clarity with regard to certain financial policies.  Investors need to grasp what kinds of regulations are in store.  Don’t forget there were some very good regulations in place.  One of them Glass-Steagall got repealed in 1999 and that opened the path to a much more complicated financial industry.  Other regulations have been in place but regulators didn’t take responsibility for their oversight.  Since these fall to the Senate and House Finance Committees, it seems these same characters who promulgated the housing crisis and the ones who failed to perform oversight are now  the very same people who are pointing fingers at everyone else while they scramble to cover their tracks and move to come up with even more regulations that they will fail to oversee. 

THE HYPOCRISY EXPOSED - WHEN IS SPENDING STIMULUS and WHEN IS STIMULUS NOT SPENDING?

Barney Frank criticizes a bank for spending money as sponsor of a PGA golf tournment.  Perhaps Frank didn't get the Obama memo on What stimulus REALLY is -- and I quote from a recent Obama press conference, "What do you think a stimulus is?"  Obama asked incredulously. "It’s spending — that's the whole point!  Seriously.”  I'm sure those hotel employees, the local restaurant worker and the car rental employees were all happy to see the business to keep their jobs! 

Americans are watching a very interesting long process play out.  And there’s so much more to come.  Keep your eyes wide open.  You don’t want to miss a thing!  See ya Thursday. - gc

STOCKS REBOUND SHARPLY ON REDUCED FEARS OF BANK NATIONALIZATION / OBAMA’S BIG TEST FOR LEADERSHIP QUALITIES --- ALL EYES AND EARS FOCUS ON HIM TONIGHT

Feb 24 (Tuesday) – Some stock bloggers out there probably called the market higher for today, but I’m the only one who actually commanded it to go up!  Actually the market was excessively oversold enough to get some upside effort started, so I wasn’t sticking my neck out all that much.  The Bernanke testimony at today’s Senate hearing actually gave buyers inspiration when he clarified the difference between “partnership” and “nationalization.”  Senator Corker(TN), one of the few on the Committee who seems to halfway understand finance and the banking industry had an exchange with Bernanke through his questions that were insightful and shed some light on the real intentions from gov’t for the industry.  Today’s rally fought through the continuing stream of poor economic data though the retail report wasn’t as bad as expected.  The 237 point gain in the DOW INDUSTRIALS was far better than the “moderate” advance I was looking for but we’ll gladly take it.  Better still, both the NYSE Composite & S&P500 rose 4% and the breadth was excellent.  The NYSE Adv/Dec Line was positive by nearly 8-1 and the Daily New Lows dropped way down to 39.  Nearly every sector was strong and not surprisingly, given the intense focus on today’s Senate Banking Committee hearings, the market was led by the financials with the target-on-their-backs banks up the most Citigroup(C), BankAmerica(BAC) & Wells Fargo(WFC) all soaring 20% on the day from their incredibly depressed levels.  Homebuilders were also strong as was retailer Home Depot(HD) (my #1 stock pick for 2009) which jumped 10% to back over $20.  For the internals to be ripping this strong off the low actually provides some good cover for a continuation of the rally.  It also opens the real possibility that the “double bottom” formation we started talking about last week can be saved in the key S&P500 Index.  This would be a hallmark technical event though we won’t know if the pattern is solid until the market has moved higher and overcome some important resistance levels.  But at least it can get a running start now.  The only sector that performed badly was our favorite one, GOLD which has had spectacular gains already this year while all other assets have been losing their value.  The metal lost $29 an ounce today. 

THE BIG SPEECH -- WILL IT PRODUCE A LEADER OR A BLAMER?  AN EXECUTIVE OR A TALKATIVE ACADEMIC?

About the only thing that can set this all up for failure is if Obama fails to deliver in his speech to Congress tonite.  >>>  If Obama spends time carping, blaming and complaining about the prior administration that will affirm to everyone that what Obama possesses in ORATORY SKILLS skills, he lacks in LEADERSHIP.  In other words, is this guy a talker or is he a leader?  Is he just another arrogant liberal blamer who advocates free speech and tolerance, but then imposes his beliefs on all others, or he is really the partisan embracer he professed during the campaign?  The world is watching.  It’s no longer about his words or his preacher like cadence or his endearing platitudes and his banter and jocularity.... but rather is this guy ready to be a leader and tackle the job and assume full responsibility for his decisions?   Is he willing to get his Congressional and Senatorial disciples in line such as when Dodd repeatedly upsets the markets with his calls for bank nationalization?  We’re gonna find out ALL OF THAT good stuff this evening.  Obviously, I’m writing this before the anointed one speaks.  But I’ve laid out some of what the market doesn’t want to hear.  What he says about raising taxes may also dictate market reaction tomorrow.  The good news is if tomorrow’s market reaction is positive, we can then start detailing the significance of a technical “double bottom” and that would be something to be enthused about because that formation, rare though it is, can spur a very strong sustainable gain in stocks.  And I know some of you might like to see that.  We’ll be right here Wednesday nite. - gc

MORE NEW LOWS FOR STOCKS AS MAJOR INDEXES DECLINE ANOTHER 3.5% / STATE-OF-THE-UNION IS OBAMA’S CHANCE TO DEMONSTRATE IF HE GRASPS THE REAL MEANING OF LEADERSHIP

MARKETS CONTINUE SLIDE / THE ENDLESS LIBERAL BLAME GAME / GOLD $1000 / SEARCHING FOR STOCK MARKET POSITIVES ON THE TECHNICAL FRONT

Feb 22 (Sunday) – Friday was another disappointing market day in what has been a long string of those dating back to when the 9000 level was approached early in the year.  The late recovery to cut the loss of the Dow Industrials in half down to 99 points cast some hope going into the weekend.  That late improvement appeared to be linked to comments form the White House affirming that the administration is committed to a private sector banking industry and no nationalization.  Hmmm, sounds like someone finally got a call thru to the right person!  Using that index the market is already off 16% this year and we’re not even 2 months into it.  Entering the new week there are no economic data points until Tuesday, though the weekend release of details of the President’s budget proposal isn’t likely to be a real upside catalyst.  Raising taxes on higher net worth individuals is exactly the wrong formula at this time of economic duress.  For the 20 million jobs created when Clinton was in charge, tax hikes on the wealthy was not the key stimuli.  ➜ ➜  Rather, the economic expansion was broadly spurred by (1) the momentum from the long-term decline in interest rates which created (2) expansion and momentum in housing and other sectors.  (3) The full transition of inflation to a stable low level, (4) the uniform expansion of emerging nations around the globe and (5) the spectacular (spec-tac-u-lar) investment of untold billions by venture capital (investors) into new technology, defense initiatives, telecommunications, internet and the network infrastructures to support all of those.  From my vantage point, this last factor was the single largest contributor to job creation.  Not the tax increase on wealthy individuals as cited by those who don’t seem to yet understand the relationship between capital markets and the economy but who want to ignorantly show support for current administration proposals and plans.  It is hard to see how the market will get excited positively when every thing being said and done out of Washington is contrary to the benefit of business and markets.  How long will it take for the doophusalia in Washington to understand that capitalism is the lead dog…. that small business is the driving engine of the economy…. and that private investment (yes, from wealthy individuals) is what leads to new initiatives and real job creation?   How long will it take? .… it better not take much longer, the nation can’t afford this much ignorance and 4 years of OTJ-Training.

THE BLAME GAME – FAVORITE LIBERAL PASTTIME – TIME FOR PELOSI/OBAMA/AND ALL OF THEIR SURROGATE SPOKESPEOPLE TO STEP UP AND TAKE RESPONSIBILITY FOR THEIR OWN DECISIONS / ACTIONS

It appears to me that Nancy Pelosi, Barack Obama and others I’ve heard yapping and blaming still fail to understand a most basic truism of the human existence.  At the end of the day everyone is responsible for their own decisions (Liberals don’t acknowledge this).  Fortunately denial does not create truth.  Nancy Pelosi is responsible for her decisions.  Barack Obama is responsible for his decisions.  You are responsible for your decisions.  I am responsible for my decisions.  George Bush is responsible for his decisions.  George Bush didn’t make Nancy Pelosi put all that non-stimulus stuff in the financial bill.  George Bush didn’t make Barrack Obama push a vote on the package without having read it himself or having allowed those voting to read and digest it.  In fact, I doubt very, very much that George Bush would ever endorse putting legislation in front of anyone and force passage without a healthy debate until after all parties had a chance to read and evaluate it.  And especially not rush through the monstrosity of the biggest spending package ever in US History without a careful review by many sets of eyes.  Looks like the Liberals are conditioning the American public to hear blame of George Bush for the next four years.  And you know what?  Americans ain’t gonna buy it.  The folks in Washington better look up the definition of “LEADERSHIP” because it doesn’t involve blaming past administrations for decisions they are making and those they will be making for the next 4 years.  And that’s a lesson in LEADERSHIP they can learn from George Bush who inherited a recession, a bursting internet bubble, a change in Bank regulations with the repeal of Glass-Stegall and then the 9/11 disaster 8 months into his office.  Nope, I didn’t hear constant blaming of Clinton and the prior administration.  Just saw a LEADER dealing with the fastballs as they came at him, stepping up to confront each challenge and taking a stand without blaming everyone else.  Now that’s LEADERSHIP.  I don’t know what to call this pansy behavior we’ve been watching, but is has got to change or we are in for a long, long, long 4 years.

$1000 GOLD  (I LOVVVE this 13 second clip, click here)

As predicted, GOLD crossed above the $1000 level though it settled the session below that mark, still gaining $20.  I hold fast to the view that GOLD is the only market (along with other precious metals) considered to be in a Bull Market and the next leg up is already underway.  Now looking for $1200 an ounce.

SOME TECHNICAL FACTORS WHICH COULD SUPPORT A STOCK MARKET RALLY

DOW SETS NEW 6 YEAR LOW WHILE S&P500 HOLDS 4% ABOVE ITS NOVEMBER LOW / THE LIBERAL AGENDA CANNOT WITHSTAND THE CONSTANT X-RAY OF ITS OWN BROAD HYPROCRISY

Feb 19 (Thursday) – The market tried to steel itself today in the face of continual disappointments from economic data points.  At midday stocks had recovered off their worst levels and the internals were nearly even, which I thought was the ingredient needed to bring on a late rally.  Not to be.  Losing 1.2% the INDUSTRIALS closed at a 6-year low at 7465.  That percentage loss doesn’t negate the possibility for a double bottom to still complete its formation, but the ability for maintaining that pattern is slipping away fast.  GOLD gave up $10 today.   In a surprise from the EIA report that inventories declined this week, OIL jumped 14% a barrel.  Higher fear has crept back into the market, though overall price volatility has not increased much.  While the public is fed daily the Dow Industrials as “the market” (and I use it too for various reasons), the S&P500 is what pros key in on since a 30 stock average can be easily distorted by one or two stocks and a 500 stock index is a truer representation of actual market behavior.  The S&P500 is still about 25 points above its November low and the 6 month chart gives a good visual (right click here).  I was planning on going into a deeper technical discussion to help define with more granularity what is involved with a double bottom pattern, but my enthusiasm for the discussion isn’t there tonight, so maybe next week if stocks show signs of holding the line here.

DISENCHANTED WITH THE KING – The Liberal Agenda Cannot Withstand the Scrutiny of its Own Hypocrisy

The public is expressing a great deal of disenchantment with the current administration’s programs.  The Housing & Mortgage Recovery plan is raising lots of anger and contempt and I’m not talking about conservative political outcry; this includes a great many who voted for Obama and now realize that while they have struggled to pay their mortgage on time and sacrificed personal luxuries, they are now going to help their neighbor pay down a mortgage who took out addition equity to build a nouveaux kitchen and a pool.  This is a pill that defies political partisanship.  There’s also a lot of angst being raised by folks of every persuasion as they learn how the extreme left wing agenda of Nancy Pelosi defined the $700plus billion non-Stimulus package.  Do you know of anyone who lost a job in the field of saving the Salt Marsh Mouse?  Those folks are getting $30 million.  Thirty million for what?  To hire whom?  *I’m gonna make a prediction right now – in 2 years, the Liberal Agenda will be so exposed for the hypocrisy it is, that many who crossed over to vote for “change” will be running back in the other direction fast while asking for repentance of their sins.  Tomorrow marks the first full month for the new administration and the transparency that was promised was not delivered.  Nobody had time to read the $700 billion bombshell to support the Salt Marsh Mouse.  Eventually, “thinking individuals” will wake up to the fact that using words does not equate to actions and deeds.  (I said “thinking individuals” because “emotional individuals” will ALWAYS adhere to the Liberal Agenda and nothing can ever change that.)  People, including the President, can use the word ‘transparency” over and over and over again, but unless one actually provides transparency, the word rings hollow.  My prediction is not based only on these financial programs, but also on the behavior of those suddenly flexing their power in the current administration.  This new Attorney General Holder /  What is this guy kidding?  Says Americans are cowards and that there’s been no progress in Civil Rights in the past 50 years.  I would not be surprised if half the people who were mindlessly swept up in the internet campaign for “change” are already questioning themselves with – “oh no, what have I (we) done???”  The liberal shift in this country is going much further left that many realize.  It will take 2 years or more before enough thinking individuals realize that a leftist government can’t create economic growth.  It may take even less time for many of them to realize that in the Liberal Agenda the concept of "Free Speech" only exists if your speech matches their ideas and beliefs.  The ACLU is a perfect example of that hypocrisy.  Fortunately, the Liberal Agenda cannot withstand the scrutiny of its own hypocrisy.  Remember that phrase.  I coined it.  It’s mine and you’ll be seeing what it means over the next 12 to 24 months.  After another tough week for investors the coming weekend is a welcoming sight.  Back Sunday eve. - gc

2009-2-18  (Wednesday Evening Update)     

STOCKS HOLD THE LINE TODAY WHILE DOW TRANSPORTS MAKE 5-YEAR LOW / GOLD CLOSING IN ON $1000 / VISA, IT’S WHAT YOU WANT EVERY STOCK TO BE – THE PERFECT BUSINESS MODEL

Feb 18 (Wednesday) – Stocks opened marginally higher and traded in a narrow range while flipping back and forth to close virtually where it started.  The Industrials edged 3 points higher, other averages were small amounts lower.  The NYSE & NASDAQ Adv/Dec Ratios were both definitively negative by at least 2-1.  The DOW Transports made a 5 year low.  Housing Starts plunged 17% to an all-time record low.  The media twist on that was mostly negative but I think the tradeoff on that one is positive.  If these starts slow down then the quicker housing inventory can clear.  I heard today that the California First-Time Home Buyer Index (right click) jumped to 59%.  All in all it wasn’t a bad day given the circumstances.  Bernanke spoke today at length and vowed to continue taking action on all fronts to attempt to stall the economic decline.  The outlook was reduced and expectations for a longer recession and higher unemployment were acknowledged.  Interestingly, the FOMC minutes indicated discussion at the Federal Reserve to explore establishing quantitative guidelines or targets for a monetary aggregate, perhaps the growth rate of the monetary base or M2; in their view such guidelines would provide useful information to the public and help anchor inflation expectations.  While the minutes also said that their forecast was for low headline and core inflation for the next few years, the star of the day again was GOLD.  The metal opened lower and appeared to be setting up for a profit-taking session but the selling disappeared midday and GOLD reversed to close up another $14 getting ever closer to the $1000 level.  Perhaps the reversal was triggered by the Obama announcement of details of the $275 billion housing and mortgage subsidy program, which was in three parts, including $75 billion as incentives for lenders to rework and modify mortgages and $200 billion in direct equity for Fannie & Freddie to purchase mortgages.

It was an encouraging trading session, encouraging in that the sell-off did not continue and the prospect of building the second part of a Double Bottom Reversal Pattern remained intact.  After the close Hewlett-Packard(HPQ) reported decent earnings but shares got hammered after hours as they cut their 2009 forecast.  This kind of news sets up another challenging day tomorrow, especially with the host of economic reports led by the death-defying Weekly Jobless Claims along with Producer Prices, Leading Indicators and the Philly Fed Business Survey.  With 2 of those to be released pre-market and the other 2 at 7am(est) it will be clear in the first hour of trading how the market is dealing with all of that negative economic data.  If stock prices are holding reasonably well and if internals are no worse than 2-1 on the downside, it would suggest to me that a rally would be forthcoming later in the day.  To jump through those hoops is a lot to ask for given current nervousness.  Another interesting day awaits.  StockTalk:  VISA(V) is one of my favorite stocks.  We talked about it a week or so ago as a good portfolio candidate but on strong earnings it shot up above where we wanted to buy it.  We note today disclosure by several major investment groups of recent increases in their VISA holdings, even one which is more noted for their prowess in short-selling, reported they liquidated their Mastercard(MA) shares and added to their position big V.  I don’t know when the next Bull market in stocks will get underway, but I will practically guarantee that VISA will be a leadership stocks when it does.  In fact, I would think the stock will be sneaking up long before a Bull market can be validated.  It’s already up 14 points from its low.  Maybe it is a positive flag waving amid a bloody battlefield?  I’d like to stay here and talk more individual stocks but I must go and research to see if I qualify for mortgage interest rate relief!  Be back Thursday nite. - gc

STOCKS SELLOFF AS PORK IS SIGNED AND DOW INDUSTRIALS CLOSE RIGHT ON NOVEMBER LOW SETTING UP POTENTIAL RARE DOUBLE TOP REVERSAL FORMATION / GOOOOOLLLLLDDDDDD

Feb 17 (Tuesday) – Stocks pointed lower in the pre-market, they continued to point lower even after WalMart(WMT) earnings came in higher than expected, they opened lower and then stayed down all day.  Even the signing of the historic economic recovery bill didn’t help, and in fact, it may have contributed to the atmosphere of malaise.  Certainly the lack of enthusiasm by GM bondholders or anyone involved with the auto situation added to the gloom as GM asks for $2 billion next month to stave off bankruptcy.  Not a friendly atmosphere for financial assets.  Today was a broad sweeping decline.  Only 87 stocks gained on the NYSE.  The Adv/Dec Ratio was negative by 30-1!  That is an extreme number, the type one sees in a capitulation, yet there was not the panic stricken fear that one also sees accompanying a capitulation event.  All averages were down sharply some losing over 5%.  The Industrials closed at 7552.60.  That is almost exactly the closing low from November.  The difference is less that 1/3 of one point.  It is uncanny how markets sometimes do that.  Now we have a real interesting technical situation.  We still have positive divergences in several of the broader indexes, even though those broke some key support levels today.  Plus we have the potential for a double bottom (right click for chart) in the Industrials. 

POTENTIAL FOR A RARE DOUBLE BOTTOM REVERSAL FORMATION IN STOCK MARKET

This is an exciting flashpoint.  On the one hand there is the increasing fear that the market is on the verge of a new leg down, which would certainly be more than unpleasant.  On the other hand, markets must be excessively negative in order to create a potential positive.  The sudden chance for a real technical Double Bottom is critically important…. for this type of chart formation is one of the most reliable and predictive chart patterns.  In other words, all the basebuilding has now reached a point where there is an opportunity for a “True Double Bottom”, a fairly rare technical ‘reversal’ formation.  When these occur they are of rather high reliability once they are confirmed.  The devil is in the waiting.  These Double Bottom formations are not identifiable at the moment they appear to occur.  The true pattern is not validated until prices have gone a long ways away from them.  You probably hear people on TV talking about double tops & bottoms all the time, but these do not occur with real meaning in short-term trading models.  To wit, these particular formations ONLY occur when the bottoms (or tops) are made at roughly the same level but occur at minimum two or three months apart, sometimes more.  If they occur too close together, then the pattern is considered to be part of the same consolidation and not as two distinctive bottoms.  This is an important distinction when it comes to chart reading.  The exact reverse would be true when spotting for a legitimate Double Top.  They are valid ONLY when they trigger confirmation as a major trend reversal pattern.  From November’s low until today’s close is about 3 months apart and therefore, the potential for a legitimate Double Bottom is now in play.  The operative word is: Potential.  We won’t know for awhile.  The reason I’m a little excited about this is because if the pattern becomes validated as a true upside reversal, it would then support a high confidence call for a fairly significant uptrend with minimal near-term downside risk.  We’ll have to watch this closely, and trust me, we will.  To be realistic, if tomorrow is a continuation of today’s slide then the opportunity for this great reversal pattern to eventually be validated quickly starts slipping away.

GGGGGGGGGGGGGOOOOOOOOOOOOOOOLLLLLLLLLLLLLLLLDDDDDDDDDDDDDDDDDD !!!!!!!!!!!!!

GOLD surged $27 today to $970.  The mining shares were also strong.  Very rare when mining shares follow the GOLD price higher on a day when all equities were sold without regard for anything.  Again the metal is sending strong signals of Bull Market behavior.  It is the only market I can unequivocally state is in a bona fide long-term uptrend.  There is no question in my mind we will see $1000 an ounce very soon and $1200 to $1500 later in the year.  I’ve said all along this is the market to emphasize; this is the market to own this is the way to create positive investment returns.  The best may still be yet to come.  Hang on.  I’m gonna stop here today and eagerly await tomorrow to see if the process for the major reversal pattern in the stock market can start to take shape.  Back on Wednesday eve. - gc

MARKETS DRIFT LOWER PRIOR TO LONG WEEKEND / TARP-1 FOR THE UNEDUCATED, ATTENDANCE IS MANDATORY

PRESIDENT PREPARING PENMANSHIP POST POINTED PARTISAN PUSHBACK PARADOXICALLY PROGRESSED PARALLEL PREDICTABLE PALTRY PASSAGE OF PRESIDENT’S PRESENT PORTLY STIMULUS PACKAGE PURPOSELY POWERFULLY PRE-PACKED W/ NON-STIMULATING PRETENTIOUSLY PERCOLATED PUFFED PELOSI PREFERRED PICKED PROTECTIONIST PORK PATE’ PRODUCTS (say this 5 times fast!)

Feb 16 (Monday) – In a listless pre-holiday session stocks drifted lower with the DOW INDUSTRIALS closing on its session low off 82 points to 7850.  The market is now lower by 10.5% year-to-date, one of the worst starts under a new president ever.  The S&P 500 is down 8.46%, the NASDAQ faring better lower by 2.7%.  The DOW TRANSPORTS have already fallen over 16% this year.  The best index I can find is the AMEX Composite which is actually up by one-quarter of one percent.  By today’s standards, that’s a huge win!  As Obama prepares to signs the non-stimulus package and the G7 proclaims more economic woes ahead and Japan releases its worst GDP quarter since 1974 about the only thing that looks good…. Is that nothing looks good.  The automakers will be front and center trying to wangle their way for more government money with what are suppose to be credible business plans.  Meanwhile, the background is that car sales are down, retail sales are down and job losses are up.  There are a number of key economic data points to hurdle this week.  There are minor ones today with the Empire State Manufacturing Survey and the Housing Market Index from the National Association of Homebuilders.  Things will really start getting tested midweek as Wednesday we see what Housing Starts, Import/Export Prices and Industrial Production reveals and then an onslaught on Thursday with Producer Prices, the dreaded Weekly Jobless Claims, the Leading Indicators and the Philadelphia Fed Survey on business conditions.  You know that can’t be good.  Things aren’t stacking up too sweet and the Bears are feeling they can break this market to force a new selling wave.  However, with all the time the market has spent revolving around this baseline axis for the past 4 months, market internals have firmed up enough whereby these positive divergences still exist and with S&P500 showing good support above 810 the battle rages on but no serious breakdown.  This week is the ultimate test…. if the Bears cannot get stocks rolling over to the downside with some kind of momentum then the opposite is likely to occur, meaning a rally attempt toward the top of the trading range.  Chances are high stocks will start the week off sloppy.... the test will be if they can gain upward traction in the face of an expected barrage of negative economic news and disturbing dialogue over the content of the non-stimulus package.  Retail will set the morning tone as Wal-Mart(WMT) earnings pop out pre-market and investor perceptions on that report will have everything to do with determining market psychology.    PORTFOLIO TALK:    I continue to emphasize for investors to maintain an overweight position in mining stocks and to accumulate energy/oil services for a future upturn.  I’m holding those shares of General Electric(GE) and that IPO Mead Johnson(MJN) both purchased last week.  Pfizer(PFE) (which I own at higher levels) looks like a real value play given the extreme pressure shares have faced during the buyout of Wyeth(WYE).

TARP-1 – ENROLLMENT FOR SCHOOL OF TARP-1 (101) BEGINS NOW

How many people have you heard say “Tarp 1 didn’t work”?  Politicians, media, investment gurus many are saying it.  The fact is those who say Tarp-1 did not work still don’t understand the purpose of it.  It was NOT an economic stimulus program and it was NOT a complete salvation for the banking industry.  The purpose of TARP-1 was to >>> stabilize a financial system that was on the precipice of imminent collapse.  Let me repeat for those with clogged ears, on the precipice of collapse.  The import of that cannot be over emphasized.  TARP-1 was specifically requested to prevent a worst nightmare scenario and it appears to have done that.  The tensions in the financial system are nowhere close to what they were before TARP-1 was applied.  This purchase of a defensive wall and acquisition of the time to take a more measured approach to the economic problems was a major lifesaver.  Any politician who says TARP-1 did not work, should not be re-elected.  In fact, they should resign now based specifically on having unacceptable levels of understanding of the situation to represent you, me or anyone in this country adequately.  Any media person who says it should be mocked, laughed at and ridiculed to no end.  Any one writing for a business department who says TARP-1 did not work is either pandering to their political wavelength or is the luckiest person in the world to have someone that loves them enough to give them paychecks.  I know, some of these dweebs, the prevailing resident doophusalia, slough off their position by saying that TARP-1 was suppose to purchase the toxic assets as was originally presented by Paulson and not to be used to infuse capital into the banking system as it was.  OK, now anyone who puts forth that demented logic is a prime candidate for the King and Queen of Doophusalia Awards given out at the end of the year.  Purchasing those toxic assets would not have adequately addressed the systemic financial problems that were crippling the system and would have tied up all that capital without creating much benefit for the system.  The infusion of capital was absolutely the best way to create leverage for that asset to shore up balance sheets and create equity based infusions.  It was not a one-stop fixes all; it was a repair strategy for a dyke with many holes leaking fast.  Fortunately, as fast as things were moving, Secretary Treasurer Paulson was able to reshape his approach just as quickly to keep up with the runaway train and get a lasso around it.  The doophusalia who preach that whatever was presented in the original plan MUST be the strategy executed no matter what are either among the most ignorant on earth (specifically in Washington) or they’re so blinded by political demagoguery they cannot ever allow logic and reason to prevail for the sake of a political agenda.  TARP-1 Worked.  Don’t let the goofballs steer you otherwise.  When you hear one of ‘em say it didn’t work, just add them to your mute list and write us in a nomination to earn the coveted Doophusalia of the Year Award.  See y'all Tuesday nite. - gc

STOCK MARKET SAVED BY MIRACULOUS LATE RECOVERY / LEMMINGS / CREDIBILITY SLIP SLIDING AWAY

PREPARING PENMANSHIP POST PARTISAN PUSHBACK PROGRESSED PREDICTABLE PALTRY PASSAGE OF PRESIDENT’S PRESENT PORTLY STIMULUS PACKAGE PURPOSELY POWERFULLY PRE-PACKED W/ NON-STIMULATING PRETENTIOUSLY PUFFED PELOSI PREFERRED PICKED PROTECTIONIST PORK PATE’ PRODUCTS (say this 5 times fast!)

Feb 12 (Thursday) – Pretty wild session on the street today.  When the Retail Sales came in better than expected I thought my view that the stock market would battle through and hang on looked promising.  Expecting prices to go down at the open, they just kept sliding until they were down more than 200 points in the early going.  Then a rapid rally cut the decline to just 40.  Later in the day weakness persisted and there were new session lows off 235 points and breaking the 7700 level coming into the final hour.  The improvement was coincident was rumor or news that the Obama admin was looking into ways to subsidize the homeowners with drowning mortgages.  In a miraculous LAST HOUR comeback, the DOW lost only 6 points, most other averages, and broader indexes made it back to the plus side with NASDAQ gaining 11 points (.73%).  An amazing turnaround with the market on the precipice of serious technical violations, the kind which when breached often brings in a cascade of selling.  I’ve had a pretty good handle on things lately.  At the 8300 area my thought was to get defensive and establish some minor hedge position (using SDS).  I would close those out for a profit now.  Last week I also iterated expectations that the recent calmer market would give way to more volatility and that there would be further anxious testing of the base area.  You saw today’s action.  GOLD again pushed higher, $8 today and this market has been providing outstanding returns, the kind one gets in a real Bull market.  OIL fell $2 and made a new low below $35.  Friday should benefit for today’s turnaround but my sense is that there is still going to be hesitation, even with the non-stimulus plan possibly hitting the President’s desk for signature this weekend.  There’s no reason to get into a long analysis here.  Bottom line is that it will be impressive if the market can continue the turnaround and regain the 8000 level, but that will only happen if there is a catalyst to trigger aggressive short covering.

LEMMINGS

A significant quorum of the media (the media-elite-doophusalia) today reported on the House Committee hearings from the viewpoint of informing the public on the persona of the bankers and how they “behaved.”  Very important stuff!  Obviously this was far more important than pointing out the lack of banking intellect (or any intellect for that matter) by the questioners themselves.  Or pointing out what a huge disservice to the American public who really does thirst to know more about the inner workings of the banking industry and how the variables of the financial crisis affect their ability to do business.  Honestly, I do not believe this is the intention of mainstream media, but rather, it is a reflection of their limited capabilities.  Their motive is to reinforce their own ignorant view that the most important factor from 8 hours in Washington was if the bankers were contrite, apologetic, confrontational, or what-have-you.  These media types can’t get a real job as they have no skills.  No, the big story yesterday wasn’t the demeanor of the bankers, or anything about them.  The big story and the ONLY REAL STORY was how scary it is that we’ve elected so many nare-do-wells to represent us.  Did anybody report this?  You will seldom get a chance to see so many doophusalia expose themselves in one convenient setting as a Congressional hearing.

ADMINISTRATION CREDIBILITY SLIPPING AWAY FAST

The credibility of the new administration is disintegrating faster than ivory soap in a pounding rainstorm.  Obama’s inexperience is growing more visible every day.  We need him to succeed and we want the country to succeed, but he’s going to have to come up the learning curve faster than this.  You see, when the public pre-election debate centered on “experience” that was a critically important debate.  The reality that Obama never had executive responsibility for anything was the most important topic of all.  Running a business, even a small one is tough enough and requires certain disciplines and certain skills.  And here we have a guy who went straight from never running anything to running the most complex and largest organization in the world.  Running a campaign does not equate to running a business with executive stewardship, it equates to having community organization skills, which we already know Obama is an expert in.   Coming out in a wide public forum to inform Americans that the next day his Treasury Secretary would be forthcoming with explicit details set a very high expectation.  That expectation was not met…. Not even close.  Obama tells the general public that virtually all economists from across the ideological spectrum support his economic approach, yet there is a large contingency of noted economists who absolutely oppose the current plan.  The United States spent a decade reforming the welfare system and Obama is bringing it back under the euphemism of “tax cuts for 95% of the people”.  Tonight Judd Gregg has removed his name as nominee for Dept of Commerce citing irreconcilable philosophical differences.  There’s two types of people out there in our country these days :

     1) the kind that love to hear Obama talk and they don’t care what he says, and many don’t even understand what he is saying nor have the ability or will to question any of it, but because it sounds so intelligent, so smooth, without stutter, and with a wry sense of humor they just love to hear him talk and can’t get enough of it; 
     2) then there are those who hear what he says, listen closely to the words and question the meaning, purpose, and intent of his stated propositions and challenge the ideas and the logic behind them along with the substance of the words. 

Which group are you in?  We got a long holiday weekend ahead and thank heavens.  Don’t know about you but I’ve been exposed to as much doophusalia as one can handle this week…. so I will check back in with comments on Monday night. - gc

STOCKS BOUNCE AROUND TO CLOSE MILDY HIGHER / WASHINGTON DOOPHUSALIA PUT ON CLOWNY SHOW

PARTISAN PUSHBACK PROGRESSES PREDICTABLE PALTRY PASSAGE OF PRESIDENT’S PRESENT PORTLY STIMULUS PACKAGE PURPOSELY POWERFULLY PRE-PACKED W/ NON-STIMULATING PRETENTIOUSLY PUFFED PELOSI PREFERRED PICKED PROTECTIONIST PORK PATE’ PRODUCTS (say this 5 times fast!)

Feb 11 (Wednesday) – I knew today was gonna be interesting and despite a quietly positive gain of 50 points, there were fascinating developments throughout the session; more on that later!  The bias was pleasantly positive with over 1700 gainers versus 1100 losers on the NYSE.  Stocks mildly bounced up and down across the neutral line a few times, but all averages closed higher.  Stocks seemed to get the final lift needed to keep things positive when the House & Senate agreed on a compromise for the non-stimulus package.  Bank stocks were notably strong while energy stocks were the big losers as OIL plunged toward the $35 level.  But the star of the day, once again….TA…DA…. GOLD - climbing $24.  Unlike the other day, today mining shares surged along with the metal, Goldcorp(GG) up 6+%, Kinross(KGC) up 8+% and our favorite, Gold Fields(GFI) up 12+%.  I hope most of you are overweighed in yellow metal as I am and as I’ve stressed many times over.  GOLD is in a Bull market, there is virtually no other market I can say that about with confidence.  The bounce back wasn’t too strong given yesterday’s horrifying episode, but at least it was up and there’s something to be said for that.  It could have been much worse and some thought it would be.  Tomorrow is the week’s first real confrontation with new economic data points as Retail Sales, Jobless Claims and Business Inventories are all set to rock the street; the first two, the more important ones, will be out in pre-market.  There’s always a cautious atmosphere when we are forced to be reminded about the rate of job loss and the difficulties in the retail sector, the part of the economy that most closely represents how things are really doing on Main Street.  Somehow I think the market is going to hold things together here despite more poor news on the economy.  Maybe it’s partly relying on the technical positive divergence we discussed yesterday.  Maybe it’s the market’s ability to return immediately to internal strength today with all what was going on.

SEARCHING FOR LIFE ON MARS (THE INVESTMENT BANKING INDUSTRY SPAWNS A REAL IPO!)

As a side note, there was a sign that there is life on Mars.  I mean… life in the underwriting biz as the first IPO in 3 months made it public today.  Mead Johnson Nutrition(MJN), a spinoff from Bristol-Myers(BMY) who retained 85% ownership, came public at $24 a share.   This company is the leading producer of baby formula.  Demand for shares was strong enough that the offering was increased by 5 million shares.  On a lark I put in for 200 shares and got 100 placed in my account at the IPO price!  The stock closed up over 10% to $26.43.  Hey folks, you can make money in this market!

HOUSE FINANCIAL SERVICES COMMITTEE WASTES HUGE OPPORTUNITY TO EDUCATE THEMSELVES

The elite doophusalia were in full regalia today.  The House Financial Services Committee blew it.  They missed a royal opportunity to gain keen insights about the complex issues and elusive variables confronting the banking industry as they wasted the chance to make good use of 8 hours on the Hill by the 8 Banking CEOs.  Hosted by Committee head Barney Frank, defender and promoter of Fannie Mae.  In the morning I happened to catch an interview Frank gave to CNBC and to his credit, Joe Kernen topped his questioning by saying (paraphrasing now) – Hey Barney while you’re after answers to questions from the bank execs, there are many who feel you‘ve got things to answer to yourself with your role in creating the housing bubble.  Frank, the consummate politician sloughed it off by saying he took over as Chairperson in 2007 and then blamed the other party.  Barney seems to think that life begins as committee chair.  He seems to think that all of his actions prior to that have no accountability.  Well folks, there is a history and here is one snippet from earlier years when he was a high ranking committee member and voraciously defended Fannie and the promotion of housing for everyone.

DOOPHUSALIA ON DISPLAY – THE SGT SCHULTZ AWARD GOES TO THE GENT FROM MASSACHUSETTS

Oh, back to the main topic…..  Yeah, those doophusalia in Washington.  Yeah they couldn’t wait to sink their fangs into bank CEOs.  How do we elect so many officials with so little grey matter?  Three-quarters of them had no interest whatsoever to learn anything about the intricacies of the issues facing the banks in the current crisis.  They deprived all of us Americans the chance to actually learn something.  Nope, they spent their precious minutes either lambasting, criticizing or polishing up stale Perry Mason routines trying to get to a “yes or no” answer to a question to falsely validate what their pre-conceived beliefs are.  What a joke!  One guy from Massachusetts, Rep. Capuano, a potential poster-boy for the collective doophusalia, was screaming so loud at the bankers, reprimanding them, imploring them, commanding them to get the g’dam money they were given, out to the public, to make more loans.  He screamed that “he was amazed none of them had been prosecuted yet!”  How do we end up with so many uneducated representing the masses?  Thankfully, the next questioner had the sense to allow the bankers to elaborate on how the money was NOT for the purpose of lending, but was specifically focused for stabilizing the banking system.  Yeah, that clown with his political grandstanding wasted his 5 minutes to make a complete fool of himself.  Spends all his time on the Hill and doesn’t even know what the purpose of TARP was for!  My question is why do all these blind extremists seem to emerge from the same party?  The statistical distribution seems to defy odds.  For today’s great performance, the SGT SCHULTZ (from Hogan’s Heroes) ‘I KNOW NOTHING AWARD’ goes to Representative Capuano who clearly had no inkling what the TARP was for and who’s rant may keep the blood pressure drug manufacturers in business for at least another year.

DOOPHUSALIA ON DISPLAY IN WASHINGTON (AND WE’RE NOT TALKIN’ ABOUT THE BANKERS!)

At one point my wife came into my office for her morning backrub.  I was pointing out how the doophusalia in Washington were wasting everyone’s time, especially the American public with staged grandstanding and prepped soliloquy from the kings and queens of doophusalia when suddenly one gentleman posed an incredibly insightful sophisticated question.  One so articulately stated and probingly structured that I said to my wife “ok here we go, finally a smart question that will elicit some in-depth insights as to how the banking industry is confronted with and dealing with the problematic toxic assets and the issues that come into play.”  The question completed, we were glued for the bankers to begin their replies when ole Barney Frank chimed in “your time is up, there will be no answer”.  Oh NOOO!!!!!!  And then came the best part!!!   Maxine Waters starts a rambling which was so discombobulated, even CEO Ken Lewis staring at her in amazed disbelief finally blurted out “I have no idea what you are even talking about.”  And the dais of 8 CEOs seemed to look around and agree with the same bewilderment.  Even the Committee panel was dumbfounded and the committee chairperson did the smart thing and asked her to stand down.  WOW!  These are our representatives.  We could have learned so much useful information today.  But it doesn’t stop there.  Later on, FOX had Maxine Waters on with Alexis Glick who seemed to be cheering her on and encouraging her.  Why is anyone propping her up?  Goes to show that the doophusalia is not limited to Washington…many in the media are also proud members of this exclusive club.  This country needs a serious upgrade of its representation starting right with Waters.  Half the representatives asked the same question over and over.  Most of the rest were there to make a point so they could go back to their constituents to brag about how he/she told off those terrible bankers.  About 60% of them didn’t even understand the banking business and a few more didn’t prepare too well.  One Representative from Texas asked a question without even knowing that Goldman isn’t even in the consumer lending business, which they had already stated in an earlier answer.  SO not only didn’t this guy prepare, he wasn’t even listening.  These are the people we elect.  IS there any wonder why we are in a mess?  WE, as Americans could have learned a lot of useful inside baseball today to help wrap our minds around the process of the financial crisis.  Instead we got a sideshow.  And many of the media-type doophusalia only will write about whether or not the bankers were “contrite” or “apologized” and that will be the entire message from the public hearings.  After all, those who can’t teach, write for the media…. Look at the pathetic state of the New York Times.  You think that’s because those people are smart?  OR is it because they are full of themselves?  So tonight many in Washington are at their cocktail parties patting themselves on the back and reveling in their joy of how they really gave it to those bankers today.  What a shame.  This was a chance for Americans to learn something.  Something useful.  We were deprived of a great opportunity.  We have to stop sending lawyers and socialists to Washington.  As I said, lots going on today….back Wednesday eve. - gc

ABOUT THE AUTHOR

Glenn Cutler was one of the most recognized investment newsletter publishers in the 1980's & '90's and was known for identifying unique opportunities in the stock market for institutional asset managers and individual investors through his investment publications: Market Mania, The Red Herring and DMC Market Fax.  Glenn achieved "Timer of the Year" awards in both GOLD and STOCKS by Timer Digest.  After years of retirement, he now sees excellent opportunities to make money in stocks and he's making his research and comments available once again.  Glenn has been an investment advisor, mutual fund manager (equities), market strategist and venture capitalist known for keen insights, forward vision, solid research and skillful risk management in the financial markets. He was a regular contributor to Financial News Network (predecessor to CNBC) and he was profiled as an opinion leader, money manager and stock market strategist in many leading financial publications. (The Wall Street Journal, Barron’s, Forbes, Fortune, Money Magazine, Investor’s Business Daily, Business Week).  Mr. Cutler was also featured in many books, including The Wall Street Gurus (1986) by Peter Brimelow.  Glenn Cutler is a current contributor to SeekingAlpha.com

DISCLAIMER

These blogs and reports are publications dedicated to the education of stock investors. The report is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The investment picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of Cutler’s Special Situation Reports (CSSR) may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. CSSR staff makes every effort to provide timely information to its readers but cannot guarantee specific delivery times due to factors beyond our control.