THE CON GAME CONTINUES

I just watched the President come out and state Washington was on the verge of $1 trillion in spending cuts over 10 years. I also heard him say it was the lowest level of spending since Eisenhower. I also heard him say things got done because of Americans whose voices Washington heard. HAHAHAHAHAHAHAH! Let me get this straight, since Obama became President, annual spending has gone up about $1 trillion/year…and now we are going to get cuts of $100 billion/year…and of course, a committee to form a committee to look at other cuts. Again…hahahaha!

Nothing has changed. The con game continues. As I told you, there will be no default as the debt “ceiling” is going to be raised again, averting the made-up default. Yippee…yeah…yeah. Before I talk about today’s nonsense, I must go backwards to show you how we got here. It was easy. Take a few pretend conservative Republicans, a crisis that brought TARP together, a Democratic House, Senate and Presidency and a dishonest mainstream media and you have a simple recipe’ for $16 trillion in debt. LET ME REPEAT THAT. THIS COUNTRY HAS INCURRED $16 TRILLION IN DEBT WITH NO END IN SIGHT. This has all been done on purpose. Federal Government outlays have almost doubled in 10 years…thus your deficits. I don’t want to hear it was because of Bush tax cuts. The fact…and let me repeat…THE FACT is that revenues soared from 2003-2007. It’s about the spending stupid and Bush was no angel! Under Bush, yearly deficits ran anywhere from $150 billion to $450 billion. That was bad enough. The Republicans could have done something about those deficits but did nothing. Back then, Republicans were ok with deficits. They did nothing. Enter Barack Obama.

And I quote:

“When I’m president, I will go line by line to make sure we are not spending money unwisely!”

The President immediately rammed through an $800 billion stimulus and if I recall correctly, a $400 billion supplemental spending bill.

And I quote:

“We Can’t Treat Tax Dollars Like “Monopoly Money”

And I quote:

White House budget director Peter Orszag : “The President strongly believes that as the recovery strengthens and job growth returns, we will have to take the tough steps necessary to return our nation to a fiscally disciplined and sustainable path.”

Of course, all lies. This President has taken the deficits into the stratosphere. Accrued debt was $6.3 trillion upon the Obama inauguration. At the end of fiscal 2009, accrued debt was $7.5 trillion. You know where it is now. This from a new President that said he was going to be fiscally responsible. This also does not include his healthcare bill in which we are told will cost $1 trillion…just multiply by 5-10 times.

Deficits happen on purpose. This President promised to unwind the massive deficits but didn’t. This President said one thing and did the exact opposite. He could not have done it alone. The mainstream media, as usual, fell on their swords. No longer were they watchdogs, they were lapdogs. Many who excoriated George Bush over his deficits now said deficits were not only needed but were too small. I get a kick out of every time I see Paul Krugman call for higher spending. These people don’t even care that they are on the record from years before. And I quote:

“We have a world-class budget deficit,not just as in absolute terms, of course — it’s the biggest budget deficit in the history of the world — but it’s a budget deficit that, as a share of GDP, is right up there…comparable to the worst we’ve ever seen in this country…. The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent.”

The deficit at that time in 2004, $417 billion. Fast forward to the last year…and I quote:

“These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.”And I quote:

“And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Deficits now…a measly $1.5 trillion. Yup…$417 billion is a horror show…$1.5 trillion is not a problem and just fear mongering.

Enter the tea party:

While the massive spending occurred, many became angry. Out of this anger, a new “party” was born…the Tea Party. Their words and their thoughts started to gain traction…so much so that they affected the elections in a major way. Republicans took back the house and almost the Senate. How did the media react? Did the media embrace these ordinary Americans they cared so much about? Nope…they tried to turn these people into racists and extremists. I will not bother you with some of the quotes. They are nauseating. The amazing thing is that these quotes didn’t just come from non-events like a Bill Maher but they were parroted on a daily basis by numerous hosts on a cable station owned by NBC. They were trumpeted by journalists from important newspapers like the NY Times. Imagine, people who care about the fact that this country will never ever be able to pay back these debts that have been incurred over the past decade…and have gone into hyperdrive in the past few years..and you are a racist and the extremist.

THE DEBT CEILING

There isn’t any debt ceiling. There is only debt and no ceiling. The debt ceiling is going to be raised again and again and again. There wasn’t any deadline. It was purely conjured up out of thin air…nothing more than a scare tactic. That’s what these people do. There was a very good chance to use some leverage and all that was done is a measly $1 trillion cut OVER 10 YEARS and some sort of a committee on more cutting. Don’t p—s on me and tell me it is raining.

I have watched this year at the State of the Union, Obama said “now is the time to act” on the debt. Instead, he produced another debt-laden budget. Think 97-0 voted down.

I have watched incredible scare tactics against the elderly by the President himself. The media said nothing. What do you think they would have done if that was George Bush scaring the crap out of the elderly?

I have watched the word “compromise” used hundreds of times. The mainstream media has been blaming the Tea Party all week for not wanting to compromise. How was the compromising when the Dems had the White House, Senate and the House? Does anyone remember, “we won…get over it?” I judge a politician by what he or she does with unfettered power. You saw what this man did when he had such power.

I have watched journalists call ordinary Americans terrorists. One called a good woman a slut. Why? All to protect an administration that has run amok with taxpayer dollars. This President just does not care. When he had the ultimate power, he could have done wonderful things. He was loved by many. Those that were skeptical, were hopeful. He could have got anything done. He sure did! Instead of using the bully pulpit to put this country on better footing, he has ripped the taxpayer apart for years to come. But we could not get here without the Republicans. There is no victory here. As I told you last week, there would be no default. I am telling you now there will be no cuts. They will just be replaced with more spending.

The only hope at this point is that there are 300 million people in this country. Somehow, some way, we need to find almost 535 people out of that 300 million that will actually do something about what we are seeing…and that is the destruction of future taxpayer earnings.

This remains nothing more than a con game where they tell you to watch the right hand but they rip you off with the left. The con artists continue to treat you like you are idiots. The ceiling is lifted once again with many taking victory laps. Washington is again acting like they did something good for the people. Washington only does good for Washington. Amazingly, I am reading that the left is mad at Obama for supposedly giving in. I have news for the anyone on the left who loves massive government spending. You should be doing cartwheels and lighting cigars at this deal.

The markets will react well just to the fact that the fake default will not occur. Just don’t blink. If they do not stop…and it looks like they will not…the market will eventually stop them!

 

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

 

AGAIN…MAJOR SUPPORT!

I will have a bigger report covering the con artists as well as the market on Monday but wanted to send this short note out to you today.

Major averages are now back at longer-term support…where they held nicely the last time. Remember, support is just that…a place where the big money crowd stand up to defend the market. As I write this, the S&P is holding the 200 day. The Smallcap 600 is holding the 200 day. The NYSE, Midcap 400 and the Russell 2000 have undercut but as I write this, are trying to reverse.

It is early, so anything can happen by the close. Just wanted to let you know we are back to that important juncture where markets held back in June. Also, add in the fact that you could cut the bearishness with a knife as the con-artists try to scare the c–p out of the average hard working American who caused none of these problems. It is still early in the day…but markets have already been hit hard on the fake default crisis. THERE WILL BE NO DEFAULT!

 

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

IF THIS IS ARMAGEDDON?

This past weekend, I received no less than a couple of dozen emails asking me just about the same question. Should I sell everything in case no deal gets done? Frankly, I don’t blame them for asking. After watching the mainstream media trying to scare the crap out of everyone over the weekend with Armageddon talk, one would have thought the DOW would open down 1000 points.

To be clear, I am not saying the market is not about to top out and head lower. For all I know, the DOW finishes down 300 today. What I am saying is that coming into today, the market has ignored the dire warnings. In fact coming into today, the Nasdaq 100 was in new high ground with many other indices close behind. So before you start to go out and sell everything, why don’t you take a good look at the market first? Do not let others sway you. There is a simple procedure I follow. Watch the 50 day moving average. The market cannot go down if major averages are above it. As of this second, they are all above. If markets break below, then I will look to take action. Currently, the 50 day is about 2-3% below these levels.

Of note:

The market has been improving as of late. Even the worst areas, financials and semiconductors have come off their lows, thought they remain relatively weak.

A few bellwether growth names have actually moved out to new highs. I always like seeing that.

Again, all major averages remain above the 50 day. A break back below the 50 day will be a negative.

On the negative side, there should be no doubt that the internals of the market today are much worse than the last time major averages were at these levels…which eventually will come back to haunt things.

As far as the noise out of Washington, I expect a deal to get done. Why? The last I looked the next election is around the corner. Unless they all want to be looking for jobs come next November, something will get done. But I must say, a deal to raise the debt ceiling without cuts will ultimately have repercussions. Those that follow me know I live by a certain motto when it comes to these charlatans in Washington. It is simple logic. “If they don’t stop, eventually, markets will stop them!” Remember Lehman, Bear,Countrywide, Wachovia and Merrill? They did not go out of business. Markets put them out of business. Why? Too much leverage and debt. Where is the most leverage and debt right now? I will have more on this nonsense in the coming days.

 

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

 

IS GREECE THAT IMPORTANT?

The “another life preserver for Greece” has markets feeling it. The EURO is strong which means the DOLLAR is smoked. This has markets juiced as the weak dollar/strong markets correlation continues. Overall, major indices remain in the same multi-month trading range I have been talking about but now, technically, the major averages have a chance to move out of range. Let me remind you that a breakout for major indices above old highs off of a long trading range is huge. A technician could not ask for more. Do not argue with it. I know the news stinks. I know unemployment is high. I know housing remains in a depression. I know Washington continues to destroy the future. I follow markets. They have been known to go against the least possible expectation. I did want to also add that for the first time in a while, financials actually have a bid as again, they get a life preserver when Greece gets one. I still don’t trust a word that comes out of their mouth but have to recognize, they do have an impact on the market. There may just be another leg up for this market…but don’t blink. Important resistance lies at 12753 and then 12876 for the Dow, 1356 and then 1370 for the S&P, 2879 and then 2887 for the NASDAQ and 2819 for the NDX…which is very close right here. Just remember, resistance must be taken out.
Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

 

Test of Stock Blotter

[table id=2 /]

Test 4

Gary:

Looks like it’s working. I will walk you through everything when you have some time.

Eddie

Test 3

Gary:

I am testing something that should allow your subscription posts to get sent via email. If you get this email the test was successful.

Eddie

test email from Eddie

Gary:

I am testing a way to for you to post articles for your subscribers, while simultaneously sending them the same message via email.

If you get this email, it means that my test works because all I did was post this article to the site.

Eddie

P.S. It looks easy and you may be wondering why I didn’t figure this out months ago. Well, I did tons of research and this method simply didn’t exist back in April.

TROUBLING ACTION IN MANY AREAS

Greetings from Venice, Italy. Wow…quite the amazing place. In the past 2 weeks, my family and I have traveled to Barcelona, Naples, Rome, Florence and the Amalfi Coast. Having a blast. You must…you must…you must visit these great cities. Finishing the trip off in London before coming back home.

Lots going on since I have been gone…just continues to be the mother of all news-driven markets. Taxes, debt, Italy, Greece and on and on. It never stops. One would think the DOW would be at 7,000 by now with all the “bad news” that is out there. The fact that the major averages were just near recent highs amazes me.

We head into a big earning’s season next week so pay attention. Before I left, my last few reports were becoming more positive. This was based on long-term moving averages and support holding. On top of this, I liked that many growth leaders were turning up. So while long-term support held, the top of the range is acting as a strong ceiling. The main reason major averages can’t break out is that there remains too many areas in poor shape…that if not resolved to the better, should come back to haunt the market.

I am worried about the SEMIS. They are imploding again as the SOX could only rally back up into the 50 day. They were smoked in past days on worsening outlooks. Those that know me know that I put major importance on this group.

I continue to be worried about the FINANCIALS. I must repeat…THEY CONTINUE TO ACT LIKE IT IS 07 ALL OVER AGAIN. In fact, many important big names are near or at recent lows…some yearly lows. This is very important and bears watching. Just take a gander at MS ,GS, BAC, BK, WFC, JPM and many others.

I am worried about many countries around the world not only lagging but breaking down…some badly. Take a look at the charts of ETFs like FXI, EWZ, EWG ,EWH representing places like CHINA,BRAZIL,GERMANY and HONG KONG. Many others look the same.

I do not like that I have seen in recent days many failed breakouts.

I am not thrilled that the S&P is back below the 50 day. I am not thrilled that we are already seeing higher volume selling in the market.

To recap, long term support held…but a move back into recent highs was smacked down. There remains very worrisome underneath-the-surface action while all this is going on. This remains the toughest of all markets. A market that gaps up one day and gaps down the next day. A market that is still in a trading range that goes back 6-7 months. A market that simply drives many up a wall. Should be quite an interesting earning’s season.

 

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

THE WEEK STILL ROLLING

A very strong and much better-than-expected PMI has the juices still flowing. All good news. Recent action should serve as a lesson as you never know what can come of a market putting in a low or putting in a high. Just to backtrack…last Friday, I wrote that major averages were on the cusp of breaking long-term support and needed to put in a goal-line stand. As the week moved forward, it got easier and easier to say the hold of long-term support was getting stronger and stronger. Knowing this, I even started buying. Based on what I am seeing, the 200 day is a definitive hold now. Anything can happen in this nutty world, but for me, odds favor the recent lows will not be violated in the short term. The internals and technicals are that much better. Important DOW names like IBM,MMM,UTX have turned the corner racing up their right side. The same goes for many sectors of the market.Keep in mind, there is still plenty of resistance. There are still plenty of uglies…so my best guess in the near-term is that this now very overbought market will soon start spending some time consolidating recent gains before attempting higher prices. I am not in the camp that the market is just going to break out to new highs. Resistance must be worked through.

Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.