A MUST READ LETTER TO THE PRESIDENT

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It is with a great sense of disappointment that I write this. Like many others, I hoped that your election would bring a salutary change of direction to the country, despite what more than a few feared was an overly aggressive social agenda. And I cannot credibly blame you for the economic mess that you inherited, even if the policy response on your watch has been profligate and largely ineffectual. (You did not, after all, invent TARP.) I understand that when surrounded by cries of “the end of the world as we know it is nigh,” even the strongest of minds may have a tendency to shoot first and aim later in a well-intended effort to stave off the predicted apocalypse.

But what I can justifiably hold you accountable for is your and your minions’ role in setting the tenor of the rancorous debate now roiling us that smacks of what so many have characterized as “class warfare.”

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SOURCE: http://www.nypost.com

MORE FABULOUS GOVERNMENT DECISION-MAKING!

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On Thursday, Dec. 1, the city’s de facto ban of the Happy Meal commences. San Francisco has accomplished what the Hamburglar could not. Or has it?

In order to include a toy with a meal, restaurants must now comply with city-generated nutritional standards.

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SOURCE

DIDNT KNOW YOU COULD GO BELOW ZZZ

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Standard & Poor’s on Tuesday cut its credit ratings for many of the world’s largest banks, including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS) and Bank of America (NYSE: BAC).

The move follows S&P’s shift, announced earlier this month, in the methods it uses for rating the banks.

Citigroup, Goldman Sachs and Bank of America Corp. each had their long-term credit rating downgraded a single notch to A- from A. Similar cuts were applied to JPMorgan Chase (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC) and Morgan Stanley (NYSE: MS).

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Source: http://www.foxbusiness.com

DID I TELL YOU? I AM TELLING TIGER WOODS HOW TO FIX HIS GOLF SWING!

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President Barack Obama pressed European Union officials on Monday to act quickly and decisively to resolve their sovereign debt crisis, which the White House said was weighing on the U.S. economy.

After meeting European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, Obama said he was keen to see the euro zone crisis end.

“I communicated to them that the United States stands ready to do our part to help them resolve this issue. This is of huge importance to our economy,” Obama, seated next to the EU leaders, told reporters.

A possible step would be for Washington to support more aid to Europe from the International Monetary Fund, where the United States is the biggest shareholder.

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Source: http://www.reuters.com

TONE DEAF DUMMIES!

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U.S. Airways said they are standing by their decision not to refund money for tickets purchased by a woman diagnosed with terminal breast cancer.

Lynn McKain and her family had purchased five round-trip tickets earlier this year to Belize. The dream trip was booked after she had been cleared of breast cancer. However, she was recently diagnosed with stage four breast cancer and her doctor ordered her not to travel, according to a report on WUSA.

When the McKain family asked for a refund on their $4,200 tickets, the airline refused, explaining that the tickets were nonrefundable.

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SOURCE: http://radio.foxnews.com

THIS MAN RAN GOLDMAN AND WAS TREASURY SECRETARY

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Treasury Secretary Henry Paulson stepped off the elevator into the Third Avenue offices of hedge fund Eton Park Capital Management LP in Manhattan. It was July 21, 2008, and market fears were mounting. Four months earlier, Bear Stearns Cos. had sold itself for just $10 a share to JPMorgan Chase & Co. (JPM)

Now, amid tumbling home prices and near-record foreclosures, attention was focused on a new source of contagion: Fannie Mae (FNMA) and Freddie Mac, which together had more than $5 trillion in mortgage-backed securities and other debt outstanding, Bloomberg Markets reports in its January issue.

Paulson had been pushing a plan in Congress to open lines of credit to the two struggling firms and to grant authority for the Treasury Department to buy equity in them. Yet he had told reporters on July 13 that the firms must remain shareholder owned and had testified at a Senate hearing two days later that giving the government new power to intervene made actual intervention improbable.

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Source: http://www.bloomberg.com

GOOD RIDDANCE!

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Good riddance! One of the culprits who have brought us to the brink. Defended Fannie and Freddie to the wall…but now disavows. But don’t worry Barney. You will now become the head of Goldman, Citi or a high paid lobbyist.

Longtime Rep. Barney Frank, D-Mass., will announce his retirement Monday at an afternoon press conference in Newton, Mass.

The 16-term lawmaker, whose name is emblazoned on the banking reform law that passed Congress last year, had long been rumored to be ready for retirement. He was previously chairman of the House Financial Services Committee but is now ranking member since Democrats lost the majority in the 2010 midterm election.

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Source: http://www.foxnews.com

HORRIBLE ACTION BUT BEYOND OVERSOLD!

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On November 9th, I wrote this:

“Take away all the noise. Take away the resignations in Europe. Take away the TARP. Take away the printing of money. Take everything away. The most important thing I am seeing right now is a potential wall being built at the 1250-1280 S&P area. Take a look at the vicious selling on 10/31 and 11/1 combined with today’s early action and you have nothing more than the potential for serious resistance shaping up at these levels. If that’s the case, I expect to see some tough sledding in the near term. Already, I am seeing some of the weaker areas shaping troublesome charts. Nonetheless, this market is going to remain a tough proposition on a daily basis. That has not changed.”

On November 15th, I wrote this:

“On top of that, markets are sitting in a very nice triangle pattern here. The midpoint is at about the 1255 S&P area. One good up day takes the market above the triangle. Of course, one bad down day takes you down below the triangle…but with seasonal strength, hoping for the upside. Of course, don’t blink as this remains one of the toughest market environments I have experienced. Resistance remains in the 1250-1280 S&P area…with the financials remaining an anchor while the semis continue to provide some wind.”

And on November 17th, I wrote this:

“The triangle pattern, which had tightened up in the past few days, is now resolving itself to the downside. This is occurring as the all-important semiconductor index looks to be topping. Many past growth leaders look to be completing major tops including the likes of Apple, Bidu, Amazon, Priceline and others. The financials continue to lead down…and in a very bad way. Lastly, the NDX has sliced through the 50-day moving average with the Nasdaq right behind.”

Since, the market has been trashed.  Major averages have dumped about another 5% since the triangle broke. Now what?

There is not much good I can come up with. Technically, nothing but a horror show as just about everything has broke support. The good news is that this period of time into the end of the year has had a great reputation for being an up period but so far, nothing doing. But one must be aware of the fact that seasonality is on the market’s side. At the same time, markets are stretched, extended and oversold into this time window. Markets may be about as oversold as they were back on October 4th…so be aware. Of course, be aware that this remains an amazingly, news-driven environment, more than I have seen in ages. I do not expect that to change…especially out of Europe which seems to have the “save of the day!”

But that’s it for the good news.

Major indices failed in and around the 200-day average…a place that defines bull and bear for me. On top of this, they all have now broke back below the 50 day average.

The new low list has picked up markedly…before the major indices have hit new lows….not a thrilling sign. The new high list never really expanded on the way up.

Foreign markets remain much worse than our markets. This is an important sign of continued trouble. Typically, foreign markets lead both up and down as they are less liquid than ours.

My proprietary percentage of how many stocks are in good shape has dropped to about 20%…a sickly amount. It is much worse on the sector front  As of this second, I have only a handful of sectors in good shape…led by Tobacco and discount retailers….which are defensive.

As I have told you on several occasions, most of the big leading growth stocks have now put in major tops.  There are not many better indicators than following past growth leaders.

The SOX is in freefall. This is another area that have led markets both up and down.

Financials continue to have no bid….and continue to have insider selling down at recent lows.

Not much to chew on. It is what it is. It really doesn’t matter what you call it. Again, the near-term good news is that the market is way beyond oversold in here as it heads into the midst of seasonal strength. I will be watching to see if we get any strength in here. I will know a lot more about how the market bounces but be warned, if the market cannot turn up nicely into December, I am already thinking about January being a doozy.

 

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.

CONTINUED TAXPAYER ROBBERY…PAYING FOR OTHER’S FAILURES

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Hundreds of workers who were laid off by the bankrupt solar firm that received $528 million in taxpayer support are eligible for additional federal aid, the Labor Department has ruled.

The potential benefits for laid-off Solyndra workers would fall under a program known as “trade adjustment assistance.” The taxpayer-backed benefits are supposed to help workers who lost their jobs presumably because production was shifted overseas.

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Source: http://www.foxnews.com