08/29/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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https://archives.warpradio.com/btr/InvestorsEdge/082918.mp3

JUST LETTING YOU KNOW

One Man

What’s happened in the past 2 or 3 days? Nothing. The market’s in wait and see mode.

And it’s sickening, as a market person, to have to deal with the things we’re having to deal with. I have to tell you, when it comes to Fed, nobody ever use to talk. Alan Greenspan never used to say a thing. And every month they used to have their meeting and typically they wouldn’t do anything. The only time they would do something is if the economy went into some sort of recession.

If the economy was really slowing down, they’d lower interest rates by a quarter of point…and maybe throw in another quarter the next month…and then the next month. And then as the economy got better, they’d start raising rates to hold off inflation and that was it.

But now, for some reason the tape is has come off the months of all the Fed Heads and on top of that, we have this.

You know what I think the final outcome of all of this is. I don’t know when or where because there’s nothing they’ve ever done that hasn’t created big bubbles because all they do use more debt and leverage and fake money (printed money out of thin air).

And so what we’re waiting for is for Ben Bernanke to do a speech in Jackson Hole, Wyoming. And the expectation is that he is going to announce more printing of dollars that he doesn’t having in order to buy bonds to lower interest rates in order to help the economy, even though the 10-year is already down 1.65 and the 30-year is at 2.76.

And as I have told you, he doesn’t care about the economy at this point in time because he can’t do anything about. His goal is just to get the market up because he thinks if the market goes up, the wealth effect will cause people to feel more rich and they’ll spend more.

But there’s a problem with all of this.

#1, he’s screwing the savers by keeping the rates at zero.

And #2, we don’t know what he’s playing with. No one can even fathom this over the top, monolithic, never before seen in history by the umpteenth power, easy money policy of zero percent rates, the outright printing of money, and manipulating and inferring with biggest market in the world – our bond market.

So we’ll see. What’s happening this week as volume is ridiculously low is:

  1. We’re heading toward Labor Day. It’s the end of the summer. It usually quiets down.
  2. Who the heck wants to commit a dime because if he Bernanke announces a couple trillion bucks, maybe the market rallies. Of maybe the market just changes and shoots a certain finger up at Ben Bernanke and goes down on that news. Or if he does nothing – who knows?

But here’s the problem. Out of the past six days, we’ve had several comments out of Fed Heads. And you what? They all contradicted each other.

Seriously.

  • We’ve had one say, “We’ll nothing’s going to happen just because we have to wait and see more evidence come in.”
  • Another one said, “We haven’t talked about it yet, so we have to see what happens.”
  • Another one said, “Oh yeah, we need to print more money.” (Of course, they don’t use the term “print more money” because those words make them look bad)
  • And Bernanke intimated – didn’t say – but intimated that “We’ll we’re looking at printing more money.

And that’s what everybody’s waiting for.

This is what we have to wait for.

One man.

  • A man who has never ever run a business, had a payroll, was fired, had to fire, or anything that has to do with business. Never been in the markets. Been an academic and a government hack since day one.
  • Been wrong 90% of the time.
  • Missed the whole housing crisis and only reacted after prices were already in depression.
  • Said sub-prime lending was okay – with him and Alan Greenspan.
  • And while things were in a debacle, he was saying things were contained and that the housing market would not affect the economy – until it did.
  • And what was his answer to the problems that we’re caused by too much easing and leverage and debt? MORE EASING AND LEVERAGE AND DEBT.

…because that’s all these people know. Create more money.

So we’ll see. As I have said before, I hope I’m wrong. But I have to tell you something. You see that Internet Bubble and that Housing Bubble?

What we’re seeing in the bond market is going to overshadow those bubbles, like we haven’t seen. That usually the cause and effect of what they’re doing. Of course, everything’s okay right now. Why?

Because as long as the market’s cooperating…we’re good.

But if the market blows up – we’re not good. 

So keep your fingers crossed. We are 12 years into the secular bear market and valuations have come down over those 12 years. And there is a thought process in my mind where if we can get passed these deficits and have some real serious people Washington do something about these their stupidity, that there’s another secular bull market around the corner.

These secular bear markets usually last about 13 to 16 years and we’re entering year 13 in the year 2013.

So we’re watching closely for that.

Why? Because everybody’s so depressed and they’re thinking a depression is coming. Everybody thinks we’re in a recession.

Harry Dent thinks we’re doing to 5,000 on the Dow and he’s been wrong 90% of the time also. Bill Gross, a bond guy says don’t be in equities ever.

That’s good. More and more people are selling mutual and getting the heck out of the market. That’s what happened in the late 1970s and then in 1982 we started an 18 year bull market like we’ve never seen.

So I’m counting and that we’re going to watch closely.  

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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.