SLOW CRASH!

CLASSIC TOPPING PROCESS LEADS TO CLASSIC MARKET TOP… LEADS TO SLOW CRASH!

By Gary Kaltbaum
President, Kaltbaum Capital Management
Fox News Business Contributor

Unfortunately, the process has led to the market top of consequence that we thought was occurring. Now we are seeing the market ‘event” that we were worried about. We do not like using the other word.

Keep in mind, the past two meltdowns were caused by excessively easy monetary policy…which caused massive “over-leverage” of the one-sided trade. The Fed has again been successful at setting those conditions as you are seeing the “over-leverage” just start to come off.

At this juncture, somewhere in here has to be some sort of relief rally but notice under these conditions, the rallies only last a few hours. We keep our fingers crossed now that a panic of some sort does not occur but cannot rule it out as the conditions for such are out there. In any case, the market is in definitive bearish form that should not be toyed with.

We are no Milton Friedman but we have to believe the market is forecasting a global slowdown if not outright recession. The printing of money did nothing but interfere with free markets and an economy that should be left alone. The grand experiment employed by the few who have no faith in the US economy, an economy that has thrived for so long, has once again distorted price and yield which gave rise to too much leverage for the third time in 15 years. When will they learn their lesson? And we are only a few percent off the highs.

Add in a feckless administration…and you fill in this blank.

We expect the Fed to intervene in some fashion if things worsen. Yippee!