JUST LETTING YOU KNOW
How This is Possible
Yesterday and Wednesday, I reported to you something very simple (without telling you to do anything):
The Russell 2000 broke out of a two-year base.
The New Your Stock Exchange broke out of a two-year base.
The Smallcaps broke out of a two-year base. The Mid-caps broke out of a two-year base. The Financials broke out again. Airlines broke out. Autos, commodities put in bottoms. Foreign markets leading.
And nothing has changed. Now I want to make sure you know a couple things. Very important.
I abhor…I hate…I despise…I am sick over the news and the direction of this country. I hate everything about Washington DC right now.
When I say to you they are bankrupting this country, I mean it. It should not take a rocket scientist to understand that they do not even care about cutting spending – and all they care about is raising taxes.
Employment is not very good. The fake unemployment figure came out today at 7.8%. Here again is a chart I put up yesterday of how many people have been taken off and out of the workforce, which enables the employment rate to come down.
If you added back just half the people that they say have come out of the workforce, my guess is that we’d be at 9.7%.
If you put back everybody –11% and change.
And I don’t make this up. And I emailed the Bureau of Labor Statistics to ask if I could have that list of people that have come out of the workforce. They don’t have a list. That’s the email I got back from them. They don’t have a list.
I hate what they’re doing on taxes and the President’s already said he’s coming back at us for higher taxes.
The Republicons didn’t do anything about it. Remember they were supposed to do this balance of spending and taxes? There were no spending cuts. The President’s out saying he cut a trillion dollars in spending and the corrupt lapdog con artist media that’s on its back with the paws in the air and their tongues wagging don’t ask, “What trillion dollars are you talking about?”
So the outcome is, we’re going to be at $21…$22 trillion in debt over the news few years, if not more.
And if interest rates go higher, the cost to fund that debt is going to keep going higher. Taxes are going to go up. They do absolutely nothing for nobody. They don’t help the middle class. They don’t help the poor.
And all they have going for them is us — that we care and go to work every day. Imagine if we work out one day on a business day and we told these people in Washington, “We not going to work until you have a budget plan that balances the budget and we’ll give you some leeway o er a 5-year period.”
Do you they’d start getting it done?
I may have to start that movement. We’re just going to go work today. Of course, that ain’t happening.
Why am I saying this? Because for me all the news stinks. Counties in Europe are in recession. But those same countries…their markets are into new yearly high ground. How can this be? It can’t be.
Now I know there are the perma-bulls out there. You have to be careful there. You know the strategists that come out and tell you what’s going to happen in the next year. They’re always bullish. They tell you the market’s going to be up 8% to 15%. And it’s all going to be good and great and wonderful. We try not to pay attention to them. Because there are some out there that still have 1700 price targets for the year 2000.
So why am I bringing this all up? Because in spite of this, to repeat: The Russell 2000 broke out of a two-base off a big gap triggered by the approval of the Fiscal Stiff. The Transports broke out of a one-year base and above resistance.
They’re not at the high yet, but getting there. Smallcaps, mid-caps broke out.
Now the Nasdaq and the Nasdaq-100 are doing the opposite of what they did at the beginning of the year. They’re lagging? Why? One stock. Apple is making the Nasdaq and the Nasdaq-100 lag. It is that poor. And you need to know that. And it’s an amazing thing to see.
Financials, strong. Oils now turning the corner. Industrials, paper, stuff – breaking into new high ground.
So I’ve gotten a hundred emails: How is this possible?
Well my opinion is that it’s due to the money printing around the globe. Because it’s not just us anymore.
And just so you know, the day Japan said they were going to print money, Japan started skyrocketing.
The day Europe said they were going to print money, Europe started going up.
Obviously, Bernanke got them in a meeting and they’re following suit because it worked for us for three years. Now we started QE 3 or 4 (whatever the number is) in September and the market didn’t react well. So the Fed came out with another one.
That’s what I think is going on here. When you have a fixed asset as a market, but you add trilllions of dollars that chase that fixed asset – the fixed assets going up in price.
That’s what I see.
But back to the point – I’m just reporting to you what’s happened. You have two-year base breakouts in all these areas. Now mind you, coming into the new year, we didn’t know about Fiscal Stiff and what they were going to do. And the market was getting into trouble.
And then coming into this week, we found out in the middle of the day that it looked like the deal would get done and the market had a good day on Monday. It gapped up 200 points on Wednesday. There’s been no give-back and underneath the surface, the market has been much better than the averages.
So I’m just reporting this to you.
They lied to you.
Hey, just want to let you know. All those promises that taxes were only going to be raised on the privileged few…you know those dirty lowdown dogs of people that earn too much money.
In case you didn’t know, the worker’s share of the Social Security payroll tax is going from 4.2% back to 6.2%. How’s that?
For a family making $50,000 a year – your taxes just went up 1%.
If you make $110,000 that’s the max out…$2200 bucks.
You voted for this kids. Remember what I’ve called this. It is nothing more than a 3-card monte con game by the greatest con-artist in history – all of our politicians. That’s how you get to $16 trillion in debt and are convinced everything’s going to be fine. And the scum cakes in the media hear no evil, speak no evil and see no evil because their guy’s leading the show.
So good job with your votes! Your taxes have been raised from dollar one. Yes, you middle class. And yes, you the “under the middle class.”
But the market doesn’t care right now.
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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.