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Thursday,
February 12, 2009
(Cont'd from
above)...
Jim (cont'd):
The big money
traders have been
pushing every since
IBM (IBM)
has reported a
better than expected
quarter… to know
that we are getting
a chance to sell
higher than we
should… right now we
are here… house of
pleasure… but this
is the real address…
the house of pain…
just like the
Emperor’s new
clothes
in the fairy tale…
neither of these
pillars is real…
that is why they
can’t bear any wait…
it is why the market
remains treacherous…
hey, maybe I am
Sampson, pulling
down both pillars
tonight… I mean, I
had my hair cut a
couple of years ago…
this is exactly how
I like it by the
way… Sampson is
saying that we got
lucky today with a
nice recovery… that
if it continues… it
will be a beautiful
register ringing
moment again given
the shakiness of the
edifice underneath.
Let’s look at the
stimulus package
that Congress has
given us… because
our failure to pass
a real plan that
deals with creating
real jobs… and with
getting rid of the
housing inventory
has put once again
the possibility of a
garden variety
depression… if not
necessarily a real
one… right back on
the red hot griddle…
Congress, to put it
simply… has sold a
false bill of goods…
now if you were to
believe what is in
the papers… holy
cow, except for the
funny papers… you
would believe that
this package is
wonderful… look at
the front page of
the New York Times
today, I love this…
Measuring Victory by
this guy Stephenson…
he is a famous guy,
you know… it is not
a Robert Lewis
Stephenson, he is a
Richard W.
Stephenson… he
writes… it is like a
comedy routine… it
is a quick sweet
victory for the new
President, and
potentially a
historic one… who
edits this B.S....
the only thing
historic here is how
useless this package
is when it comes to
confronting any of
our serious
problems… Congress
passed a pastiche of
tax cuts and pork
laden handouts to
state governments…
great it will help
my municipal bond
portfolio… tell me
what does it do to
solve housing… what
does it do to solve
unemployment… how
about the ever
hideous banking
crisis… no.
Anyone who follows
the economy knows
that the stimulus
package is a total
and utter joke…
Congress…. okay I am
a diplomat, and
elder statesman and
gentleman farmer in
the mold of Thomas
Jefferson… with a
little Frank Lesser
mixed in… and all I
say is these guys
are dolls they are
just plain clueless…
look at the problems
that we are facing…
the commercial real
estate market that
has totally
disappeared… the
commercial real
estate mortgages
that come due this
year will most
likely not be able
to roll over… even
if the buildings are
almost fully rented…
another crisis
coming… the same
goes for the last of
those great June
28th rollovers that
come due this year…
the Ault-A
rollovers… they are
not going to be able
to refinance… there
is an official
realty track… it is
the most definitive
organization of the
real estate numbers…
the steep drop in
foreclosures it
claims, and I agree,
was temporary… most
likely caused by
deferred
foreclosures from
Fannie and Freddie…
the real foreclosure
rate as represented
by the voracious
unbelievable
servicers… who work
for those vicious
CEO’s… who boot
people out of their
homes regularly to
satisfy the hedge
fund managers who
own those bonds…
well according to
Realty Track we are
going much higher…
much higher in
foreclosures… and
that is where most
of the crummy
mortgages live.
Hey so how does
Congress respond to
the foreclosure
crisis in its
stimulus package…
with a solution that
is about as
efficacious as an
invisible garment…
it adds $500 to the
tax credit for first
time home buyers…
$500, I got that in
my pocket for
heavens sake… yeah,
I am sure that will
do a world of good…
everyone in the
press is pretending
this package is
wonderful… but in
reality it is just
as substantial as
the Emperor's new
clothes… maybe as
stock guru and
Cramer fave Shawn
Tell says… yes, man…
with nothing but a
t-shirt on… and
maybe some Jimmy
Shoes with that
excellent toe
cleavage… when it
comes to stemming
the tide of
foreclosures or
creating new jobs…
and believe me
unless we create
some new jobs… the
mortgage businesses
of the major banks
will trigger… I hate
to even say it… I
will not single them
out… large scale
bank failures… the
ones by the way that
won’t pass the
stress test of Tim
Geithner… Congress
had its chance… no
the stimulus package
has come and gone
and it contains no
help whatsoever… for
the real pressing
problems of our
economy… Nancy
Pelosi, proud of
yourself.
So what do we have
to hang our hats on
now that we have
been given a
stimulus package
that has no
stimulus… now that
Congress panted the
US economy… other
than the usual
suspects… I am going
back to them because
they are going to
work… but you are
going to sell into
any rally that we
get tomorrow… the
accidental high
yielders and
recession resistant
stocks… like
Coke (KO)…
we call it knockout…
knockout reported an
unbelievable quarter
and went up… I mean
that is what I am
looking for… we also
got a tech rally…
that is
phantasmagoric… I
got that word from
Edgar Allen Poe… it
is phantasmagoric as
the stimulus
package… if you own
any of the tech
stocks that have
moved higher… come
on…. time to take
profits… even Cramer
sainted,
Google, Inc. (GOOG)…
that is right… ring
the register… even
if you don’t have
gains to quote
economist and John
Maynard Kane’s
Accolade Mergatroid…
exit stage right...
stick with the
recession resisters…
as opposed to Cramer
anti-fave war
resisters… and
accidental high
yielders… they
rallied the hardest
today… that is your
opportunity.
If you believe in
the reality of the
tech rally… you will
get burned… third
degree ones… just
like the ones that
you are in for if
you really believe
in the realty of the
stimulus… now the
rally began, the
tech rally, when IBM
reported a better
than expected
quarter… it was… it
continued when the
semi-conductors
rallied for
absolutely no reason
whatsoever… it
accelerated when
Research
In Motion (RIMM)
and
Apple (AAPL) exploded
higher… the latter
for real reasons
despite Steve Jobs’
illness…. it went
still higher after
Amazon.com (AMZN)’s fantastic
quarter… and
Google’s 20% ramp…
finally the coup de
ta for tech
skeptics and tech
bears came when
Cisco
(CSCO*) reported just
an okay number and a
pretty dismal
outlook… and the
Nasdaq went up
anyway… that was
wrong… wrong… the
only real growth
area in tech is in
smart phones… and we
have seen Apple and
Research In Motion
go up about as far
as they can…
especially given the
softness in RIMM…
Amazon evaluation it
is now bloated… same
goes for Google, I
just cannot pay up
here for Google… I
don’t know how you
can justify a 20%
increase in the face
of a much worse ad
market than last
year… I can’t… and I
am a huge Google
fan.
Money managers who
own these stocks
want to see them go
higher… the tech
bulls are trying to
keep the balls in
the air… maybe they
will succeed… but
based on the
fundamentals I don’t
want you to risk it…
IBM was an
aberration…Apple
good, but not this
good… Google, okay
but not this okay…
Intel and Microsoft
have nothing special
going for them at
all… I have to
believe John
Chambers, the CEO of
Cisco, and a darn
good basketball
player… when he said
things just aren’t
so hot… there are
just so many more
reasons to sell the
semi-conductors, and
the PC’s, and the
cell phones and
everything that goes
into them than there
is reason to buy.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
Look, how much do I
want to be
constructive… but I
look at the stimulus
package that is
supposed to be so
great according to
the press… and I
look at the tech
rally that so many
money managers are
pushing… and I see
just one more
selling opportunity
into the strength of
tomorrow mornings
market.
I want to be
constructive, but
looking at the
stimulus and the
tech rally, I see
nothing...
I can’t sugar coat
things anymore… the
stimulus package and
the tech rally are
just not that great…
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
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Q:
The question that I
have is about this
bacon wrapped
porkulus bill, which
is going to pass
most likely in the
next 48 hours. Do
you believe that the
stock market will
crash, because of
the simple fact that
every time it is
mentioned in the
media, the market
drops 3 digits?
Jim:
No, you know look…
the spam filled
package is nothing
great… but it
actually is going to
forment a little
upward rally again…
I want people to buy
stocks that work
when the economy is
not picking up… I
want people to buy
stocks that have
come down so much
that their yields
are good… it worked
for Nucor… it worked
for US Steel… it
worked for many of
the companies… it
worked for VF Corp…
it worked for Eaton…
this strategy is
working… but as they
rally you have got
to be able to take
them off the table…
so you have got to
be able to buy them
back when they go
down… that is all I
know… I am sticking
by it.
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Q:
Financials,
Bank of Montreal (BMO),
I know it is being
hit by all that
everything is going
on, do I hold, do I
sell, I need you?
Jim:
I am not
recommending any
other bank stocks on
this show other than
Goldman Sachs and
Morgan Stanley…
other than those two
I am not going to
stick my neck out
right now until I
see more… I do
think, and I know it
is quite a surprise…
I mentioned it the
other day and I have
a good piece in New
York Mag, NYMAG.com…
that was just
posted….
www.nymag.com….
which explains why I
think the Geithner
plan is good… and no
one disliked
Geithner more than I
did… now everyone
has jumped on the
band wagon… people
slap me on the back,
saying boy did you
know Geithner… you
were so right, he is
a fraud, he is a
charlatan, he is a
malc bunk…. read my
piece… he isn’t… he
actually has gotten
religion… he has
made the journey… he
went from being a
guy who really
didn’t know
anything… to be a
guy who has figured
it out… he is two
thumbs up.
[verbatim recap]
[end of segment]
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