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Thursday,
April 2, 2009
(Cont'd from
above)...
Jim (cont'd):
This market smells
like Pamplona… you
cannot be a bear
here… or you know
what is going to
happen… you will be
run over and maybe
gored by the bovine
stampede… we have
finally reached the
land of the 1000
bull dances… phony
morony… why… because
the market has
swallowed it Prozec…
and right now, right
here on this show… I
am announcing the
depression over… but
I don’t think the
fact is baked into
the stock prices
yet… most investors
are still leaning
the wrong way… most
hedge funds are
still short… but
when they come to
realize what we
know… that we have
emerged from our
episode of
depression… perhaps
thru electric shock…
they are going to
have to start…. buy,
buy, buy… I am not
saying that now is
the time to buy hand
over fist… we like
to buy low… and it
doesn’t make sense
to back up the
truck… especially
after a 216 point
day… when I do
expect a terrible
and high
unemployment number…
that will probably
scare people… but
your bias has to be
positive… and you
cannot get freaked
out by big job
losses… because they
are in the rearview
mirror… you can’t
start hiring you
know after you just
lopped off a big
junk of your work
force… give it a
couple of months… it
will get better.
I am not… I am
definitely not
telling you that the
recession has come
to an end… all I am
saying is that we
are back in
recession territory…
as far as I am
concerned, the
recession caused by
the collapse of
housing, started in
August of 2007...
because that is when
I flipped out about
how the credit
markets were falling
apart… but you just
couldn’t see it yet
during my much
youtubed rant on
stop trading… you
know the one where
my kids found out
that I had a show,
because the other
kids at school said
hey listen your dad
has got a show, I
saw him on youtube…
of course, it was
done to Fat Boy
Slim, whoever that
was.
Okay, anyway… the
depression did not
begin until
September of 2008
when Treasury and
the Fed mistakenly
euthanized Lehman…
went into the wrong
hospital ward… and
caused every market
in the world to
basically shut down…
and making America
into a cash economy…
world wide
production rates, in
many cases, went as
low as they were in
the Great
Depression… we had
to throw money at
the banks… just
literally throw
money at the banks…
and save AIG…
because the system
was about to fail…
this created a
deleveraging
process, a term that
we use only to keep
you out of the
equation… that
overwhelmed
everything and
everyone… the credit
markets froze… and
eventually the stock
market… which, as I
told you yesterday,
always follows the
credit markets…
really felt the
brunt of it in
February and March…
I think the
depression ended in
the first week of
March when I
realized that even
if every financial
went under… and most
companies cancelled
their dividends in
the Dow Jones
Average… we only had
about 1000 points
left to drop… so I
urged you to start
buying… even though
I said if you needed
the money at Dow
10,000... when you
are down at 6300 you
can’t hate the
market as much as
you did at 10,000.
What else happened,
let’s see… how about
the fact that
Bernanke got
religion and took
the rates down to
zero… and then he
went even further
offering financing
to investors so they
could buy asset
backed securities…
now auto loans are
picking up because
of the Fed’s asset
backed lending
program… and housing
loans are picking up
because of Fed’s
guarantees… and
fantastically we are
only building
400,000 home a year
now… you know the
last time that we
were building that
few, we had 100
million fewer people
in this country… and
every time house
prices go down 40%…
fires emerge…
mortgage rates are
down… again courtesy
of the Fed.
Tim Geithner’s bank
plan makes credit
available at low
rates for hedge
funds to buy all
kinds of troubled
assets… the stuff
that we used to call
toxic, but we are
banning that term…
from now on we have
to reguard them as
de-toxic… thanks to
the governments
intervention…
collateralized debt
obligations are now
longer in a million
little pieces…
having graduated
clean from Hazelton…
we no longer fear
wide spread
nationalization of
the banks… the plan
that the Professor
and Mary Ann…
Nouriel Roubini and
Paul Krugman, pushed
endlessly… and
absolutely no one
could fight this Fed
which is absolutely
dead set on saving
the economy…
Bernanke is using
every weapon in his
arsenal… biological,
chemical, nukes… not
even Jack Bauer
could stop Ben
Bernanke.
And then today we
got the second big
positive… President
Obama praised… what
did he praise… the
stock market… this
is a total 180 from
his position just a
few months ago… you
have to admire a
President that can
change his mind…
especially after 8
years of George W.
Bush’s lazy fair
philosophy… which
almost lead
repagious late stage
capitalism to devour
itself… remember
this Obama
news clip of Obama “
There will be time
for them to make
profits and there
will be time for
them to get bonuses.
Now is not that
time.”
Remember this one:
news clip of Obama “
The stock market is
sort of like a
tracking poll in
politics. You know
it bops up and down
day to day. And if
you spend all of
your time worrying
about that, then you
are probably going
to get the long term
strategy wrong.”
I see no trace of
that Obama now…
today he called the
market the great
wealth creater…
clip of Obama: “If
anybody had been
studying history,
they would have
understand earlier,
is that the market
is the most
effective mechanism
for creating wealth
and distributing
resources to produce
goods and services
that history has
ever known.”
Now is the winter of
our discontent… made
glorious summer by
the son of Chicago…
the depression is
over and know we
have a President who
has gone from bear
in chief, to bull in
chief… and that is
why we know like
him… he has changed
his geneious, if not
his philia… we keep
ours… and now Obama
knows that he kills
your 401K, IRA, and
529 plan he can’t
make it up by taking
some money from the
rich and just giving
everybody a g or
two… when it comes
to the stock market,
like it or not, the
people are all in
and now President
Obama knows it… he
is on our side… and
Bernanke is on our
side… and Geithner
is on our side two…
with his fabulous
public private
banking plan… no
more Keebler elf
jokes… no more Mr.
Spock jokes… this
guy Geithner has got
us living long and
prospering.
Here is the bottom
line…
▼ ▼
▼ ▼
▼
 The Bottom Line!:
There is no doubt
that the depression
is over… it ended in
the beginning of
March when Obama got
on board with the
unstoppable trillion
dollar man Ben
Bernanke… and Tim,
50 bizzillion cent
Geithner… and the
market went so low
it almost ran out of
downside… and now
that we know this… I
think you got to
wait, you got to
buy, wait for a
little pullback
definitely, do your
homework… but buy
all the same because
the financial Prozac
is not yet priced
into the market... I
think the depression
is over, but
continue to buy with
caution.
[verbatim recap]
▼ ▼
▼ ▼
▼
Jim went on after
this segment to take
questions from
callers, and
responded with his
comments...
```````````````````````````````````````````````````````````````````````````````````
Q:
Last September
Lehman filed for
bankruptcy and
triggered a run on
the money market
funds. Will the same
thing happen with a
GM bankruptcy?
Jim:
No, GM is not too
big to fail… GM is
while… I think that
Steve Ratnor, who is
the auto-czar, knows
and understands that
what is good for GM
may actually be bad
for the country at
this point… I have a
depiction of what
will happen with GM…
I think the common
stock will go to the
unions… I think they
run the company…
some would say that
this is Betroskite…
that is because I
tried to get a
masters in
communism… I am
taking that off the
table… no more
communist references
unless it is related
to my
great-great-grand
uncle Vladimir
Lenin… I think that
GM could be let go
and it doesn’t even
matter… bond holders
get crammed down…
union get the common
stock… and everybody
goes home happy…
well, not the bond
holders.
```````````````````````````````````````````````````````````````````````````````````
Q:
About the bottom
that you called the
other day, I still
feel that with
unemployment rising
and there seems to
be no near
resolution, how can
we have a bottom?
Jim:
Unemployment,
unemployment there
my friend…
unemployment has
never ever, ever
bottomed before the
economy bottomed…
unemployment has
never ever, ever
bottomed before the
stock market
bottomed… it is the
ultimate lack
indicator… people
wait forever… the
bears wait forever
for unemployment to
bottom… and when
they do… they end up
paying too high a
price.
```````````````````````````````````````````````````````````````````````````````````
Q:
On a broader scale,
you say that 50% of
a stocks movement is
based off of its
sector, so what kind
of an analysis of
the sector should we
be doing, to
identify the ones
that are going to
start going up? Or
the ones that are
going to continue to
perform well vs. the
ones that are going
to start going down?
Jim:
First of all I have
to tell you that I
created a false
dichotomy yesterday…
because Whole Foods
is actually a
discretionary play,
not unlike
Whirlpool, or Best
Buy… and Kroger is
actually an
anti-discretionary
play… and that is
why it was such a
complicated
confalusion
conflation of some
great ideas…
however, what we are
looking for right
now obviously… the
consumer
discretionary, and I
keep using Whirlpool
because of our
fortune brands… that
is what moves right
now… that is early
cycle… that is what
happens, that is
what we are seeing…
the early cycles
rally, the drug
stocks come down…
but the rotation is
not so vicious any
more because there
is so much money
being thrown at this
market… and I praise
Ben Bernanke, the
trillion dollar man…
Tim, 50 bizzillion
cent, Geithner… and
our President who
knows that the stock
market is his
friend… and no
longer his enemy.
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[verbatim recap]
[end of segment]
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