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DO NOT FORGET THE CENTRAL BANKS!

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DO NOT FORGET THE CENTRAL BANKS!

As bad as the internals and technicals looked, the markets have again been juiced by central banks. Most cannot fathom that we are not dealing with central banks of the past in which they would lower rates by a quarter point. You now have central banks at 0% rates so not much to do there. What are their discussions? How many trillions of money to print! This money printing has staved off bear markets for the past 5 years…and may be doing it again. To repeat, we are not dealing with the norm. TRILLIONS do move markets and they know it. There is no doubt that there will be one day where markets are inflated so much, that regardless of central banks, they have had enough. Maybe we are there…maybe we are not.

We suspect after this recent “V’ shaped move up, we would get some backing and filling. That looks like it started today but we believe more upside could be had. Momentum is momentum. Do keep in mind there remains a clear lack of leadership but as you know, leadership can show up. We continue to be in the midst of earning’s season where we expect a lot of jello to move on the plate. Stay ready!


The Reason for the Fake Unemployment Rate!

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The Reason for the Fake Unemployment Rate!


Remember this name a couple years from now: Mel Watt!

Mel-Watt

Remember this name a couple years from now: Mel Watt!

We break away from our regularly scheduled program on the markets…as we are back to…”they are never going down again!” Actually, we told you we would bounce but as usual, this is more than a bounce as Central Banks around the globe, in a coordinated effort, have juiced markets again. Very simply, they have not lost the ability to goose the markets, even out of freefall.

Mel Watt is the newly appointed Federal Housing Finance Agency Director. Here is a little backround on Mr.Watt. In the past, he pushed government programs to help welfare recipients buy homes. He also was a part of the fabulous programs allowing borrowers with poor credit to buy homes with no down payment. We know what happened from there. Of course, no blame! The financial system was crushed when millions of bad borrowers defaulted on their loans. We have blamed the Fed, the borrowers, the financial institutions and the creators of these assinine programs.

In 2002, Watt teamed up with Freddie Mac and Fannie Mae, Bank of America, BB&T, and UJAMMA Inc., to announce Pathways to Homeownership, a pilot initiative designed to give home loans to welfare recipients.

Fast forward to today. Mr. Watt, with his infinite wisdom and clear lack of memory, now has his agency working with Fannie and Freddie again…and to do what? In order “TO INCREASE ACCESS FOR CREDIT-WORTHY BUT LOWER-WEALTH BORROWERS” his agency is going “TO DEVELOP SENSIBLE AND RESPONSIBLE GUIDELINES FOR MORTGAGES WITH LOAN-TO-VALUE- RATIOS BETWEEN 95 AND 97%!” Yes, Mr. Watt is back to putting the taxpayer on the line again for the same type of loans that almost destroyed the financial system to the same type of borrowers…and all this AFTER HOUSING PRICES HAVE RECOVERED because of the maniacal Fed. No worries…Fannie and Freddie were only rescued to the tune of $188 billion. No worries, housing prices will never fall again as the Fed will print money forever. No worries that just a 3-5% decline on a loan would again put the mortgage holder under water.

We have told you forever that if bad behavior and bad policy are not punished, they will be repeated. Most politicians know it is not their money on the line…so who gives a crap? You are on notice. If this goes through, you will be hearing about another housing/loan disaster going forward. We will remember Mr. Watt. We doubt anyone else will.


Oversold + Central Banks=Rally

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Oversold + Central Banks=Rally

We told you to expect a rally/bounce from some of the most stretched, extended and oversold conditions we have seen in a long while. But it is again “V” shaped as the central banks do not stop and do not stop talking. Since the lows:

We got 3 Fedheads out yapping about not lowering QE and actually hinting at more QE. That turned the markets to the second.

China adding another $30 billion stimulus.

Japan hinting at a 25% stock rebalancing in the pension fund(because Japanese markets have done so well past 25 years.)

ECB saying “buying” will start soon…

Which lead to the rumor that turned the futures this morning that the ECB is looking to buy corporate bonds in the secondary market. Of course, Reuters kinda sorta already walking that one back.

Markets are now, already into a massive area of resistance in which massive breakdowns occurred. We expect some choppiness in these areas but in a market that continues to be juiced by the few, one never knows.

The lows look good for now as the powers that be woke up and recognized that things are getting hairy and that there is an election ahead. “What? You don’t think they are rigging things?

Economies around the globe are sinking. Credit spreads have been blowing out. Demand has been heading south…but markets love bad news as it gives the boys the excuse to continue their money printing.


Anyone not think Fed is targeting markets?

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Anyone not think Fed is targeting markets?

SOURCE: http://www.zerohedge.com/news/2014-10-20/feds-comfort-zone-1-simple-chart


The Obama Administration “Control” Chart

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The Obama Administration “Control” Chart


Radio

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Investors Edge – 10/23/2014 Hour 1

Investors Edge – Hour 1 Listen to todays show by clicking here.

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Investors Edge – 10/22/2014 Hour 1

Investors Edge – Hour 1 Listen to todays show by clicking here.

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Investors Edge – 10/21/2014 Hour 1

Investors Edge – Hour 1 Listen to todays show by clicking here.

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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.

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