September 17, 2007 - This is Insane

How ridiculous is this? How insane is it that we, a supposedly free people, are subject to one man, Ben Bernanke?

How did that happen?

And, no, I'm not going let this go. Today, you got your fill of "debate" and "questions" and "theories" about:

A) Will 'the fed' lower rates?B) If so, how much?C) And, what will 'the fed' say about the economy?D) What if they only lower 1/4 point?E) What if they lower 1/2 a point or more?F) Is this the start of many more rate cuts?

I AM SO SICK OF THIS.

And, all these "bulls" begging for ben bernanke to lower interest rates to "save" the market. It's always funny to listen to the "capitalists" of the world say how a "free market economy" is the "best path to prosperity", but only if the "free market" includes a bailout from "the fed".

The level of "2 plus 2 equals 5" thinking right now makes me think that maybe this is all a bad dream. Check out what Larry Kudlow said on his sitcom today: "Don't you think a 'free market', resilient, durable economy, and global financial systems can absorb this?" (The question was in reply to a guest describing that regardless of how much 'the fed' cuts rates the markets may move up UNTIL the the next 'financial crisis'.)

FREE MARKET? RESILIENT? DURABLE? Yeah, right. This is the same "free market", resilient, and durable economy that Larry says needs a 1/2 point rate cut to the "federal funds target rate" and ANOTHER 3/4 point cut to the "discount rate".

Gotcha.

Now, I'm no PHD. I dropped out of economics 101 in my brief college stint. And, heck, I've never even read one of Jim Cramer's books.

I know, however, that a "free market" does not include an entire economy guessing, debating, hoping, and rolling the dice on whether one man, ben bernanke, decides it's time to make it easier for the last few people not already in debt up to their eyeballs, to mortgage their grandkids' future to buy more plastic junk from China.

No matter how many times you hear a "bull" call for a rate cut, and, extoll the virtues of our "free market", it is still a load of HONKY DONKY.

One big, smelly, messy, pile of HONKY DONKY.

The part that angers me is that there is not a SINGLE counterpoint to these whores. Not one person on CNBC today even raise the question about whether or not it's in our best interest to allow one man, ben bernanke, to hold sway over our entire economy.

Again, I'm not Milton Friedman, or Adam Smith, but I gotta believe it's probably an okay question to ask, right? I mean, there is SOMEONE out there who still believes it's okay to ask questions, right?

Maybe not. I think that the vast ocean of "investors" are oatmeal-loving, swill-swallowing, Cramerites. The doe-like timidity of the average "investor" leaves them in a perpetual state of "buy and hold" because it's just easier that way. You know, the way wall street says to do it.

You think I'm harsh, maybe? If so, that's because you are one of the sheep. To you, I say, "Boo Yah!" (Note, I said "IF SO". Please don't email me to complain that I called YOU a "sheep". But, if you do send me an email complaining that I called you a sheep, then, yes, you are a sheep.)

Speaking of HONKY DONKY, how about ol' Alan Greenspan? What, was today "Alan Greenspan Day"? What a coincidence! CNBC's hype machine about tomorrow's fed meeting just so happens to be in full swing as 60 Minutes airs their interview with "Mr." Greenspan. And, just so happens to coincide with the release of "Mr." Greenspan's new book. And, just happens to coincide with CNBC's own "look" at the "historic" fed chairman in the hour-long special tonight, "Power. Money. The American Dream."

AMERICAN DREAM?

That MONKEY TATER rooked an entire generation of Americans out of THEIR dreams. The way Alan Greenspan's 'fed' jacked up the stock market into "the bubble" of 2000, dropped the market and evaporated trillions of dollars in 'wealth', only to then jam interest rates down to 1% to pump people into a crooked mortgage banking system (and by people, I mean, "anyone with a face, and regardless of credit history, employment record, or citizinship"), ought have gotten his FLOPPY BOTTOM thrown in jail.

Now, we are all going to pay - one way or another - for Alan Greenspan's "American Dream". Except that "dream" is the nightmare of foreclosures, our dollar falling like a rock, and an economy on the precipice as our foreign creditors slowly back away from the teller window at the drive-in bank.

Note: Alan Greenspan is married to NBC's very own "reporter", Andrea Mitchell. So, that "may" have something to do with the love affair CNBC has with "Mr." Greenspan.

By the way, you might have missed the little story about the banks in England and Ireland. Yeah, guess what, one of their banks had a good old fashioned RUN. The culprit? SUBPRIME MORTGAGES. The very same "subprime" that was A) not supposed to be a big deal, B) certainly not going to be a GLOBAL problem, and C) easily contained with a few injections of "liquidity". Here's a link you should read: http://www.bloomberg.com/apps/newspid=20601087&sid=aGYyGu4XZhQ8&refer=home

Pay close attention to that picture of people standing in line to get their money out. That's coming to a bank near you in the US.

You want to know what's going to happen tomorrow? Well, "the bulls" say the market will scream skyward. I've heard nothing to the contrary. So, I'll go with that "thesis".

What will the market do tomorrow? I don't know. Maybe it rockets up. Maybe it rockets down. I'm not psychic, so I can't tell you what happens tomorrow.

The longer-term outlook, though, if "the fed" starts cutting rates is DOWNTOWN, CHARLIE BROWN. Mabye that move starts tomorrow. Maybe next week.

But, start, it will, young Jedi.

I plan to fade whatever move we get TOMORROW. If 'the fed' cuts rates and the market zooms up, I'll be shorting like a madman. If market zooms down, I'll go long. These moves will be for intraday trades.

Hey, maybe none of this means anything to you. I don't know. I'll keep on believing that we NEED a FREE market, we NEED some people with integrity in the media to keep our elected (and, in the case of "the fed", UNELECTED) officials in check, and we need the market to drop before I'll get all bullish and stuff.

I know. I know. Why must I be so "negative"? If you think I'm "negative", you must not remember that I told you these things were coming. Now, that the fun has started, I am not "negative", I am HOPEFUL that some of you will take SOME SORT OF MEASURES to protect your assets.

Good luck tomorrow. Hope to see you in my chat room. I'll be in my live trading room helping people make money no matter WHAT 'the fed' does...

...or doesn't do.

Friday, September 14, 2007 - "Stick This Somewhere Special"

"Stick This Somewhere Special"

I need to clear something up. Right up front. And, I hope you'll print this out and keep it somewhere near your monitor.

"I am not a 'bull'. I am not a 'bear'. I understand the terms 'bull' and 'bear' are phony constructs designed to divide people into two 'black and white' camps when the only camp to be a member of is neither. I buy stock when I want. I sell stock when I want. Also, I am not 'the consumer'. I am not addicted to unwise investments in unnecessary items for my home, family, or business. I believe that debt will keep me enslaved to banks, corporate America, and the government. Therefore, I will do what I can to remove debt from my life. I understand that wall street and the mainstream media job is is to steal my money. They are professional thieves who use tactics which include lies, manipulation of and distortion of 'news'. My job is to disregard these attempts to sway me from my job. My job is to make profits each day for my family and for myself. For, I am a patriot in the truest sense of the word: When I am strong, debt-free, and able to think clearly, without fear, I am able do what's needed for my family and my country."

Okay, now, print that out and stick it somewhere.

Wait, you think I wrote that about me? No. That's for you to read, recite, and live by every day. See, that's my credo. Now, make it yours.

"Questions With Answers"

You may notice that there is a decidely 'bullish' (to use wall street lingo) tone to the markets. The last week's cheerleading sessions on CNBC were top-notch work. I have still not heard one "analyst" or CNBC cast member come out even ask the question, "Is it time to sell your stocks?"

Now, lest you consider me a 'perma bear' (another bit of wall street lingo), understand this: It IS time to at least ASK THE QUESTION about your stocks. Asking questions is healthy, wise, and not a sign of a pre-determined bias.

Alas, 'the question' remains unasked.

Shoot, if you watched "(Fast/On The/Real/Your/Mad) Money" any day this last week, you witnessed a steady stream of "analysts" who say two things: 1) 'the fed' will lower interest rates, and 2) the lowered rates will drive the market higher.

You did not see anything close to an opposing view or counterpoint to these assertions.

This is not a healthy sign. Forget whether you believe the market is about to tank or soar. There is, ahem, at least a debate you should be privy to over whether it's a good time to buy stocks at near record levels under ANY circumstance.

Since the mainstream media won't ask the questions, and wall street pretends the "only question" to ask is, "how many shares can I buy", I'll pose a few questions to you:

1. If the US economy and GDP rose on the back of a marvelous housing market, AND, 'home owners' (see below for more on the mythical 'home owner') got super duper wealthy because 'their' home values and equity skyrocketed, AND that's where 'the consumer' got all the cash to buy stuff from 2003 to 2007, AND GDP is 70% 'consumer spending', AND now all that kick-ass wealth is gone out of the housing market, and 'the consumer' can't pull any more 'equity' out of 'their' home to spend it down at Wal-Mart.... WHAT is going to prop up the economy from 2007 to 2011 (the next 4 years)?
2. What happened to all the 'private equity' deals? Wasn't 'private equity' what was going to prop up the market this year? Remember all the talk about how "...even if 'the consumer' slows down, 'private equity' will save the day because valuations are so cheap at 'these levels'..."? What happened? When was the last "private equity" deal you heard about? (Note: We now know that all that "private equity" money was BORROWED money from banks that now are not in the mood to lend.")
3. When will a falling dollar matter? When the dollar was strong it was used to indicate the amazing strength of our economy. The US was a pillar of economic strength, right? Okay, well, now, what about near-historic lows versus most major currencies? At what point does a weak dollar matter to the market as much as a strong dollar mattered on the way up?
4. What about the price of oil? How long will we be asked to believe that all-time highs on the price of the one commodity to which our economy is addicted and unable to live without, will not have an impact on 'the consumer'? When will the price of oil matter again? If 'the consumer' has to spend more on the gas it takes to get to Wal-Mart, when will that impact the money 'the consumer' spends on the lead-painted, poison-tainted, plastic junk from China he or she buys at Wal-Mart?

These are just some questions you need to ponder. I could give you the answers, but, gee whiz, I'd rather you think for yourself. If you're a "bull", you might not care about these questions. If you're a "bear" you might have said, "no kidding!" while you read them. If you're smart, though, you'll simply ask the questions and look for the answers.

"People aren't Smart"

How about those Ditech commercials? You know the ones. The ones that start with, "People are smart."

See, Ditech uses the same technique politicians use when they say, "The American people are smarter than that."

The truth in both cases is this: If you believe that "People are smart", and, you believe it applies to you, and, it makes you pick up the phone to call Ditech, then...

You ain't real smart.

If you were "smart" you would not need to refinance your home in the first place.

On that note...

Enjoy your day and tell a friend about what I do, please. Your support with a simple forward of this email to a few friends allows me to keep spreading the truth.

Oil, "The Fed", and other Whoppers

"$80 Oil About to Be a Distant Memory"

The price of oil is on the doorstep of $80 per barrel. This $80 level continues to be discussed as some sort of "benchmark" or "psychological level". It's talked up as a "key level of resistance".

Truth is, the price of oil is going one of two places: Up sharply or down sharply.

All this talk of "$80 oil" will be distant memory soon enough. I believe we'll see $100 oil before $50 oil. If I was going to place a bet on oil, it would be up, not down.

Regardless of what you believe, there are two ways you can play oil: Buy USO (if you think oil goes higher) or buy DUG (if you think oil goes lower). Either way, if you pick the winning horse you'll make out like a bandit.

I just don't think the price of oil will hang around $80 for long.

"The 'fed'"

CNBC's recurring character, Joe Kernen, said this morning, "We're now less than a week away from what could be the most important 'fed decision' in years." Joe then asked, "Will you be ready for it?"

I love it. The baloney is thick these days. "could be".

Yes, I suppose the next "fed" meeting "could be" "the most important" in years. Hey, then again, it "could not be", too. I guess. Or, maybe not.

The "most important" "fed" meeting in years will be the LAST "fed" meeting. Of course, you can forget that happening in your life time. There's too much money in the business of stealing from Americans what our founding fathers died for - namely, our own money. But, hey, that's another commentary for another day.

Last night, Jim "the shill" Cramer began the monologue on his canned, scripted, daily fictional account of the markets with, "What a day 'we' had on wall street. The dow jones average up 181 points. You know what it looks like, don't you? Looks like 'the fed's' starting to listen to Cramer - at least for today. That means you need to get some 'offensive players' on 'the field'. You need some 'raw excitement', some 'scoring ability'."

The recurring character of Jim "the shill" Cramer is one in a long line of nuts who want you to buy stocks because 'the fed' will cut rates in a couple weeks. The cavalcade of "analysts", pundits, and CNBC cast members who argue it's time to buy because "the fed" will lower rates in a week grows daily. The character of Jim "the shill" Cramer is not alone in "his" opinions, just the nuttiest nut in the sack.

Oh, how I long for a show on CNBC of my own. One where I would get to be the counterpoint to the points made by the likes of Jim Cramer. My first show would be devoted to the baloney about 'fed' rate cuts.

If I told you that every person on wall street thought something would happen, and that something would guarantee another something would happen, AND, the thing they thought was in the future - AND you could place bets on that thing. Would you place a bet on that thing A) Actually happening, and B) It having the 'guaranteed' effect?

If that "something" was a rate cut by "the fed" and the "guaranteed effect" was that stock prices would soar to new highs, you'd be a fool to bet with dice-rollers like Jim Cramer. The last decade of rate decreases and increases were directly in line with a correlary move in the S&P 500.

It's so obvious that I wonder if the Jim Cramers of the world are just flat out liars. There just cannot be any way an intelligent (read: retarded or higher) person could look at the facts (the real facts, not the made up, trumped up, ginned up poppycock you hear on CNBC) and charts and come to any other conclusion:

Every time they've cut rates in the last decade stocks continued lower. Every time rates were raised, stocks plowed higher.

(Of course, I thought that there was no way George Bush would be re-elected after the first round of lies, Constitution-shredding, and socialist communism.)

So, if you are one of the hundred or so shut-ins, high-schoolers, or "Dear Jim, I've got $500 to 'invest' in my Ameritrade account" who account for what must be his core audience, and you believe rates will be cut, I suggest you do not "back up the truck" and start to buy stocks for "raw excitement" right about now.

Hey, I could be wrong. But, I'll go with a decade of empirical evidence over the "advice" the mainest of the mainstream on this one.

If rates are cut, by the way, they will be cut in an attempt to prop up an ever-weakening US economy. Which, by the way, would be at odds with the last whopper told by the CNBC "task force" in 2006.

The last whopper told by the CNBC "task force" was that you buy stocks in 2007 because the economy was going to be "fantastic" and that the "only question" was "how long" could the "economic nirvana" of the "goldilocks economy" "go on".

The economy is not "fantastic", the "only question" of "how long" the "economic nirvana" would last was answered with a resounding THUD, and as for "goldilocks", well, she's out back servicing some executives from a Chinese Toy company.

Monday, September 10, 2007 - Litmus Test

"Litmus Test"

You have a quandary. You see, not only do I say we are headed in a recession (at best), but now, Jim Cramer, Larry Kudlow, and Erin Burnett (all three recurring characters on the daytime black comedy called, CNBC) say the same thing.

The problem you face is not what you might expect, though. One of my readers emailed tonight to say, "Now that the shills are on the bear side, the market will probably go up on Monday."

I can understand that sentiment. It sounds easy. The logic seems to work: Wall Street shills told us to buy the market because the economy would be great. The economy wasn't great. They were wrong. Now, the same shills are saying the economy is bad. They must be wrong again. Therefore, ergo, thus, and ipso-facto, it must be time to jump in to the market.

There is where you logic would break down.

The Wall Street shills were wrong about the economy. That's public record. No debate. I was 100% correct about the economy, and the Wall Street shills were either wrong or liars (probably a little of both) when they pumped you into stocks based on the glorious US economy.

The part of your logic which would be wrong is that the same shills who pumped you into the market because of the "goldilocks" economy, Ben Bernanke "nailing it", and economic "nirvana", are only saying we are about to (or, in Jim Cramer's case, "are") in a recession. There's no talk of selling stocks yet.

None. I've yet to hear one nutty, CNBCer even pretend that it's time to sell stocks. And, that, my friend, is what we need before we start jumping in.

The fact that I was right about the economy - a fact never in doubt, and never a concern of mine - is obvious. For the charade about the economy to continue much longer would be, well, ridiculous. The fact that the Larry Kudlows of the world admit the obvious is not a sign that it's time to buy stocks. The sign to buy stocks is much farther down the line.

I'll give you a litmus test on when to buy stocks: When Jim Cramer comes out and says it's time to sell Sears Holding (Nasdaq:SHLD), Goldman Sachs (NYSE:GS), or Apple (Nasdaq:AAPL), you'll get your first buying sign.

No fooling. Jim's pumped so many people into those things that he can't push the sell button JUST YET. He'll only tell folks to sell those bloated pigs when they've dropped far enough that the oversold readings are pegged straight down. SHLD is the real indicator to watch, though. Jim was pounding that junker at $195 (Closed Friday near $130) as the "one stock" you should own because it was the "next Berkshire Hathaway". Jim's reputation (I know, I know, don't laugh) is on the line with SHLD. He'll only tell people to sell it out of sheer panic.

And, that's when you'll probably get an email from me saying, "Load the boat."

Look, I don't know what Monday holds. My best guess is that we're looking at huge losses this week ahead. However, that's a guess. An educated guess, sure. But, just a guess.

My advice is for you to take profits in stocks you can right now (read: give losses to someone else!), sell calls on stocks you just can't bear to sell, buy puts on the Dow or Nasdaq, or make sure you have some QID, DXD, SDS, or TWM in your portfolio. Not much of any of these ideas can go a long way to helping you conserve capital or even make money. It's my standard advice, but, there's still time. At the bear minimum, you need to increase your cash position to 25% to 50%.

Remember, that no matter what the shills on CNBC say, there motives remain the same: Keep your butt in your chair, eyes on the screen, and finger off the sell button. (If you sell you are out of the market. If you are out of the market, you don't watch CNBC. If you don't watch CNBC, they don't sell ads to the likes of Ditech or Ameritrade. No ad sales means they can't afford to pay Jim Cramer. No Jim Cramer and they don't have ANY VIEWERS. Shoot, when Fox takes Jim, CNBC is done anyway.) So, like I said, they gotta keep you happy, upbeat, and buying all the time...

...until they get the word from their pimps on Wall Street that it's time to start pushing people out. When you hear Erin Burnett ask, "So, is this a bear market," or, "Is it time to add QID to your portfolio," you'll know it's just about time to get jump in with both feet.

Not there yet. Not there by a long shot. All this new "bear" talk from your favorite CNBC-sketeers is just that, "talk". Just fluffery to pose a new set of "questions" to you during the day so you'll hang on through the next commercial break ("Even if Bernanke's fed cuts rate, is it too little, too late? We'll tackle that "question" in the next hour. Stay tuned!")

True bears hibernate, sleep it off, and come back after winter. Larry Kudlow, Jim Cramer, Erin Burnett (and all the other regular cast members) are just pretending right now. This is just a "walk through". Call it a non-dress, dress rehearsal.

Better take your seat, though. The show starts soon. You don't want to miss the opening act.

Sincerely,
Don Harrold
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