Wednesday, November 19, 2008

Lows Lows and More Lows

If you listen to the MAINSTREAM MEDIA you will hear the scariest deflationary stories imaginable. Many are talking about another 1000 points down on the DOW in the next few trading days. If that happens I will be licking my chops and buying. There is nothing good in the markets and these deflationary headlines are going to continue for a while and a lot of money will be lost as the DE transforms into IN FLATION.

Commercial Real Estate is getting hammered. People have lost so much money in their 401K's that they are keeping their jobs and delaying retirement. Things are so bad I think I need to quit typing and cry a little. This is where the smart make their money. It takes some guts and a lot of brain power, but lets look at why we are melting down. First, this dumbass that we have been calling Treasury Secretary is a quitter. The guy just says "I think I have done enough and I will save some of the money for the next administration" Honestly, President-Elect Obama is taking office with a mandate and will be able craft his economic policy without Hank leaving him some of the TARP money. When I tell my grandkids about my trading life, I will have to temper the adjectives that I use for Paulson. Liar, Quitter, and Piss-Poor Communicator seem to describe his actions thus far. This guy has provided a leadership vacuum for our country and will suffer for it.

We have so many regular Joe investors scared to invest in anything. They go to work come home and listen to someone like Jeff Macke tell them that the down action is just beginning. Consider Joe's money to be on the sideline for quite sometime. Also is there any fool out there who isn't going to sell and take a loss this year? Nope--more selling.

Deflation scares the markets more than anything and that is all you could hear today. It may last for another couple of months, but our way of life is not going away and we will see this economy grow again soon. I take comfort in the fact that I saw Dennis "Direction Changer" Gartman on CNBC's Fast Money tonight saying that the gold bugs have had a lot of factors go their way, yet gold has not rallied. He then says "I will let someone smarter than me trade gold here" JUST ABOUT THAT TIME CNBC SCROLLS ACROSS THE BOTTOM THAT GARTMAN OWNS GOLD. Who was right? Is he out or does he own gold? I don't care because I have no respect for what he says on television. No doubt Gartman is one of the best in the business, but do the great ones really show their hands? If Gartman really was playing deflation would he have talked about it? You decide.

Until the fundamentals take over---and thanks to Paulson that won't be possible until the new administration takes over---we will be in a technical driven market. The worst thing in my mind is if we are down 300-400 points tomorrow---if that happens we are in real trouble? Why, if we don't slam down and capitulate this thing could just continue to bleed slowly for quite a while.

What do we do tomorrow? Sit on the sidelines? It will be volatile for sure.

I will post my interview with Michael Panzner author Financial Armageddon. It was a great interview. He does make some interesting points about deflation--especially in the short term. Listen as he told me months ago that gold was a good investment, but he thought you could buy it lower. THIS INTERVIEW IS FROM SEVERAL MONTHS AGO!!