March 3, 2009
By John Galt
Yeah, it was that bad.
Even though some days do not seem that bad, the volume not as nuts, the price action not so severe, yeah, some days are that bad.
And we are at the bottom of this mushroom cloud, getting incinerated while listening to Cramer scream out in his final words “Obama, what the hell are you doing?” That, much like the Today show rant was about about oh, 12 market bottom calls too late.
While so many people will say “but aw gee, the market action was not that bad, it went up, it went down, but Ben and Turbo Timmy did well.”
They did? They just said they will activate the TALF a month late and of course about $20 trillion short to make things all better like a band-aid on an amputation which has gangrene and wild animals nibbling at the raw stub.
Folks, this is beyond the worst case scenario now. The markets did what markets are supposed to do, price the future by predictive risk calculations.
The small caps hit the fan and THAT is all you need to know. Tonight, no Dow, no NASDAQ, the heck with that. We’ll focus on the S&P 500, the S&P 600 (small cap index) and Russell 2000.
They are providing a hint as to what’s next. Everyone is waiting for the announcement that the Messiah will walk over the mirrored pond in DC and pee on the walls of the Federal Reserve building spewing gold from within.
President Messiah had best eat a lot of minerals for breakfast to create about $63 trillion in waste byproducts.
The technical damage is obvious, the oversold conditions remain and the financial stocks are now forcing the realization that the country will not recover in the second half of this year unless the current administration acts immediately.
Oh Shit, we’re screwed.
General Motor’s bondholders are meeting with the government’s automobile manufacturing task force this week. If I’m a bondholder I look them squarely in the eye and say “I want my money, screw everyone else.” The Obama administration will remind them of the pre-packaged bankruptcy option.
To which, as a bondholder, I would reply “I want my money, screw everyone else.”
For all of the stupid things George W. accomplished in his eight years, like donating Southern California and New Mexico to the nation of Mexico, the one act of brilliance was to stall the auto manufacturing disasters known as GM and Chrysler off into President Obama’s all-knowing, all-seeing wisdom and administration. The choices are really quite simple:
Nationalize the automakers or bankrupt them.
We know which route he’ll choose but it will be fun to watch the Commie rat bastards on the Hill and his administration squirm as GM’s stock approaches the daily news stand price for the Sarasota Herald-Tribune (50 cents by the way and that’s way too much).
When all is said and done this week we might just get resolution to several of the disasters; auto, insurance and banking.
But I’ll need some help; did the Soviets goose step or just polka when they marched? It’s been so long, I’ve forgotten….
I forgot, but then again, I do remember the Radio Moscow World Service and those announcers rocked!
On to the small cap disaster which speaks volumes about our future…..
The S&P 500 is not what I would call a beautiful site, commentary on each chart….
My only prediction I would call a mortal lock? President Barry will be chain smoking 4 packs a day by May.
Now for the happy-happy joy-joy S&P 600 Small cap; OUCH!
A widening and accelerating spread between the 50 and 200 DMA on the downside is a sign of death, doom and obliteration.
Speaking of which, I wonder what happened to that caller into “Mad Money” asking Cramer about selling Bear Stearns….but I digress; here is another big, big, big, small cap problem; the Russell 2000 which once it breaks 350, then 300 I would venture to say fan+poop= one pissed off illegal cleaning up the mess.
With all this good cheer my friends, tomorrow I will probably return to the normal format. I try to keep it basic, panic stricken and terrifying to wake your butts up and get you to pay attention to the charts, not the talking heads. Timmy is freaking out in every chart at every level and you should too. The next time some moron broker says “this is a buying opportunity” to you, ask them if they understand the critical nature of the 50 and 200 DMA splitting and spreading in a downward fashion.
90% of the time you’ll get a blank stare and will have to press the restart button, usually located by a swift kick in the tuckus.
Until tomorrow, which by all measures barring a miracle will probably reflect a period I remember well during the first of 1987 and those prices are not unrealistic in our current environment.
I give our nation 60 days to fix this, tops. I stand by that number. If we are still debating the plan on May 4, 2009 the entire house of cards will implode and we reach a level of economic destruction unseen in our history.