Rebel Traders – Analysis Without The Hype

There are numerous reasons being floated in the media today to explain the sharp sell off in the equities market. Some are ridiculous, while others are meaningful. Unfortunately bubble TV pays little attention to the meaningful reasons, so let us briefly list the important ones here.

   Sovereign default concerns continue to grow for Greece and the Eastern European region.

   China has temporarily restricted banks from any further lending to control excesses in the economy. Additionally, a Chinese economist has floated the idea that China should curtail further purchases of U.S. debt.

   The U.S. dollar has risen significantly in response to the items listed above.

   Q4 earnings so far have been met with ‘sell the news’. An indication that stock prices have advanced far too much and earnings don’t substantiate the stock prices.

   Financial firms are still reporting en masse losses on loans and other credit portfolio products.

   The FHA, in an attempt to save itself from complete destruction has tightened lending criteria. A good first step for the FHA, but bad for those who were counting on more ‘easy money’ to keep the housing market afloat.

   Unemployment, unemployment, and unemployment.

   And the biggest one of all today is the Massachusetts senate election that elected Republican Scott Brown last evening.

Famed CNBC windbag Jim Cramer misinterpreted what the election of Scott Brown means. Jim Cramer claimed that the market would rally ‘huge’ today if Scott Brown were elected. The part that Mr. Cramer fails to comprehend is that Scott Brown threatens the normal way of life in Washington and he embraces the ‘tea party’ ideals of ending free money.

The ‘tea party’ movement has had lots of bad press. But that is understandable since the ‘tea party’ represents the idea of fair and balanced taxes, no bailouts for Wall Street firms who dug their own grave, and a government that actually represents the people instead of lobbyists and their interests. Any group of people that threatens the normal way of life in Washington will be singled out and made to look foolish by those who are threatened the most.

Senate elect Scott Brown says he will take to Washington the very concept that threatens the normal way of life, and that has Wall Street worried.

I really don’t know much about the person that created this video, but he must have a video library of every CNBC broadcast ever aired.

This video, which is actually a still image with audio clips, is from the likes of Jim Cramer, Larry Kudlow, and a whole host of other CNBC commentators and guests during the period in 2007 when the market was making new highs.

It is also in this very same time frame when I wrote that the markets were in trouble and that we were entering a bear market. Just like in 2007, anyone who was bearish was a fool according to CNBC.

The audio clips are simply priceless…

Remember, these audio clips are from 2007.

While I was going over my long term portfolio this evening and looking at my gold holdings (symbol: GLD) I recall the day in 2007 when I made my purchase. It was August 17th 2007 to be exact and my buy price was $64.80. I made that decision to purchase a long term holding of gold because of the looming market dislocation, the dollar collapse, and because of the Federal Reserve having to cut interest rates substantially in response to the looming disaster.

At that time Jim Cramer (on his Mad Money show) told his viewers to (paraphrasing) — turn away from bloggers and others who will tell you that the Fed rate cut will mean trouble for the dollar. He said that many people will make the call that gold would go up and the dollar would decline. I’m still trying to find a video clip of that day but I clearly remember him walking right up to the camera and just inches away from the lens and said they will be wrong. — I guess Cramer was wrong after all, the dollar went into the toilet and gold continued to increase ever further as the economy deteriorated.

Well now that a little over two years has passed I’m happy to say that my gold holdings are up 64.2%. Not a bad return for something I was never supposed to do if I listened to Cramer. Of course my long time readers already know how I feel about Jim Cramer and the network that airs his programs, but I find it fitting here at this juncture to expose this man for what he really is in my opinion, a stock market pumper and that is all.

I remember speaking at great length in 2007 with Lisa Doby of Capitalist Preservation about how bad things were likely to get. We watched the situation unfold and knew this was not going to be any ordinary recession, it was going to be a disaster. And what did cramer think of the sub-prime crisis (one of the first signs of the economic collapse that was yet to come) ?

That was Jim Cramer on July 16th, 2007. Clearly he had no clue about what the implications of the mortgage meltdown would have. On September 18, 2007, following the Feds first rate cut he claimed that the ‘worst is over’ and said it was time to load up on financial stocks:

Here is a sampling of what he recommended as a “BUY” following the Fed rate cut:

CountryWide Financial (CFC)

Thornburg Mortgage (TMA)

Lehman (LEH)

Goldman Sachs (GS)

Sears (SHLD)

Bear Stearns (BSC)

Downey Financial (DSL)

Washington Mutual

Go back and look at the charts for these great companies as Cramer claimed. First you will notice that some of them no longer exist as they went bankrupt.

And shortly before Bear Sterns went belly up and the stock tumbled 90% Cramer said “Bear Sterns is Fine”.

Even talking about Jim Cramer makes me kind of throw up a little, but on this day when gold moved to a new high I could not help a trip down memory lane …

If you are new to the stock market my honest opinion is to stay as far away from Cramer as possible…

… Of course CNBC is already known worldwide as the most obnoxious, silly, unprofessional, and absurdly stupid. But in an interview today during CNBC’s ‘Power Lunch’ segment California Attorney Jerry Brown discusses a suit being filed against State Street Bank of willful breach of contract. A breach that was originally brought to the attorney general through a whistle blower system, not by Mr. Brown himself.

Instead, CNBC is more concerned that Mr. Brown is simply using this as some sort of publicity stunt to gain popularity for a possible run at the Governor seat.

The interview that follows (video below) reveals just how stupid CNBC really is. Forget all about the suit against State Street, forget all about how the California pension system may have been screwed by State Street Bank, forget all of that and just ask him if he is running for Governor and is picking on State Street.

CNBC: The world already knows you are stupid (you employ Jim Cramer and Dennis Kneal, need any more examples?), but this interview today reinforces just how terrible your anchors, staff, and production departments really are.

CNBC – First Worldwide In Bull Shit

The good part begins a few minutes in, but it is worth watching the whole of it so you get the full story.

Before I get to tonight’s technical analysis wrap up I want to share with you one bloggers response to the constant Goldilocks talk on CNBC.

Before anyone chimes in and says ‘why do you guys keep attacking CNBC?’ let me just say that it is people like Dennis Kneal, Larry Kudlow, and Jim Cramer who as a whole always failed to see the problems in front of them. It was NOT CNBC who warned of the current financial disaster, it was us bloggers who seek and speak the truth. Now as CNBC continues to spew their non stop ‘everything is wonderful’ talk all over again they are now on a mission to discredit bloggers. So it is only fair game that us bloggers discredit them and reveal them for what they ‘really’ are.

If you had listened to Jim Cramer and Larry Kudlow in late 2007 you would have been pouring every last sent you had into the market (going long). And you would have lost a significant amount of money, and these are supposed to be experts.

But, the evil bloggers as Dennis Kneal likes to refer to us as (Karl and me included) were saying that CNBC was dead wrong in 2007 and it was the evil bloggers who made you money (or at least helped you from losing any) by giving you a ‘real’ view of what was unfolding so you had some objective information to aid your investing decisions with. The signs were all over the place in 2007.. it was us who chose to bring those signs to the world through our blogs (and still do). We don’t have an agenda, we don’t have corporate parents paying us or setting ‘on air’ standards… No, we ’say it as we see it’, even if it means going against the ‘heard mentally’ or the ‘corporate mandates’.

Dennis Kneal… Hope is not a sound analysis of the economy or of the markets, being a proud American has never made anyone money in the markets… I am a proud American but I know well enough to keep my money in or out of the markets based on some solid research, not babble from the media.

Dennis Kneal.. How do you feel selling your soul to corporate policy? How do you feel at the end of every broadcast when you go home and wonder if what you said was the right thing to say. Do you have a conscience? Or are you too far up the back side of General Electric to have a mind of your own? I would really love to know.

Selling ‘hope’ makes no one any money Dennis, providing solid journalism can. When will you become a journalist and stop being a circus clown?

First the CNBC clip and then Karl Denninger’s response: (great job Karl!)

Now for Karl Denninger’s response.

Fellow blogger and friend Karl Denninger from the ‘Market Ticker‘ did a good job taking CNBC out to the woodshed tonight for incorrectly reporting that Nouriel Roubini had turned bullish on the economy.

Give em hell Karl !

Rick Santelli tells CNBC economist Steve Liesman what he thinks…

Thank goodness we still have Rick at CNBC to raise the IQ level there.

Jim Cramer of CNBC’s ‘Mad Money’ appeared on the ‘Daily Show’ with Jon Stewart last night. Jon verbally gave Jim Cramer a slap in the face by confronting him with the crap that Mr. Cramer has been spewing for years…

Jon Stewart did a mighty fine job at telling Jim Cramer what smart people think of him… Good job Jon!

You can watch the interview in the three video clips shown below..

PART 1

PART 2

PART 3

If you recall I said I would reserve my comment on the housing rescue program announced by President Obama yesterday until I had all of the details.

Well, Mr. Rick Santelli of CNBC this morning pretty much wrapped up my feelings of the subject so far.

Rick Santelli’s statement this morning has been spreading around the ‘internet world’ like wildfire… Maybe someone in Washington, D.C. will hear it.

I’ll have the full market wrap up later this evening.