Investor's Edge with Gary Kaltbaum - Reality Sets In

Episode Date: May 5, 2022

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Terms apply. Lounge access is subject to change. See Capital One.com for detail. Investor's Edge with Gary Coltbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Gary Coltbaum, your host.

A thanks of being with us today. Glad you're here, ladies and gentlemen, happy that you are listening. It's Cinco de Mayo, right? May 5th, 2022. Thanks of being with us today. So here is what we are going to do. and then we'll bring you to today. We are going to hearken back to Christmas Eve of 2018

and quickly take you through the process and where we are now. Jay Powell was raising rates like he should into Christmas Eve of 2018. unemployment was low, the economy was strong, but on his last couple of rate cuts, the market swooned. And it was swooning pretty damn good into Christmas Eve, which by the way, that day is a half day.

He had James Bullard, his mouthpiece, who was no longer his mouthpiece because he has moved away from Jay Powell and how he thinks. Didn't even wait for Christmas. They floated it out into the public because at that time, Jay Powell telegraphed three or four more raid hikes during 2019. They floated no more raid hikes. At that juncture,

I knew he was a defender of the market, which is not his job. Little did we know how bad he was. The markets rallied like they should. You go from raising rates to stopping, and then markets started pulling back again, started getting hit after the initial rally. they then announced a rate cut, even though the economy was strong, and markets rallied.

Once they cut rates, markets went down. Wait, what? Here's this guy trying to control markets, make sure they don't go down, and he just cut rates for the first time after announcing it, and the market rallied up on the announcement but is selling off on the cut.

Well, let's just do it again. So they floated another rate cut. Markets rallied. And then they cut rates again. And then markets started heading south again. Markets just wanted to go lower. It's the nature of the beast. Every now and then, markets just want to go lower.

He wouldn't let them. So markets rallied again. And then they stopped dropping as soon as they cut rates a second time. So they did it a third. They announced it. Markets rallied. And then they started coming in again. Wait a minute.

We just cut rates three times. Then in October, amazingly, he was at some confab, some interview. He was sitting in a chair with some lady. I remember it. And he casually states. And I don't remember exactly, but what came out was he was going to start printing money.

What? Print money. Money? Wait a minute. Ben Bernanke printed money when we're in the depths of hell in 2008. Why would we have to print money? And then he came out with this line. But don't call it QE, quantitative easing, printing of money. And I came on radio and said, buy the hell out of the market. He's printing money. and from there till February, markets romped. It wasn't a tough call, and then COVID hit. Markets swooned.

Jay Powell immediately took rates from wherever they were to zero, zero. And announced, I don't know the exact number, but I'm pretty sure it was over a trillion dollars of printing money. And what do they do with that? They buy the hell out of assets. They get risk to appetites up in order to keep markets going. Markets kept going down. Why?

I mean, we're shut down. He announces a second tranche of printed money. Markets go down even more. And then he comes in with a third. And I don't know the exact numbers, but we're talking about. in five, six trillion dollars. At the same time, obviously in concert, Europe doing the same. And after fits and starts, because we weren't open yet, we were open, some states were, markets started to rally and rally more and rally more. And we went through some time and more

and then Florida opens and other things open and all of a sudden the economy's getting going again and unemployment's dropping but he's still printing trillions of dollars and we specifically told you this is going to create massive bubbles and distortions and of course printed money the distortions will be inflation. It's classic. And he kept printing. And he kept printing. And he kept printing. And he kept printing. And then it started hitting. Climactic moves in short squeeze crap. A game stop that was on the verge of bankruptcy goes from four up to 400 and something. Really? Blackberry? People on a chat room, on a Reddit board are targeting companies that have big shorts in them. Really?

Really? And they name it and it would go? And we'd be on this show and saying, this dollar stock went to eight yesterday, and it's back to two already. Oh, they have no sales. And then hundreds and hundreds and hundreds of SPACs come out. money grabs, all with the same crappy bull crap foisted upon you. We're all going to sell electric vehicles and make batteries. Greed and coins and 3D stocks and more short-squeeze stocks.

And biotechs with no sales. And the bar being lowered on initial public offerings. Remember what we told you here? When I started in the business. I started a penny stock firm many years ago. We used to bring companies public at a dime, usually capitalized at $3 million. They would have a million or two in sales.

Wall Street started bringing out companies with no sales, not with capitalization of $3 million. $3 billion. Jay Powell created all that, enabled all that, unimaginable amounts of greed, NFTs. What the hell is an NFT? What? A what? A what? An NFT? A non-fundgible token? Where people are buying art for 5 million bucks and marijuana stocks and Chinese ADRs. And then February of 21. they start popping. Everything we told you that would happen happened.

Up next, we take you through 21. I'm Gary. This is the one only Investor's Edge. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors money for a living, specializing in fee-based discretionary money management. No big commissions, just a fee on the assets that's managed. We also provide a full range of personalized services, including retirement planning, fixed income, and educational needs, all to assist you in achieving your financial goals. Understanding not all individuals have the same needs, we'll carefully evaluate your personal goals to determine a proper investment strategy.

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With Gary Coltbaum. It doesn't get better than. this so in early February of 21 we started noting these late move climatic runs and the popping of the bubbles one by one we did a whole show where we would say to you ABC went from one to 12 it's back to 2 eFG went from 2 to 18 now back to 3 That started to happen. Then around April, we, a year ago, went on TV, told you, we're now worried about inflation. The outcome of $30 trillion of printing of money by central banks around the globe.

And we made our voice known, but no one listened. We would state it, but no one cared. As long as markets were cooperating, even though, right around there, they then started topping out a lot of growth names that were leaders. Whoa, a bunch of growth leaders are cracking, and we go through May and June. And they cracked worse. and we noted how the process of topping out was going on in the market, that all the money was flowing into the apples and the big names that held the big caps up while the small caps were terrible and so many areas were just toast.

And then little by little piece by piece, inch by inch, sector by sector, stock by stock, things started coming in through June, July, August, while the indices were doing better. but inflation's perking up. But we were told there wasn't any inflation. And if there is, oh, it's just because of COVID. And don't worry, it will go away. And then it didn't go away. And they had to tell us, well, it's here, but it will be transitory.

Which basically means it'll go away. But they decided to use some, they obviously took a poll or a marketing, company said use the term transitory. And then the next thing happened. Slowly, yield started going up. But slowly, yield started going up. But no big deal. Not so much.

While they were telling us not to worry, everything is fine. All is well. Oki-doke. And then more and more stocks headed south. We're telling you and telling TV viewers underneath the surface, markets are topping, eventually get the indices. And as we went through the summer, more and more things were popping and popping and popping and popping. And popping. And then we got into October, where the...

There was one day with the NASDAQ and NASDAQ 100 hit new yearly highs, but there were 500 new yearly lows. The NASDAQ romped from October to November 22nd, and we're telling you, wait a minute, there's 500 new yearly lows. And we highlighted few how it was Apple and a select few names doing the job because 40-some-odd percent, of the NASDAQ 100 is five names. 20% of the NASDAQ was five names. The NASDAQ topped out the next day. And then things started to come in. And in November, what really marked the top was the mother of all,

asinine, asset 10, AS-11 IPOs foisted onto you and amazingly got public. Rivian, an electric. vehicle company that had never sold the vehicle at the time had a market cap at the high as close to Ford and GM combined, combined, even though GM and Ford had 260 billion in sales, and Rivian had delivered 42 cars to employees. We were on TV that day and said, don't do it. We told you, don't do it. We said to you on this show, that's probably worth 20 bucks. And it wasn't sarcasm or tongue in cheek. We meant it.

A stock that closed at 172, we were telling you, it's now 30. And then what happened? We got into the new year. And commodities started going. Yields started the spike. Inflationary numbers were showing up higher and higher. as they told us not to worry, everything would be just fine. And the 10-year went from 1.5 to 2,

and then back down before March, and then boom. The 10-year spikeomania since. And what we have had is nothing more than a continuation of the process. of a bare market in stocks, notwithstanding the inflationary stocks, defensive issues, and a smattering of things. From November, growth gets crushed. Up next, we'll take you to today. I'm Gary. This is the one only investor's edge. This message is brought to you by the Capital One Venture X card. Venture X card. Venture X.

offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge Access is subject to change. See Capital One.com for details. This episode is brought to you by Spreker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio.

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America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on its feet here. He's a Cinderella boy. With Gary Coltbaum. It comes highly recommended. You're going to feel better if you talk to him.

So rates are spiking. And the NASDAQ drops from 15-9 to 14-8. Bounces up. Drops to 13. Bounces up to 14-5. Drops again. Rallies up. But during that time, more and more names.

We would be able to come on the show and say, oh, this one cracked. That one cracked. cracked, this one cracked, that one cracked, this one cracked, that one cracked. Oh, and by the way, they're now getting the big guys. It started with Adobe. In November at 700, I was like, wow, what are they doing to Adobe? This is a stalwart. And then growth absolutely slaughtered off of the back of they had a monstrous run and spiking rates. Throughout this time, Jay Powell sat there with a thumb up his rear end and his pinky picking his nose while inflation was soaring

and gas prices were going up all throughout January and February. And we're yelling and screaming inflation and he's doing nothing. In fact, still printing money. Finally, He must have got a call from the White House saying, You want to keep your job? So they finally come out and say, well, you know, we're inflation fighters, you know. We're on the game. We have tools. Yeah, yeah, yeah.

Yeah. Look at us. And while the tenure goes from 1.3 up to 2.3, he announces he's going to raise a quarter point. Really? Hey, thanks. And then the yields go to 2.5 and 2.7. And all of a sudden the transitory was found out to be bull crap. And then they float, they got to raise a half a point for the next meeting.

And now there are three quarters of a point. The problem is the 10 year now is 3.066. This is no inflation fighter. He created it. He created the bubbles, which we told you would turn into bus. We have said to you time and time again, our big worry is the indices will bust also. Because they busted this, that, and the other thing in the final equation is usually the indices. We've always told you bare markets work little by little piece by piece, inch by inch, stock by stock, until it's so weak,

they come after the rest. Anything's sticking up. Even the apples. And that's what's happened. Which led to yesterday. Jay Powell raised rates to three quarters of a point trying to tell us, oh, we're good.

And we're telling you, he's still way behind. It's not going to cure anything. He doesn't know what he's doing. We have to hold our tongue. and using four-letter words against this guy. Nothing personal, purely business. We worried about all these assets that have busted.

Remember I mentioned NFTs before? Did I tell you there's been a 92% decline from September? On sales? The number of active wallets have dropped 88%. The bubble bursting. Housing, that's next. He created an affordability problem. And now mortgage rates spiking.

A one-two punch housing will not be able to take. I don't care where you're located. So we walk into today. On a strong day yesterday. But what did we say to yesterday? Always know where something came from. the NASDAQ had dropped 11% in eight days. The S&P dropped almost 8% in eight days.

And we told you this move yesterday was out of weakness, not out of strength. The market wrap today is brought to by Investment-Models.com. That's Jim Roaback, one of the great market timers. No gray areas with the man you're either in or out of the market. With his proprietary indicators, go check it out. Investment-models.com. this final number on the Dow is 300 points off the low. The Dow dropped a thousand and sixty three points today.

It was down 1,300 and change with a few minutes to go in the day. Ten minutes. Last ten minutes rallied up about 270. The S&P down 153, the NASDAQ down 647. the NASDAQ dropped more than it gained yesterday. A lot more. NASDAQ 100, 685. The SOX 158 transports 449.

You know what that means for advanced declines? You know what that means for new yearly highs versus new yearly lows? You had hardly new yearly highs yesterday on an up 900 day. And now you know what the market's telling us? our other endgame thought process inflation will cause a contraction in the economy but wait a minute Gary the employment numbers are great they keep telling us they will worsen

consumer demand it will worsen eight trillion dollars has been lost globally just on the bond market wealth effect on the stock market which was such an important part of the upside Well, it's in reverse. Do you know what I noticed today? They're talking about employment. And I know there's an employment number coming out tomorrow, but that's passed.

They were smacking the hell out of ADP and paychecks. Hmm. So the Fed that had a chance, a central bank that had a chance while the going was good to play catch up, tighten things up, do the right thing. But no, I'm an easy money playing God with market dalt. Everything will be fine. Waited. And now he's raising rates into a contractionary economy.

I just made up a word contractionary, I think. A hundred percent certainty right now with what the market's doing, J. Powell would be easing policy. That's been his M.O. he can't he's boxed himself in and unfortunately it boxes us in so a very rough day today took yesterday and shot the middle finger back at it we hope you listen when we said to you remember where the market came from before yesterday's frankly i would have thought we'd get some upside testing off of yesterday

We opened down and just sold off today. And bad. They also came after commodities that have been doing better. And why would that be? Well, if we go into this contraction, demand for commodities will typically head south. Maybe. Remember, inflation.

There's all this talk in order to cure inflation. You've got to do this and then not necessarily. necessarily. So just notwithstanding a nice little bump at the close today, and who knows, maybe we bounce tomorrow, I don't know. It was a very gross day. The outcome of what started Christmas of 2018. Up next, the bow tie. I'm Gary. This is the one only investors edge. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination.

Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Spreaker. The platform responsible for a rapidly spreading condition known as podcast brain.

Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives, and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen. Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones.

Start your show today at spreeker.com. Spreaker, because if you're going to talk to yourself for an hour, you might as well publish it. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide.

The Capital One Venture X card. What's in your wallet? Terms apply, lounge access is subject to change. See Capital One.com for details. You're listening to. What are we waiting for? Well, what are you waiting for? One, two,

Ready go. Ingestors' edge. With Gary Culper. So let me be a little repetitive. Markets are stretched, extended, and oversawed to the downside with a big gargantuan dose of bearishness. Has not helped. Simple as that.

And there's a conundrum here, as I stated. A man who played God with markets who would no doubt would be easing monom. policy right now in order to save the market cannot and has to do the opposite to fight the inflation that he created. In other words, damned if you do, damned if you don't. Don't mind me saying the word damn, please. Darned if you do, darned if you don't. The worst of all people is still running the show. He doesn't have a clue. He doesn't even know what's happening. He probably just looks at the Dow and the S&P and has no clue that underneath the surface

bubbles have popped everywhere because of what he created. And now we have to watch if they start really cracking employment stocks, commodities, that's the demand side, and that's the market recession is here. We believe it's here. The market's just starting to figure it out recently and gained some teeth today. The mega-cap tech, no solace, Google 112, Amazon 187, Apple 9. You have to hold in support yesterday. Facebook 15, Microsoft 12, Nvidia 15, Netflix, 15, Tesla 76.

Mastercard and Visa, 15 and 9. I don't even need to go through the absolute carnage in high beta names. We've taught you time and time and time. again, don't catch the fallen knife. Bear markets are bare markets. I bring that up because if I had a buck for every time somebody asked me about buying Shopify on the next 10 point drop, it dropped another 72 bucks today on earnings to 413 and 90% drop in earnings. The market knew something.

It has gone from 1763 to $413. Holy crap. and as I scan my screens, and again I have yet to do my scans, I'm just looking at screens, things were belted today. As always, we have no clue what tomorrow brings. We only care about the forest. The trees are the short term. The next day, the next hour, next couple of days, the trees, the big picture, markets remain bareish. Main trends are down. Only areas where we're with good relative strength, commodity types, energy, and a smattering a few other things,

but even those areas have been lost recently. Remember we told utilities were hanging in there? Not anymore. Reets hanging in there, not anymore. Discount retailers, not anymore. Managed care, not anymore. And at the close today, 1,033 stocks down.

I got 94 stocks at new highs, that's, excuse me, new lows. I got 94 new highs, but I can promise you, They were probably mostly non-operating stuff. Or some energy names that were strong early but still finished down, and that is the case. We really wish we had better news, but our worst fears are coming to fruition. The people that are running the joint are incompetent, impotent, moronic, imbecilic, and they're still running the show. Joe Biden's out there telling us how wonderful he is because he's lowered the deficits in the last year. He forgets to mention the only reason it's down is because we came out of humongous spending.

He's lying to the public. Joe Biden told us $5.8 trillion spending bill will lower the deficit. Chuck Schumer's out. You want to cure inflation? Let us raise taxes. I got news for you. They're not enough straight jackets and rubber. room for these people. And I say it with no joy. Again, we don't know what tomorrow does. We just know today really sucked. And we're back near the recent lows and they better not get taken out. Just leave no doubt. The market got a whiff of something it did not like today. The productivity numbers that came out were terrible. The economic numbers heading south. And normally,

Normally, interest rates would come down on that. Interest rates spike today. Inflation. Hope you are listening. Hope you're in tune. Our only goal here is to keep you a little step ahead of the market or lockstep and protect capital when need be. That's our only goal.

We don't have an agenda, bias, or altering motive when it comes to them. we would be glad to compliment. I don't care what aisle they're on. I have no compliments. That in a big nutshell is our thoughts. Again, tomorrow's another day. But do not forget. There's the trees.

There's the forest. And you know what the forest is doing. You all have a great evening. Drive carefully. When you get home, do like we do. It's pretty simple. You got children? Make sure you hug them.

Tell them straight to their eyes that you love them and you'll be there for them. Come heck or high water. They will feel better. You will feel better. I promise. Until tomorrow of a great night, I'll be on with Neil Cavuto and Fox Business between noon and two. Peace out all. Thanks for joining.

Bye, bye. This has been Investors' Edge with Gary Cult Bomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryKK.com. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital1.com for details.