Tuesday, January 4, 2011

CNBC Gets Punk'd: Market "Bear" Dresses as a "Bull" and Warns of DOW 3000

This totally cracked me up today.  In a segment called "Stay long: Market Pro" Mike Rubino, CEO of Rubino Financial, duped CNBC and pissed on the bulls parade.

Rubino was supposed to be bullish on the market and in the shorter term he did agree that he was a bull.  However, a few seconds later,  Rubino changed into his bear costume and began warning about how the Fed has created the "mother of all bubbles" and warned that the DOW might see 2,3,or 4,000 before all was said and done.

The other contributor in the segment(Scott Redler of T3live.com) was visibly irritated by Mike's comments and immediately went on the attack claiming that such dire predictions as DOW 4,000 are "irresponsible" and hurt market confidence.

Take a look below and I will have a retort following the video:

My Take:

Question for you Scott:  Who is the one being "irresponsible" here?  Could it possibly be YOU???  Confidence and fundamentals are two totally different things. 

Perhaps real confidence might be restored at DOW 4000?  TRUE confidence will  not be restored until the credit losses that remain hidden in the system are purged.  I am not saying DOW 4000 is where we need to go to get there but I wouldn't say it's unreasonable. 

Whatever the number is one thing remains clear:  The sytem will lack confidence until the balance sheets are transparent and assets are accurately marked to market.  No one is going to be confident owning bank stocks when they know that there are trillions of dollars in assets that aren't accurately marked to market.

Scott and the rest of the other bulltards Wall St remain in a state of denial about this critical piece of market fundamentals.  They delusionally believe the market can just "grow out of this" despite 17% unemployment and trillion dollar debts. 

Anyone that refuses to buy into their thinking is instantaneously demonized and labeled as being "irresponsible".  In my eyes Scott is the one being irresponsible because he believes confidence is expressed in only one way:  Higher stock prices. 

This is total BS.  The market lacks confidence because stocks are an absolute horror show fundamentally.  The traders trade the tape and they are basically forced to go long thanks to Fed's QE printing press. 

IMO, 90% of the pros that are long right now are not confident in how the markets are trading.  I know a bunch of them who tell me behind the scenes that this market is a piece of garbage. 

However, they are paid to make profits so they trade the trend no matter how ridiculous it is.  If the bulls were really "confident" then guys like Scott wouldn't be so quick to attack someone that is bearish on the market.

The Bottom Line

CNBC really looks bad when they turn into a bunch of hacks.  Shame on Mark Haines for piling it on after Mike made his bearish call.  CNBC needs to look in the mirror when they wonder why their ratings have continually shrunk month after month.

When I look at the markets right now I see a bunch of nervous bulls that are concerned that their miraculous rally might be over. 

The commodity trade got pummeled today despite the Fed claiming they are still worried about deflation.  GLD got pummeled as gold dropped around $40 a share:

I thankfully  sold out of a good chunk of my GLD a few weeks ago.  However,  I don't think the gold trade is done longer term. 

Nonetheless:   The inflationists need to mark this day on their calender because the commodities should not have reversed like this on a day where the Fed came out and said they plan on keeping the printing presses on.

I have a feeling the market might start getting infected with a deflation virus in the near term where we see the dollar rise and stocks and commodities fall. 

However, it's hard to make a call on stocks when you watch the tape.  The HFT's make the tape so choppy day after day as they buy and sell stocks in a matter of seconds.  Trng Identify trend changes are almost impossible when I look at this tape.

I was told by an insider that it's gotten so bad on the trading floor that the specialists basically only pay attention during the first and last hours of trading because everything in between is a bunch of quant nonsense that means nothing.

Until next time!


getyourselfconnected said...

I just don't think stocks will ever be down 30-40% from here again; whatever will be needed will be done. I could be wrong, but that is my 2 cents.

Jeff said...

Who knows as the technology keeps changing on Wall St.

I think if it ever does happen it would be an overnight type 1987 style huge event that triggers it.

There seems to be to much buying strength from the algos to trade significantly lower throughout the day.

Scott said...

Just so you know, Rubino is one of those Elliott Wave guys. Coming up, he was a Harry Dent disciple, and only a few years ago was actively pumping Dent's book about DOW 40,000 by 2009:


As an elliot waver, Rubino's current view of DOW 4,000 has nothing to do with "fundamentals". Instead, it has to do with "a primary wave 5 as part of a grand supercycle blah blah blah technical garbage.

I get your larger point about the other guy and market confidence. Still, if the question is "who is the one being 'irresponsible' here", its clearly the guy who makes extreme predictions like 40,000 and 4,000 based on a method that is more akin to astrology than anything else.

Jeff said...


Thanks for the bio on him. I didn't know anything about the guy.

I just found it humorous to watch CNBC scramble after getting duped.

Personally,the head and shoulders TA type stuff that he talked about needs to be tweaked to factor in the HFT's trading models.

Anonymous said...

I can't say I agree with a DOW 4K prediction but I agree & feel all the positive talk and rise is breeding asset class bubbles that is inspired by the fed by keeping rates way too low forcing savers to assume more risk. Obviously, the fed does not feel the economy is strong enough to handle a responsible tap on the brakes. I think the first speaker is right, you can make some money providing you are a short term buyer and have stops in place but the investors the market wants are the retail ones which are buy & hold or should I say buy & get fleeced. It's such a tough time when outside forces are manipulating things. I just want to see normal accounting practices, real growing earnings (not just set the reset button and start from 0 again) and real GDP growth.

Anonymous said...

I read somewhere that the average amount of time that a stock is held is now 22 seconds. So is holding stocks for 1 minute considered investing long-term?

Jeff said...

"I just want to see normal accounting practices, real growing earnings (not just set the reset button and start from 0 again) and real GDP growth."

Here here anon

Bond rates are really rising today.

Just give me a normal market. Seems like the market is manic right now.

Nobody really trusts what's going on.


Anon #2

1 minute is now a long term hold I guess..LOL

Scott said...

I just found it humorous to watch CNBC scramble after getting duped.

Agree - that was hilarious.