Subject: market selloff
Comments: Hi,
I just found out about you thru Bill Caras website...i wanted your opinion about what some radio pundits are saying caused the recent selloff.
1) Cramer said Friday night that "the fed reserve govs have been PRIVATELY telling people that commodities HAVE to come down, or else rates will keep going up", something to that effect. And so that led to insiders selling off big.
First, do you think thats true? And secondly, if it is true, isnt that like insider trading, since the Fed did not give a chance for the small investor to know, while the big boys sold off and locked in profits?

2) Phil Grandy, another puindit said that the selloff was due to the housing bubble(people have tapped out their equity, which had kept them buying more stocks), and also due to the weakening dollar. But gold usually goes UP, due to the weaker dollar, no?
Thanks

I have been calling for a decline in the markets for quite some time. My rationale all along is exactly what you are hearing about inflation today, but, until recently, Wall Street would not admit it.

The causes of inflation were very apparent to consumers, but the skewed economic numbers were saying otherwise. Since I do not believe economic reports that are carefully designed to hide the obvious, I did not buy into their spin.

As far as Cramers comments that "the fed reserve govs have been PRIVATELY telling people that commodities HAVE to come down, or else rates will keep going up", I have felt all along that this was the feds motivation for continuing the rate hikes. The only problem is the fed was affraid to admit there was a problem.

I think that commodities and energy are in a longer term bull market, but they will have nasty corrections along the way. Personally, I will use this weakness, and other corrections to come to add to my portfolio.

I have watched insider trading for a long time, and the corporate insiders have been tipping their hand for many months. That being said, I do not think this is the beginning of the major sell-off that many have been anticipating. I think we will have one more significant rally sometime this summer, and late summer/ early fall will bring the final leg of the bear market into play. Short interest is building, and these shorts normally provide the fuel for rallies like the one I am anticipating this summer.

The housing bubble is also something I have been pointing to for over a year. Unfortunately, many investors cannot see the bubble when everything is in a state of euphoria. They only recognize there was a bubble after the fact. The deflating of the housing bubble may actually benefit the stock market as cash gets sucked out of one investment and into another. I just don't know when that will happen.