Wednesday, February 16, 2011


Kyle provides some highlights in a CNBC Strategy Session interview with David Faber this morning.  The obvious catalyst for his appearance was his client note which we posted in COUNTDOWN TO EXTINCTION yesterday.  I will post each segment of the interview here from top to bottom so you can watch the clips as you have time.  No matter what, you must watch part 1 which is contained in this post.  You can fast forward to about 1:30 in the video where Gary gives us his perspective of a Japanese stock market index and the impact of QE (Quantitative Easing) to propel markets higher.  Gary's point is that as soon as QE is removed, gravity takes over and markets fall.

While Kyle gets a lot of attention here and it must seem like I have a man-crush on him, I don't, I just agree with the basic fundamental principles of math that Kyle champions.  It is clear from part 2 in the interview that he believes that he is one of the few that actually looks under the hood and kicks the tires to challenge preconceived notions about finance in this world.  And you know what?  It's true!  Kyle is one of the few that examines what many take for gospel, he researches it, and then he is willing to state emphatically that "The Emperor Has No Clothes".  In addition and to his credit, he is willing to bet all takers that the emperor is not wearing anything!

You must recall that Kyle went to every Wall Street firm and presented to them that the housing market and the securitizations were going to blow sky high and each firm rebuffed him and told him he was insane.

As usual the market is running off today. I've been looking for some sort of correction to get more involved in equities, but we have simply seen a consolidation. You must read these comments that I am still targeting an exit or at least putting on hedges in late April and early May, so as much as I actually feel like we may move higher it is tempered somewhat because I believe we've only got another few months left in the tank and we adhere to the "Sell in May and go away" philosophy.


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