What Happened to the Ambac Financial Deal?

Gary Kaltbaum is an investment advisor with over 18 years experience, and a Fox News Channel Business Contributor. Gary is the author of The Investors Edge. Mr. Kaltbaum is also the host of the nationally syndicated radio show "Investors Edge" on over 50 radio stations. Gary is also editor and publisher of "Gary Kaltbaum's Trendwatch"...a weekly and monthly technical analysis research report for the institutional investor. If you would like a free trial to Gary's Daily Market Alerts click here or call 888.484.8220 ext. 1.

Well, caught just a little flak from readers on my last report... but most emails completely agreed with me.

BOTTOM LINE: So what happened to the deal that Ambac Financial (ABK | Quote | Chart | News | PowerRating) and the crooks... I mean banks... were supposed to consummate Monday or Tuesday of this week?

I AM BESIDE MYSELF. For the past two years, I have been posing the question in these reports, on tv and on my radio show...what happens when the market figures out the fed not only does not know what they are doing....but that the fed had no control of the situation? Many feverishly disagreed. All evidence coming in continues to support my view...unfortunately. But what I saw this week should send shivers down the spine of anyone who is bullish on the markets...and it is all encapsulated in one statement that Uncle Ben said in his testimony this week. He simply stated : "Markets are saying inflation remains anchored!" Huh...what...huh.... This one statement drops Uncle Ben into the category of imbecile, numbskull, blind, head in the sand, McMurphy, Pinocchio, "I did not have sexual relations with that woman, Miss Lewinsky," "I am not a crook!." I can go on and on. I now believe Bernanke is now on the edge of completely losing the markets. He lost the housing market after saying for 2 years that it was stabalizing and bottoming. He lost the lending market as he said for 2 years that subprimne was not a problem. He lost the stock market as he kept saying the economy was fine and to this day, tries to tell us we will not go into recession. He has lost the dollar and lost the commodities market as I told you in past months that he dropped all pretense that he cared about inflation. And while I remember things, one more thing. Uncle Ben also said that a slower economy will bring down inflation. This is just another falsehood that flies in the face of economics 101. This dude is over his head...and waaaaaaaay waaaaaaay behind the curve.

So... what have we received for our money?

We have banks, the creator of the problem... trying to save another problem buy recapitalizing monoline insurance companies. How is it that the crooks saving themselves in the near term... is a good thing?

Not just rising commodities but soaring commodities... just laughing in the face at Uncle Ben.

A dollar that is sinking like Jessica Simpson's movie career. Did you hear what Bush said? Get this. He said, "We believe in a strong dollar policy!" I thought he was going to break out in laughter after saying it.

Though the fed lowered fed funds from 5.25% to 3%, mortgage rates have inched up as the fed has no control.

A stimulus package from the governement that will do nothing for no one.

Socialist proposals from Paulson that no one paid attention to. A whopping 10,000 people have worked out their loans a wee bit better... yippee! And what happened to the super SIV?

I can go on and on about this nonsense...but you have been hearing about this enough from me over the past couple of years. We are now in a situation where certain presidential candidates are blaming this situation on the tax cuts of a few years ago...and somehow will get the public believing that lie. I am very worried...very very worried that the people in power could not run a lemonade stand at this point in time. You had the lenders who committed the crimes part of the process in deciding how to fix things...you have the banks who needed to be recapitalizing now trying to recapitalize with their recapitalizations of the monolines. It is one big giant cesspool and I am worried.

Major averages stalled in a logical spot during a bear market... right at the decling moving averages. This is classic and something I speak about often. The only game in town in the past couple of weeks was the frenzied buying into the commodities which smacked of panicky buying...while the rest of the market lay in the weeds. This aint no hill for a climber. Take your time... protect your capital. This is going to remain a rough tough proposition... on all fronts!