Geithner Disappoints

I can't even begin to tell you how disappointed I am with the bank plan (if that's what you want to call it) that Treasury Secretary Tim Geithner presented yesterday. The incompetence we just witnessed is a harbinger of how the new administration will handle the financial crisis. Check out today's Rant to learn why the market is likely to go even lower than we saw in November, and why the bond-market bubble will be the next to burst.

Toby

What Goes Up AFTER Gold Prices Rise?

Stocks have been hammered for the past 5 years -- down 10% according to the S&P 500 index. Gold, meanwhile, is up about 100% during that time. What few Americans realize, however, is that there's a unique gold investment, created and issued by the U.S. Treasury Department, which skyrockets AFTER gold prices soar. Last time conditions were this good, it went up 665% ... and it's beginning to soar again right now.

Get the full details ...

This Could Get REALLY Ugly

I have now lost my last shred of confidence in the new administration.

On Tuesday, in his much-anticipated speech on the bank plan, Treasury Secretary Tim Geithner sounded like an academic working on his Ph.D. thesis, not a leader making hard decisions with imperfect data.

Rather than a clear strategy, he brought us yet another half-baked -- OK, unbaked -- bank plan that did not include the things we were told it would have.

There were no details on mark-to-market. There was no aggregation of bad assets. The pricing system was not addressed.

What we got was a public/private entity -- the same idea that has failed at least three times in the past. Anyone remember the "Super SIV"?

I simply cannot believe this degree of disorganization. In the end, all he gave us were concepts, not a plan.

Market Could Blow Through November Lows

During the past few days, the market had given every indication that if the government could provide some hope that it could get this beast of a banking crisis under control, that it was ready for a big rally -- even if only of the bear market variety.

But that "half-full" glass was shattered Tuesday.

Any near-term bounce back will be short-lived, and the more-likely scenario now is for the market to go even lower than we saw in November.

There are many reasons for this conclusion, but the two most fundamental ones are:

1) The same cast of characters who created the current economic and financial mess are, essentially, the same ones who are managing the show today. Instead, the urgent challenges the U.S. economy faces need a fresh perspective and new, bolder thinking.

2) Ever since the credit crisis and economic downturn began, the government has been several steps behind in their effort to assess the magnitude of the problems and then act to correct them.

The Next Bubble to Pop

Here is the dirty little secret of recessions: In the history of the modern world, every time we have had an economic recession/depression that was caused by a systemic financial disaster, we have seen a collapse in tax revenues with a period of rising unemployment averaging nearly five years.

The current recession will be compounded by the fact that our government is about to borrow more money in the next few years than it has borrowed in the last 30 years. Yields below 3% for 10-year bonds are completely unsustainable -- the math does not work.

In fact, the bond-market bubble will be the next one to burst. For a more in-depth analysis of this argument, I urge you to check out an opinion piece in The Wall Street Journal called "What Other Financial Crises Tell Us."

Here's the money quote: "Needless to say, a near doubling of the U.S. national debt suggests that the endgame to this crisis is going to eventually bring much higher interest rates and a collapse in today's bond-market bubble."

The new debt tsunami starts today with $67 billion of new bond issues. The Treasury announced plans to raise $487 billion this quarter -- up from $125 billion.

More than $2 trillion will have to be raised in the next year. That means too much supply of paper, which means higher rates and lower prices.

With leadership like what we saw on Tuesday, we are in for more psychological damage for sure, and a very difficult market for long-only investors.

Toby

P.S. It looks like things are going to get much worse from here. But don't despair. If you're interested in making money in 2009, from both the stock market collapse and the coming slaughter in the bond fields, join ChangeWave Investing today.

Dead Banks Walking!

The big banks plunged on Inauguration Day. Citigroup, JP Morgan and Bank of America dropped about 20% on average. No bank stock is safe. In fact, key analysts are now saying the entire system is ruined.

We've got a bunch of "dead banks walking," ready to topple over and crush the U.S. economy. While most people are panicking, you could be getting rich.

Get the details on how to profit from this calamity.

'Options Cocktail' From the Orlando Money Show

While I was at the World Money Show in Orlando, Fla., I sat down with ONN.tv's Matt "Whiz" Buckley and Jud Pyle for my new favorite financial talk show, "Options Cocktail."

Combining market commentary with happy hour -- genius! Trust me, you won't want to miss this.

What the Heck?: We review recent market events and talk about where to make money in this market. Watch video.

Heroes and Zeroes: Our picks for the week's winners and losers. Watch video.

What to Expect: We discuss what may be in store for the banks and how you can play them. Watch video.

Watch 'Bulls & Bears' on Fox News

Be sure to tune in to Fox News Channel this weekend and join Toby and the crew on "Bulls & Bears" for their weekly market roundtable as they kick off the Fox News Channel business block on Saturday, Feb. 14, at 10 a.m. Eastern. ("Bulls & Bears" replays at 4 p.m. Eastern, Sunday, Feb. 15, and 4 a.m. Eastern, Monday, Feb. 16.) Or you can catch the show Saturday evenings at 6 p.m. Eastern on the Fox Business Network.

41 Money-Doublers Since May 2008 -- New Trades Ready Now

This has been a rocky time for most investors. But it has been a cork-popping, champagne-guzzling time for members of my options trading service. Our record since May 2008: 84% winning trades; 41 money-doublers; profits up to 592%. If you want more money-doublers, new trades are ready now.

Wine Find: Less Than $3 a Bottle!

I'm always looking for a good value -- whether it's a stock or a bottle of wine. So, I was thoroughly intrigued when I received this submission from Clyde Moore:

"In your vein of 'value' companies, specifically Wal-Mart, might we suggest the Oak Leaf wine selection?

"True to form, in late '07, Wal-Mart apparently bought out the entire production of this California vineyard. We had just started shopping there, and as the guy was setting up the display, I made a comment that for $2.97 that's gotta be great wine (har har).

"Well, long story short, I'm going to guess that the Wal-Mart near us goes through more of this wine than any other in the country. We started buying it and then got our neighbors hooked. Now we all buy it by the case.

"I'm going to go out on a limb and say it's easily comparable to most $12 to $15 bottles (retail), and quite a few that are a good bit above that price range. A friend is always serving us Conundrum, and I personally prefer Oak Leaf. The Chardonnay is great (low oak!), and on the red front, I like the Cab.

"It's good stuff, and on our street each house always has an ample supply! Now, it's Wal-Mart for our wine, and it's only $2.97 … always! Sorry, their tagline kicked in. Cheers!"

To share your favorite wine or food experience, e-mail me through the form at www.changewave.com.