Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.

ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine

covers over 5,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks,
and commentary can be found HERE.

Suttmeier's Four in Four video and ForexTV Markets Review can be watched on the web
HERE.

December 31, 2009 – Once in a Blue Moon

Before 2009 ends we will have a “Blue Moon”. It seems that we can summarize 2009 in a series
of “Once in a Blue Moon” events.
The Auto Bailout is not over, and extends into the mortgage market
GMAC will receive another $3.5 billion in tax payer money through TARP, bringing this portion of the
auto bailout up to $16 billion.
The additional bailout is required because of losses related to its mortgage operations. In Twenty-Ten
there will be more losses and we will find out that many car buyers who turned in usable clunkers will
be in default on the auto loans associated with that part of the bailout.
It will be a drag on those who participated as the $4,500 received from the US Treasury is considered
taxable income. As it turns out car buyers would have done better with dealer incentives.
The Dow began 2009 continuing the multi-year bear market
The Dow began 2009 at 8,776 and declined 26.3% to 6,470 into March 6th. The Dow held a multi-year
up trend and satisfied a long term Fibonacci retracement level. From this low the Dow rallied 63.5% to
10,580 this week. The end result was a gain of about 20% for the year confirming the end of the multi-
year bear market. Even so the Dow is still 25.7% below its October 2007 high of 14,198.

Twenty-Ten will not be as volatile, but the upside for the Dow should be limited to the 11,250 to 11,500
rolling six month risky area. With or without this strength the downside risk is to the 7,500 to 6,750
rolling six month value area.
As you know I am an "outside the box thinker" and on March 6 with the S&P at 666 I pounded the
table with a call for a 40% to 50% rally. That weekend Barron’s said Dow 5,000, Roubini said Dow
6,000 and Jim Cramer said the Dow's fair value was "5,000-something".
I re-iterated this prediction on Fox Business Live the following week and they conducted a poll as I
explained why I was bullish. 88% disagreed, 7% had no opinion and only 5% agreed. That made me
even more bullish. Now the opinion polls are in reverse. It seems like the bulls are back just as they
were at the end of 2007.
I predict that the consensus will be proven wrong with regard to the global growth story. Stocks
end 2009 both overvalued fundamentally and overbought technically.
As a strategist I look at facts and figures and graphs using a Green Visor, while economists
view things through rose colored glasses.
The Housing and Financials have priced in economic recovery but bailout money has been
misdirected.
TARP is being wasted on public and private community banks and many are doomed for failure.
Keep in mind that the America's Community Bankers Index (ABAQ) is down 21% in 2009 and
52.8% below its December 2006 high. The Regional Banking Index (BKX) is down 3.4% in 2009 and
64.7% below its February 2007 high.
The number of homeowners in mortgage default rose for the 6th consecutive quarter in the third quarter
as late prime mortgages more than doubled year over year to 3.6%. This makes it more difficult for
community and regional banks to help struggling borrowers make mortgage modifications.

Meanwhile, US banks that paid lobbyists, or had political connections in Washington were rubber-
stamped to receive TARP funding. Make a political contribution get TARP even if the bank is
overexposed to C&D and / or CRE loans. Nearly 3,000 community banks have overexposures to C&D
and CRE loans, which is why 165 banks have failed since the end of 2007. Failures will grow to 500 to
800 by the end of 2012.
The FDIC Quarterly Banking Profile is the balance sheet for the US economy.
I say that this FDIC data is a leading economic indicator as the Total Assets in the banking system
declined $596 billion since the end of 2008 through the end of the third quarter of 2009. This decline
occurred even as insured deposits rose. This puts tremendous pressure on the Deposit Insurance
Fund. Note the decline in assets since the end of 2007, when “The Great Credit Crunch” began.

Send me your comments and questions to Rsuttmeier@Gmail.com. For more information on our
products and services visit www.ValuEngine.com
That’s today’s Four in Four. Have a great day.

Check out the latest Forex TV’s Markets Review – Live each day at 1:30 PM.
http://www.forextv.com/Forex/custom/LiveVideo/Player.jsp
Richard Suttmeier
Chief Market Strategist
www.ValuEngine.com
(800) 381-5576
As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. I
have daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters as
well as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as the
ValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sample
issues of my research.

“I Hold No Positions in the Stocks I Cover.”