This
Week in Barrons – 9-25-2016:
“I’ve lost faith that our FED can find the right way out of this mess”… Bill Gross
Thoughts:
For the past week or more, I’ve had the luxury
of being outside the U.S. – looking in. Last
week’s actions had the DOW closing around 19k with an operating economy resembling
Mexico. I guess it could be worse – our DOW
could be at 100k with an economy resembling Syria. But who will ‘Find the Right Way’ out of this
mess?
Will our FED ‘Find the Right Way’ out? Unfortunately, our own Federal Reserve badly damaged their own
credibility this week by deciding to leave the federal funds rate unchanged. The FED did tell us that they decided to wait
for more evidence while: (a) the job market strengthened, (b) the economy
picked up, (c) household spending grew, but (d) business fixed investment remained
soft. The FED’s own dot chart showed a median
forecast for only one 2016 rate increase. Their own ‘National
Activity Indicator’ showed its 19th consecutive month in contraction – making it the worst
non-recessionary streak in 49 years. So
it shouldn’t surprise you to learn that people with functioning brain cells
like Bill Gross and even CNBC’s Steve Liesman were dumbfounded with the FED’s
lack of movement and came out and said: “The
FED has made fools of themselves. Yes, Bill and I knew that they may not raise
rates, but we didn't think they would lower their rate forecast by 30% over the
next 3 years. That was stunning!” Marc
Faber even suggested that the central banks will just continue to print and buy
real estate, stocks, bonds, and junk bonds until they own the world. Conclusion – it’s doubtful our own FED will ‘Find
the Right Way’ out.
Will our Banks ‘Find
the Right Way’ out? This week we heard Congress
question Wells Fargo’s CEO on creating millions of fake accounts by using
existing accounts as the base, and then charging those innocent new accounts
overdraft fees, credit card fees, etc. It
was comical except for the fact that the CEO will NOT go to jail, and the
mastermind of the plan received a $125m bonus.
Only in American banking can you get rewarded for screwing tens of thousands
of people. So it’s doubtful our Banks will
‘Find the Right Way’ out.
Will our FBI ‘Find
the Right Way’ out? Remember when FBI Director Comey
decided NOT to indict Hillary concerning the e-mail scandal? My feeling at the time was that he knew if he
took it to the Department of Justice for an indictment, all of the information
would be sealed as evidence, and the public would never have known what happened. The Huffington Post recently ran an ‘obituary’
on ‘Why Hillary Clinton LOST the Election’ and their reason #8 was: “James
Comey - He might as well have indicted her for real, like he did in the court
of public opinion. He was extremely careless.” FBI Director Comey knew exactly what he was
doing. The only way he could let the American
public make up their own minds was to NOT indict her, and let the information
out. Even the Huffington Post realizes
that now. Maybe the FBI will ‘Find the
Right Way’ out.
How about WAR? Desperate times call
for desperate measures. For
approximately 4 years now, I've been suggesting that the elites would like
nothing more than to start a war with a major player. This past weekend a horrifying event took
place. We were 4 days into a brokered
ceasefire in the Middle East when “a U.S. led coalition bombed the Syrian Army with
phosphorus bombs - killing more than 60 soldiers and wounding more than 100. The U.S. pretends it was an accident, and
that the timing was a coincidence." How on earth could the U.S. intelligence
error so badly as to bomb the Syrian army and civilians? And why would the U.S. be the nation that
violates a cease fire? After all, I
thought we were the good guys? There is
NO doubt that this was a ploy to pull Russia into a hot exchange with the U.S. A ‘hot exchange’ with Russia would cause
people to forget about our fraudulent FED's monetary policy. Our FED could swing into emergency mode, print
more trillions for the war machine, and no one would bat an eye. As the economy would continue to crumble, the
FED could blame everything on the war.
If you wish to learn more about the struggle in Syria (that is not
flattering to the U.S. Government) – please review the following video: https://www.youtube.com/watch?v=c8JppJyVxYU
How about the
Debate: On Monday night at 9
pm, it is estimated that 100m people are going to tune in to watch Donald Trump
face off against Hillary Clinton. To put this in perspective, the MOST
popular Super Bowl received 114m views – so this event is indeed the Super Bowl
of political face-offs. Last December I
predicted that Donald Trump would win the primaries, and that Hillary Clinton
was in much poorer health than most realized. But I also made another prediction that: "If
Hillary puts on a poor showing in the first debate, the DNC (Democratic
National Committee) will pull her. They
will say that she's had some form of pneumonia relapse, and will substitute a
different candidate (presumably Joe Biden) in her place.” Now, I still believe that.
Bring your popcorn and a stiff drink. The U.S. Super Bowl of Debates kicks off
Monday night. And YES – I’m counting on
one of these two individuals to ‘Find the Right Way’ Out of this mess.
The Market:
Thanks to ES for his charts.
This week was clouded in more volatility with our spineless FED deciding
not to hike rates, despite telling us that all of the ingredients for a rate
increase were there. That same FED continued to tell us that they are
not political, but just not willing to rock-the-boat ahead of The Obama Legacy.
This triggered a two-day market romp higher, taking the S&P from
about 2140 to a high of 2180. Then on
Friday, some of the air came out of the balloon, and we faded back down 12
points – closing at 2164.
So what now? The high is 2190,
and the recent low was the intra-day low of 2120. When markets get
volatile, you stop looking for trends (because there are none), and you look at
‘levels’. With a close at 2164, we are above the important level of 2160. If we don't let 2160 slip away, we will try
and inch higher toward the top of the range.
But, if we close under 2160, then there’s no real reason that we
couldn't quickly sink right back down to the 2140 level.
The other level is the 50-day moving average of 2169. If we close back above that, it lends credence
for our markets moving to new all-time-highs.
But of course a lot is going to depend on what happens Monday night. If Trump does really well in the debate and
Hillary does not, it might initiate a risk-off selling event in the
market. Wall Street and the
establishment do not like Trump, and they won't enjoy seeing their appointed queen
do poorly.
What this all boils down to is that we're going to have a lot more chop.
There is no real trend, and after
trading sideways for almost 3 months – all that has happened is that the sideways
trading range has expanded. For 40 days the range was 2160 to 2190. Then the range widened to the downside to 2120,
and looked frail before they rescued us and got us back up over 2160.
With the election looming, and with the dangerous situation in
Syria percolating – expect more up and down chop. Keep your position
sizes low, and don't be afraid to take profits. Until we break out of the range, each day
could go either way. Take care and enjoy
the Debate. It ought to be interesting.
TIPS:
Currently I’m out of everything except gold, silver and oil:
-
AG, AUY, CDE, FCX, FFMGF, FSM, HL, NGD, PAAS, PGLC and
SAND.
To
follow me on Twitter.com and on StockTwits.com
to get my daily thoughts and trades – my handle is: taylorpamm.
Please
be safe out there!
Disclaimer:
Expressed
thoughts proffered within the BARRONS REPORT, a Private and free weekly
economic newsletter, are those of noted entrepreneur, professor and author,
R.F. Culbertson, contributing sources and those he interviews. You can learn more and get your free
subscription by visiting: <http://rfcfinancialnews.blogspot.com>.
Please
write to Mr. Culbertson at: <rfc@culbertsons.com> to
inform him of any reproductions, including when and where copy will be
reproduced. You may use in complete form or, if quoting in brief, reference
<rfcfinancialnews.blogspot.com>.
If
you'd like to view RF's actual stock trades - and see more of his thoughts -
please feel free to sign up as a Twitter follower - "taylorpamm" is the handle.
If
you'd like to see RF in action - teaching people about investing - please feel
free to view the TED talk that he gave on Fearless Investing: http://www.youtube.com/watch?v=K2Z9I_6ciH0
To
unsubscribe please refer to the bottom of the email.
Views
expressed are provided for information purposes only and should not be
construed in any way as an offer, an endorsement, or inducement to invest and
is not in any way a testimony of, or associated with Mr. Culbertson's other
firms or associations. Mr.
Culbertson and related parties are not registered and licensed brokers. This message may contain information
that is confidential or privileged and is intended only for the individual or
entity named above and does not constitute an offer for or advice about any
alternative investment product. Such advice can only be made when accompanied
by a prospectus or similar offering document. Past performance is not indicative of
future performance. Please make sure to review important disclosures at the end
of each article.
Note:
Joining BARRONS REPORT is not an offering for any investment. It represents
only the opinions of RF Culbertson and Associates.
PAST
RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS
THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING
ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER
VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE
INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT
TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES,
AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN
ONLY TO THE INVESTMENT MANAGER.
Alternative
investment performance can be volatile. An investor could lose all or a
substantial amount of his or her investment. Often, alternative investment fund
and account managers have total trading authority over their funds or accounts;
the use of a single advisor applying generally similar trading programs could
mean lack of diversification and, consequently, higher risk. There is often no
secondary market for an investor's interest in alternative investments, and
none is expected to develop.
All
material presented herein is believed to be reliable but we cannot attest to
its accuracy. Opinions expressed in these reports may change without prior
notice. Culbertson and/or the staff may or may not have investments in any
funds cited above.
Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.
R.F. Culbertson
No comments:
Post a Comment