Yellen insures another move?

We have been telling you for ages that markets are on a central bank-induced asset party. Nothing has changed. Mrs. Bubble teased away with “patience”…”no patience”…”data dependant” and a whole load of bullcrap. The bottom line is that Janet is not going to raise rates unless the markets force her to and so far, markets have done nothing wrong. And now you have Japan and Europe in a race to see who can print the most bucks. As the euro and yen have crashed, their markets have soared. Add in China easing and negative rates in many areas and the juices still flow. Without naming names, a respected hedge dude believes we could see some 1999ish activity as greed and noise picks up. We are seeing some of it in the biotechs as we have reported to you the valuation nonsense that is going on there.

Small caps and mid-caps have edged out to new highs with other major indices getting close. It still remains a 60-40 market as the bear market areas remain just that…bearish. But with the recent counter-trend rally in the euro, those areas have bounced. We will need to see more before calling real bottoms in those areas. They include Energy, oil& gas and the rest of commodity land.

We now enter end-of-quarter window dressing where nothing bad ever happens. Of course, window dressing is illegal so it really doesn’t happen.

The best bullish areas continue to be biotech, healthcare, medical, managed care, semiconductors and retail of many stripes including department stores, discounters, home improvement, restaurants, apparel and drug stores

Iran has kept what promise? Lying or just naive?


The Biotech bubble inflates!

Back in 99, any company that announced a website saw their stock soar. Companies were changing their names adding .com to their name. Mutual funds changed their names to “internet.” Unfortunately, many of those companies had squat and are now nowhere to be found.

Fast forward to today. Over 130 Biotech companies have been brought public in the past couple of years with the number getting larger and larger. Most all have no sales with many not even in trials yet. THEIR STOCKS ARE SOARING. $2 billion market caps are going to $4 billion. Announcements of phase 1 trials see stocks soar…even though a drug could not come to markets for a long time. Any announcement is lifting these stocks. Even secondaries are lifting the stocks.

For example, yesterday, JUNO announced a huge loss and a bigger than expected cash burn. What did the stock do? It gapped down…turned around and finished up over 15% on monstrous volume. Total sales for the company…as John Vernon said in Animal House…”0.0.” Market cap for JUNO? $4.4 billion.

The BIOTECH index is starting to go parabolic and that’s after a long run. One does not know when or where it stops…and for all anyone knows, could be much higher. The good news is names of substance, with strong sales and earnings are doing well also. We’ll let you decide in what sandbox to play.



By Gary Kaltbaum

Woke up this morning to headlines like “Fed “Patient” No More!’ Cute! Another headline: “Fed Puts Interest-Rate Hikes in Play!” What Fed are these people watching? For quite a long time, we have been telling you that unless the market forces them, the last thing you will ever see is the Fed raising rates. Notice how they tease. Notice how they maneuver but nothing ever happens. What happened to the 6.5% fake unemployment rate threshold?

The bottom line is that the Fed put themselves in a box a long time ago. They have set markets up to being used to 0%. Imagine, how is it that they say the economy is doing well but are so afraid of an itty-bitty move from 0% to 1/4%? Why are we seeing so many supposed pundits begging the Fed to not even raise rates to a nothing 1/4%?

Unfortunately, with all the central banks around the globe moving all over the map, there have been repercussions…like a crashing euro and yen and a soaring dollar. (We hate talking currencies)The fed forgot that a soaring dollar hurts sales, earnings and overall economic growth over here. Oops! If the Fed raised rates yesterday, we could have seen a further yonking in the euro. So Yellen did nothing but comically removed the word “patience” but state that doesn’t mean they will be impatient. Say what!

The other part of the equation is that they are watching markets first and everything else second. Leave no doubt that the timing of QE-Euro and QE-Japan were not by accident as it was exactly when QE-USA stopped…for now!

So…we had the mother of all short covering in all currencies versus the dollar yesterday. This enabled a good move in the worst areas, that being commodities of all stripes and those related countries. But all these areas remain in downtrends and not sure one day will change that. Major indices are now towards the upper end of the range again but must tell you mid-caps and small-caps have moved above range.

We just don’t think much has changed but a big breakout of major indices will go a long way in giving markets another leg up. We’ll have our usual big market report over the weekend.

The socialists never want to stop trying to take more of your money!

It was the Dems who made you paid taxes on your benefits. It is the Dems that refuse to fix this ponzi scheme. But they have no problems trying to take more money from you and out of the economy.


The freakin Fed speaks!

Those that read this report know our disdain for the Fed as well as central banks around the globe that are still doing the Bernanke dance. To her credit, at least Yellen “supposedly” stopped the printing. But now we get the “wording” dance. Amazingly, the investing world sits breathlessly to hear whether the word “patience” is used or not used. The economy could not give a crap. A 1/4% move is meaningless to Aunt Mary and Uncle Bob but somehow they still try to make it a big deal. This is all about the traders and speculators that have made hay off of almost $14 trillion of conjured up bucks.

We have no idea what they do today. The chalk is to remove the word but use other language that leaves everyone wondering. We are not sure they will be so specific. Yippee! Keep in mind, economic numbers have been heading south as consensus estimates have been missed. Check this out:

So after two days of fedheads playing Space Invaders, Centipede and Galaga, they will come out today with their blah blah blah. Good luck!

Next up…a doritos stand!