The Fed Bulls—s Again!

Sorry for the harsh but we are so sick and tired of these numbskulls at the Fed. When is everyone going to realize that these “boy who cried wolf” meetings are just that? We just had the fed announce:

“The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives!”

After 22 months of teasing, leaking, telegraphing and trial ballooning rate hikes, during that time, there has only been one…and that led to a severe worldwide market drop…and if there is anything we know…IT IS THAT THE FED AS WELL AS THE CENTRAL BANKS AROUND THE GLOBE…ARE TARGETING MARKETS…not the economy. There is nothing they can do about the economy. After $20 trillion of printed money, 0% for 8 years, negative rates and the outright buying of markets, economies around the globe are at best, BLAH! And if the Fed was going to raise rates…THEY WOULD JUST RAISE RATES.

The Fed knows that our motto we coined back in 08 is what matters most and that is…”everything is ok as long as the markets cooperate!” If markets tank, they know it will take the curtains down on this horrid worldwide experiment by a bunch of ex-tenured professors that think they can control the world. Leave no doubt that every time markets have been hit in recent years, there comes another dose of printing money and buying up of markets.

But something has changed. In the past 2-3 years, major averages are basically flat. This calls into question whether we have finally hit the “diminishing returns” period of all this nonsense.

As far as markets, more nausea today. Many high beta names are being smoked. Strong earnings out of Google and Alibaba do not matter. And now we are starting to see the areas that have held up best coming under pressure. As we have told you, if they go, the market goes…that being the financials and the semis.

Because of central bank intervention, we have not had a real bear market in the Dow and S&P since the 09 lows though many areas have and the Russell 2000 dumped 30%. Keep that in mind as things continue to deteriorate.