As always, get Friday Night requests in!
Can an Efficient Market get Scared of Baloney?
I do not want to spend much time on this, I have spilled pixels by the ton explaining psychology and markets built on quicksand. I saw this headline today:
Now A Congressional Committee Wants Meredith Whitney To Testify And "Come Clean"
Ever hear that song "Don't Rock the Boat"? Obviously Mrs. Whitney has not!
From what I have seen of Whitney's report on Muni bond defaults, it was lacking in real hardcore substance. After her 60 Minutes appearance a muni bond route ensued and people are mad that a 5 minute baloney piece was able to roil markets for big dollar withdrawals and stunted offerings. May I ask a simple question?
Is is more plausible that:
-The 10-20 normal, everyday people that are over age 60 and actually watch 60 Minutes are in control of a trillion dollars or more of capital to trigger a flight from muni bonds after the show?
-Talk and serious discussion of various over hauls in muni land were well on their way resulting in haircuts and Mrs. Whitney was an easy scapegoat?
I leave it to the reader to decide. In a deep, liquid market like muni bonds I would think one call from a media loving analyst would have next to zero impact on pricing. Unless that market does have structural issues and is built on ponzi debt schemes that is. No worries, I wrote before that muni debt is 100% safe due to The Bernank and I have even said they were a buy at these lower levels.
Ben Bernanke: Is He the Kwisatz Haderach?
After the speech given today by FED Head Ben Bernanke to the sharp minded Press Club, one can only wonder, is The Bernank the Kwisatz Haderach?:
Kwisatz Haderach is a term which refers to a prophesied messiah and superbeing in Frank Herbert's fictional Dune universe. The Sisterhood theorize that such a male would possess absolute prescience, seeing all possible futures thus being able to cause select threads of time to be realized through manipulation.It must be!
The speech today was so brazen and so full of shit that I debated whether to even write about it. At some point things cross over into that Twilight Zone type of thing and today was the day it happened to me.
In summary, and I will paraphrase though I will not be far off from Bernanke's EXACT words:
1.) The stock market is way up
2.) Due to (1) everything is getting really good now
3.) Unemployment will remain high though, whoops!
4.) FED monetary policy shows no inflation anywhere in anything in the world except maybe...
5.) The commodity price rise is a healthy sign of growing world economies, but that has nada to do with FED policy anyways so who cares.
This passes for the US Federal Reserve head policy maker's view on things?
I submit this all with limited commentary. If Ben Bernanke sees no problem with how hot money flows are causing distortions in asset prices then he is simply lying. I have never really believed that The Bernank is stupid, he is most certainly not. The Bernank is simply pounding the drum on what he can, a higher stock market, while downplaying the failures of his work, unemployment and severe inflation in real necessities.
Unless he is the Kwisatz Haderach! Then maybe this all works out due to his vision! On cue, here we go (headline may change later but this I copied at 7:30pm EST):
Bernanke speech helps push stocks higher
Maybe I am not a believer. Maybe the miracle of a rising stock market where most real Americans have nothing it it can result in a robust economic system. How can this be! Only one way:
Only instead of rain on Arrakis, we have dollars from the sky finding their way into POMO-MOMO stocks! Genius!
Speaking of an Uptrending Market
My move on The Hershey Company (HSY) is working well. I entered on the Tuesday open at $46.79 and today's move brings HSY to $50 and change (almost +7%)! I had estimated a move to $50 and have moved up my stops to lock in gains. The action in HSY is still favorable, but you know how I roll; conservative and keep wins. If, and a big IF, HSY can break out over $51 on some volume it may run to $55 or more. It has been turned back many times and I respect that trend. Book it!
Have a good night.