Thursday, February 3, 2011

Ben Bernanke: Is He the Kwisatz Haderach?

I will just open with the snow update. Another 8 inches on tap for Saturday and a large system capable of "substantial snowfall" on the way for Wednesday of next week. I am going to need extra beer. Oh yeah, nice to see Stratfor getting props all over the web today!

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?
or
-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.

5 comments:

GawainsGhost said...

Yes, well, it's a damn good thing I stocked up liters of Jack Daniel's a couple of days ago, because I am not leaving the house anytime soon.

My favorite Hershey's chocolate bar is the one with almonds. I'd go way long that. The only candy I like better than that is Mounds, because it has coconut, almond and chocolate. "Sometimes you feel like a nut, sometimes you don't."

For Friday Night Entertainment, I request some good old rhythm and blues. George Thorogood and the Delware Destroyers, "I Drink Alone."

http://www.youtube.com/watch?v=H8VlcbndXdM

getyourselfconnected said...

AWESOME pick!

Indeed, going with HSY is an easier gamble than getting owned on PWER like quite a few I know did!

I have to leave the house quite a bit, but with my trusty Infiniti G35X with all whell dreve ATS system no worries.

Still, I am buying a crap load of beer.

getyourselfconnected said...

Comments welcome............

GawainsGhost said...

Man, this totally sucks. Freezing cold, icy roads, expressways closed. I lost the internet last night. Didn't come back on until just now. This weather is really messing with my world.

I have properties to look up, research to do, price opinions to write, and it all has to be done online. When the internet shuts down, there's nothing to do but drink alone.

I went outside this morning to pick up the newspaper, and the plastic bag covering it was frozen stiff!

I can't live like this. I have work to do. But I'm not about to go out there driving around in these conditions.

Anyway, yeah, Hershey's, good investment. Chocolate always sells. But you might look into Godiva. Expensive, high end chocolate, with chain stores. I haven't done any research on it, but I do know it's the best chocolate you can buy. Delicious.

However, if you want some real candy, go on to the New Braunfel's Smokehouse website and order some Divinity. Your wife will love you for it.

I'll send you that guest post on this real estate mess soon. I've got a lot to say about it.

Leah said...

AWESOME pick! Indeed, going with HSY is an easier gamble than getting owned on PWER like quite a few I know did! I have to leave the house quite a bit, but with my trusty Infiniti G35X with all whell dreve ATS system no worries. Still, I am buying a crap load of beer.