WASHINGTON, September 7, 2016 – The long Labor Day weekend is over, the younger set is firmly back in school, and traders are supposedly back in action on Wall Street Tuesday, though you’d never know it. Stocks have been up, down and sideways in trading today, with all averages opening up, then taking a modest nosedive, and, at least as of 1 p.m. EDT, climbing back up September’s continuing Wall of Worry, with the DJI up around 20, the S&P 500 up 2.53 and the tech-heavy NASDAQ up a somewhat healthier 20.89.
News flutters about, as traders try to figure out what kind of numbers the third and fourth quarters will bring, not to mention asking questions like: Where are oil prices going now that the Saudis and Russians have agreed to another non-deal? When is the Fed going to kick up interest rates and crash the market? Why is gold catching such a nice bid not long after Soros allegedly dumped all his gold holdings? And why are Apple’s new iPhones, and maybe other products scheduled to be announced Wednesday, allegedly going to be so underwhelming that AT&T (symbol: T) will start looking like a hot stock? (Which it has actually been for much of this year.)
All the TV blowhards who worshiped Apple (AAPL) in the Steve Jobs era have continued to badmouth the stock since his untimely death as one fashion has morphed into another despite Apple’s continued, amazing profitability. The problem is, for the fashion-crazed Wall Street crowd, the company hasn’t “done” anything for them lately, so it’s back to the long-accustomed PC vs. Mac mode the blow-dried media Fed us late in the last century. What a bunch of clowns they are.
With the Fed, and increasingly international central banks buying up more and more bonds and threatening to buy stocks, too—which at least some, like the Swiss, already have—this is a market that feels more and more manipulated and less prone to serious analysis, which is dismaying to long-time investors like the Maven. Fundamental and technical analysis, once the bulwark of stock evaluation methodologies, have become generally dysfunctional in light of central bank manipulation and illegal HFT gaming of the trading system.
We have to face the facts:
- Keynesianism has failed and, since no central banker believes in anything else or cares, monetary policy is trapped in a dying system with no way out.
- By relentlessly buying politicians who support the destruction of nation-states and national boundaries by World War Z-style mass immigration, a cadre of essentially nationless oligarchs, informally led by the dodgy, catastrophically wealthy George Soros, aims to create a worldwide state of befuddlement leading ultimately to their total control of our wages and our lives.
- The once-powerful United States, under a feckless, arrogant, triumphantly ignorant and likely treasonous administration, has been reduced to the kind of social incoherence it experienced as a newborn nation under the ineffective Articles of Confederation. Lacking U.S. leadership and overwhelmed by hostile, pro-socialist (ans worse) immigrants, the Western World in turn is fresh out of ideas and is nearing collapse.
- Having encouraged illegal, south-of-the-border immigration since the first term of minority-president Bill Clinton, increasingly Marxist Democrats—having already permanently seized control of the Federal bureaucracy in the 1930s—have funneled illegals into key states and registered them to vote Democrat in lockstep. Due to the electoral system, these turncoat Democrats are on the verge of and may have already achieved their goal of a one-party state. The result: the essential termination of American Democracy and the distinctly individualistic American character, seriously dividing and weakening a demoralized electorate that was late waking up to this silent coup.
- Taking advantage of this enormous power vacuum and failure of Western will, both Russia and Communist China are boldly reshaping the world in their own image and likeness entirely without opposition, virtually guaranteeing some kind of future world catastrophe that will re-shape the planet in a way that closely resembles the feudalism of old.
Sadly, these are just the major cosmic issues we all need to consider. They have nothing to do and everything to do with investing in stocks and bonds for one simple reason: If you know the long game is rigged against you no matter what you do, what’s the point of laying down a bet?
We’ve mildly shored up defensive positions in gold and silver today via a pair of ETFs: SGOL for gold and SIVR for silver, mainly because we can trade these at our brokerage without commission. Gold has entered its strongest season this month, and the mass selling and/or shorting of August appears to have run its course. Central banks, however, remain firmly against another precious metals rally. We’ll have to see how they react to this tentative recovery in the metals.
We may dispose of our position in KKR (KKR) soon, just as we traded out our position in Blackstone (BX) last week. Both stocks have weakened, we were (and in KKR still are) up significantly over average (roughly 17 percent), and it’s probably best to take the profits and run right now as we pile up cash. We still like both these stocks, but we’ve been caught unawares before by sneaky market doings and would rather not get caught again.
We’re about 15 percent cash in our major trading account and are going to head for about 30 percent cash as it makes sense. We simply have no confidence in these manipulated markets as we approach the final quarter of 2016, and we fear overreaction to the eventual Fed interest rate hike and perhaps even violence if the November election is gamed and the silent majority finally, after some 40 years, runs out of patience with Washington at last. This sort of thing tends not to end well, and we don’t want to have too much at risk until and unless the dust settles.
Caution in this market is now more important than ever. We’re still fairly heavily invested, mainly because, let’s face it, what else is there for a small investor? A “savings account” at a “safe” bank that yields a whopping 0.01 percent interest per month? The problem is, we’re still feeling more like suckers each and every day as Washington’s legion of carnie barkers continue to rig every roulette wheel they can find.
Investing in anything at all is beginning to feel like the title of that old show, “Stop the World, I Want to Get Off!” Stay tuned.