WASHINGTON, March 26, 2015 – Nearly every time in the last five years or so when the Maven plans some time off, the stock market goes nuts, completely screwing up his itinerary. Mr. and Mrs. Maven were supposed to be on the road Wednesday for a week off in Cleveland, believe it or not. But this week’s attempt by the market to obliterate any chance of trading for a profit in 2015 put the kibosh on yesterday’s holiday start.
It’s all starting to feel like our rather fuzzy header photo above, a screen shot of a Reuters YouTube video that shows a Brazilian bus being evacuated seconds before the vehicle fell into a sink hole, to be quickly carried off by a raging river flood. Stockholders this week have begun to feel exactly like that bus, and no wonder.
(See full video below.)
Markets were whacked Tuesday, and badly, by a creeping sense that the Fed’s longtime low-interest rate bubble in stocks was about to burst, aided considerably by a big drop in durable goods orders. Which, of course, means that Friday’s GDP report is likely to be rotten as well. Guess the chimera of this administration’s vaunted “recovery” is finally showing itself to all.
Speaking of the fear factor, the Saudis and others busied themselves last night bombing Iran-supported terrorists in Yemen. Not much support from this administration whose post-colonialists likely approve of the Iran-supported terroristas, given their earnest desire to kow-tow to that murderous country’s nuclear weapons ambitions.
Adding more terror to the scenario, high-frequency traders (HFTs) may finally be getting their long-overdue comeuppance. News came out that the Financial Industry Regulatory Authority, otherwise known as FINRA, will be requiring that HFT entities register with that agency, a clear indication that this club of pirates is likely to be under considerably more scrutiny for their casually illegal habits of front-running and spoofing trades to screw the unwary—which group consists primarily of traders and institutions that aren’t HFTs.
Given that trading firms have, for years, relied on HFTs for “liquidity” (since HFT chicanery and the economy drove mom and pop out of the markets years ago) are likely fearful of losing all those commissions, and, well, since the whole industry is now predicated on the fast and often spurious trading of these outfits, you can imagine the terror that actual oversight of these clowns might cause. Brokerage firms and their traders might lose a lot of year-end bonuses, and swell penthouse apartments in Manhattan might drop in resale value from the $20 million range down to a disastrous $15 million or so. Cry them a river.
Even worse, another government agency, the Office of Financial Research Agency (who the hell are they?), put out a report that stated, flat-out, that equity markets were massively overbought and that a horrendous correction (read: “crash”) was likely imminent.
In light of the Fed’s constant cautious optimism, it’s clear that this mysterious agency didn’t bother to consult with them before putting out a completely opposite message. It’s typical of today’s government whose agencies, which should at least be consulting one another, act like they’re in constant warfare like, say, Apple, Microsoft and Google. Idiots. But that’s why we taxpayers pay them the big bucks, right?
It’s really time for the Mavens to get in the car and start paying tolls from the Dulles Toll Road to the Pennsylvania Turnpike and beyond, presumably to pay for infrastructure improvements that the Feds might otherwise give away to the administration’s union supporters.
In the meantime, we’ve sold off some key ETFs at losses and have buttressed our remaining portfolio, for now, with a few hundred shares of the short S&P 500 ETF (SH). It’s the best we can do for now. You can’t trade very effectively on an iPhone while driving over the speed limit on the Pennsylvania and Ohio turnpikes, which is why we hate it when the market attacks every holiday we try to take.
For the next week, updates will be sporadic. Expect spikes in the market that could be heart stopping both up and down. Unless you’re experienced, it’s probably a good idea to stay out for now until things settle down. Whenever. It is very, very hard to make money right now, when every move you make seems to be the wrong one.