Impotent Foolish Fed. Buying SLB, AMLP, LL, FNMA, STNG, USLV
The U.S Federal Reserve is impotent.
Always was.
With respect to interest rates, all the Fed does is follow bond market rates.
Contrary to popular myth and belief, the Fed doesn't set or control rates.
The only things that matter in markets are sentiment and margin, which are essentially the same thing, and now many have very ugly measures of both.
When the Fed timed its actions well and people still had faith in the canard that it could control rates and thereby support markets, the illusion was maintained.
With the exceptionally imbecilic timing of the foolish Fed yesterday, the illusion may be shattered and for the astute that is a far more frightening thing - at least financially - than any virus or recession.
MSN: Stock Futures Drop Limit Down Even As Fed Slashes Rates
Will markets be closed by authorities?
If so, how will the reckless get bailed out by the sober few who saved their money, kept out of debt, and are willing to bail the imprudent out of their market follies at the slightly sane pricing we finally see today after so many years of patiently waiting?
They never issue trading halts when prices are rising astronomically and unsupportably, as happened most of the past decade. Funny, that.
So long as markets are operational, we'll buy the following at the open this morning:
SLB - "Schlumberger is the world's leading oilfield services provider. Cutting-edge solutions for reservoir characterization, drilling, production & processing."
AMLP - "The fund provides exposure to the AMZI Index, which is a capped, float-adjusted, capitalization-weighted composite of energy infrastructure Master Limited Partnerships (MLPs) that earn the majority of their cash flow from midstream activities including the transportation, storage, and processing of energy commodities."
LL (adding a 2nd position) - "Lumber Liquidators Flooring Company is the nation's largest specialty retailer of hardwood flooring. Shop laminate flooring, handscraped and engineered hardwood, bamboo floors, cork, vinyl & more at incredibly low prices."
FNMA - "Fannie Mae serves the people who house America. We are a leading source of financing for mortgage lenders and our financing makes sustainable homeownership and workforce rental housing a reality for millions of Americans."
STNG - "Scorpio Tankers owns and operates first class tonnage consisting of the latest generation of fuel efficient tanker vessels from quality shipyards."
USLV - "USLV is a 3x leveraged product intended for single-day bets on the silver market, not for long-term allocation."
Yes, these are surprising, perhaps stupid, or brave ... perplexing? ... things to buy, at a time when the entire world is an an unprecedented panic for one reason or other.
Yes, these are exceptionally high risk. All market activity is speculation, and the fair value for a lot of listings on today's stock markets is zero.
High risk? Definitely.
High reward? Time will tell.
If in doubt, stay out!
Nothing ventured, nothing lost.
However, fortune favors the bold.
No stops on these, given current market conditions. If prices drop materially in coming days, weeks, or months, we may buy more.
Always was.
With respect to interest rates, all the Fed does is follow bond market rates.
Contrary to popular myth and belief, the Fed doesn't set or control rates.
The only things that matter in markets are sentiment and margin, which are essentially the same thing, and now many have very ugly measures of both.
When the Fed timed its actions well and people still had faith in the canard that it could control rates and thereby support markets, the illusion was maintained.
With the exceptionally imbecilic timing of the foolish Fed yesterday, the illusion may be shattered and for the astute that is a far more frightening thing - at least financially - than any virus or recession.
MSN: Stock Futures Drop Limit Down Even As Fed Slashes Rates
Will markets be closed by authorities?
If so, how will the reckless get bailed out by the sober few who saved their money, kept out of debt, and are willing to bail the imprudent out of their market follies at the slightly sane pricing we finally see today after so many years of patiently waiting?
They never issue trading halts when prices are rising astronomically and unsupportably, as happened most of the past decade. Funny, that.
So long as markets are operational, we'll buy the following at the open this morning:
SLB - "Schlumberger is the world's leading oilfield services provider. Cutting-edge solutions for reservoir characterization, drilling, production & processing."
AMLP - "The fund provides exposure to the AMZI Index, which is a capped, float-adjusted, capitalization-weighted composite of energy infrastructure Master Limited Partnerships (MLPs) that earn the majority of their cash flow from midstream activities including the transportation, storage, and processing of energy commodities."
LL (adding a 2nd position) - "Lumber Liquidators Flooring Company is the nation's largest specialty retailer of hardwood flooring. Shop laminate flooring, handscraped and engineered hardwood, bamboo floors, cork, vinyl & more at incredibly low prices."
FNMA - "Fannie Mae serves the people who house America. We are a leading source of financing for mortgage lenders and our financing makes sustainable homeownership and workforce rental housing a reality for millions of Americans."
STNG - "Scorpio Tankers owns and operates first class tonnage consisting of the latest generation of fuel efficient tanker vessels from quality shipyards."
USLV - "USLV is a 3x leveraged product intended for single-day bets on the silver market, not for long-term allocation."
Yes, these are surprising, perhaps stupid, or brave ... perplexing? ... things to buy, at a time when the entire world is an an unprecedented panic for one reason or other.
Yes, these are exceptionally high risk. All market activity is speculation, and the fair value for a lot of listings on today's stock markets is zero.
High risk? Definitely.
High reward? Time will tell.
If in doubt, stay out!
Nothing ventured, nothing lost.
However, fortune favors the bold.
No stops on these, given current market conditions. If prices drop materially in coming days, weeks, or months, we may buy more.
posted by C. Guinness @ 8:52 AM
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