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What a Week
We knew that this week was going to be quite the eventful one with the head of the Federal Reserve talking to Congress, with Michael Cohen ratting on Trump and of course Trump meeting Kim Jong in Vietnam.
So, let’s take them step by step. First off Jerome Powell. It didn’t take terribly long for the brain trust in the Federal Reserve to throw a lasso around Powell, after his boisterous claims to run off the balance sheet AND hike rates 4 times into 2019. Once the market puked up 20% of its gains from October to Dec. 24th, they had a “talk” with dear old Jerry, and “Whalla!” What emerged was the Dove of all doves.
On Tuesday, just around noon time, the market fell like the proverbial rock. While it was slightly down from the open, hovering around – 200 points, when the S&P neared the 2760 area, all hell broke loose. How much hell? About 32 billion dollars worth of stock hit the market. All to the sell side. By 2 pm, we had the DOW down 740 points. The S&P down 80.
How Many Rabbits?
I’ve been in this game for quite a while. I started in 1994 doing seminars for local investment clubs. That migrated into the first newsletter in 1996, and in 1997 we launched the web site.
All along the way, there were ills and evils that I pointed out, about how the economy is fake, the economic reports were fudged, the debts were unpayable, and on and on. And yet, through the magic of Central banking, they’ve managed to keep the wheels on this thing. It truly is incredible if you think about it.
Good evening all, the latest edition of our free investment newsletter is now on the site. Today we're discussing the market volatility and if it is really all related to the tariffs, or Mr. Cohn leaving or Mr. Tillerson leaving or if it is a function of the market itself. Yes there's a world of news out there, too much of it really. There is no shortage of topics we could discuss.
For instance the Central banks of the world now own 44% of all global GDP. That's pretty interesting. Or we could chat about the proposed 60 billion in tariffs against the Chinese. Again, there's a world of things to talk about. But in this issue, we started with the China tariff idea. Are we really threatening them? Give it a read, and I'll share my opinion.