Friday, January 15, 2016

As The Markets Burn

Ring of Fire

When the market tanked in 2008 who knew we would be here again so soon and who the hell is shorting gold and silver?  In the past as bonds and stocks sank like a ship the flight to safe haven was the metals, gold was up $15 bucks today yeah right!  Shit has been going sideways since 9/11 and as the towers disappeared so did the middle class.  I mean not everyone invests in stocks and has a flowing portfolio, sure many have a 401K, IRA and\or Roth involved in mutual funds but that risk is higher now with many funds tied to oil and mining. Being long in the area of commodities is a bust right now and if you think of the derivatives market chained to insurance vehicles like AIG tied to those derivatives well it's like Royal Bank of Scotland said, "in a crowded hall the exit doors are small" and suggested their clients sell everything outside of high-quality bonds.  Ever since the Fed lowered interest rates to zero the average Joe can't even make money in a savings account, as to when you were excited to get your fist blue book and bring it into the bank for interest recorded, that worked and you felt good solid growth.  I mean even a CD rate is @ 1.25% on a 2-year deposit, wow bring out the candles.

Other experts like Bill Gross the billionaire investor and founder of PIMCO who now runs a fund at Janus Capital Group said "Wealth effect constructed with paper sometimes corrugated/strong, sometimes toilet/flimsy. Stay out of the bathroom."  Well, that sounds like the toilet can't even flush.  Then they're financial professors like Larry Summers who thought that the Fed should have remained neutral with the rate hick said, "It would be a mistake to dismiss the current financial squall as froth. Markets often sense a gathering storm when policy-makers are still asleep at the wheel."  He has long argued that the world economy is so far out of kilter that it takes permanent financial bubbles to keep growth going, an inherently unstable structure.  Thanks Larry, so on a brighter note you can play the downside of the market and certainly jump in when we reach bottom as long as the banks don't pull a bail in from civil accounts, that's the morning you wake up and most of your savings are gone before a run on the bank takes place.

All I can say is the banks and the Fed are playing this as they go along, might raise rates 1% per year or might go negative, at which point you would pay the bank to keep your money.  I think it's time for Public Banking and true growth in company stocks unlike the casino money printing market we've been riding and if you're not with the house it's a ring of fire.  As that photo above does represent the Pacific Rim. 

Time now for that 'Spin Doctor'        

whopfrog2

 

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