On Markets, Bernanke & The Fed

Posted by Peter Grandich - Grandich.com

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After watching, listening and reading all the analogies of the what, why and who caused the markets to do what they did, I concluded there’s only one truly honest response to all of it

I may be a half-famous whiz kid or a wanna-be or maybe even a never was, but after 30 years in and around the financial arena, I long ago realized there are only two types of commentators:

1-      Those who say what they think; or

2-      Those who say what they think you want to hear and it sells

The financial service industry is full of #2s and looks to get rid of any individuals who try honestly to be #1s. I’ve prided myself for the last half of my career to be a #1 no matter how much “number two” gets throw at me.

When the dust settles and it finally comes to light how bad America is economically, socially, politically and spiritually, this will become the song of what’s left of us who worked hard and tried to do the right thing. Unfortunately, what may be played right after that is this.

U.S. Stock Market – Long ago I said trying to trade markets was futile and only focus on making (at best) educated guesses. I feel very good about my guessing over three decades and my latest suggestion that it ran out of room to the upside appears to be correct. I do think the “Don’t Worry, Be Happy” crowd won’t take this lying down as they were all over TOUT-TV and elsewhere, urging the flock to stay in line. As previously noted, stocks are the lesser of two evils when compared to bonds.

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U.S. Bonds – Months, if not a year or two worth of gains evaporated for those who remained in bonds. While some consolidation and countertrend rallies are expected, the worse investment for the next decade remains status quo. I never heard any bond bull explain to me when the 10-yr. was around 1.75% how bonds couldn’t fall if the FED stopped being 60%-75% or so of all bond purchases. Keep this in mind as a three decade bull market in bonds ends.

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U.S. Dollar – It was very oversold going into this FED announcement and given what happened elsewhere, the bounce has been anemic so far. It would come as no surprise by as early as next week and no later than July 4th that it has given up all the gains made off the Fed news and then some.

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…….more on metals & the Mining Shares HERE