You Will Lose Betting Against Governments

Big moves happening in the solar sector today. I would not chase those fuckers after such a run higher. Although I liked the airlines, I’ve convinced myself that crude is going to bounce this week. As such, I eliminated my exposure to the airlines and added to my oil longs. The QIWI position is nothing more than a play off Russia. Given my bullish position in crude, I figure Russia will bounce with stronger oil prices. Plus anyway, QIWI is trading at a 50% discount to where it was trading last year, in terms of PE and P/S ratios.

Everyone expected Yellen to disappoint today. I think the speech went well and there is no fucking way the Fed tightens now, as the CRB index hits 1996 lows. I’ll say it again and to the point: THE FED IS NOT GOING TO HIKE INTEREST RATES, NOT NOW, NOT EVER, ESPECIALLY WHEN WE ARE FIGHTING DEFLATION.

What if they did hike rates?

We would deflate further and the stock market would fall. In what world is that a desirable outcome for the Federal government, who is reliant upon cap gains taxes and market appreciation to sustain underfunded pension funds? I hope you understand by now, for good or for worse, that governments around the world are in a pickle. This situation lends to their desire to see equity prices continue to rise, in order to avoid budget cuts and recession. They will continue to buoy markets for as long as they can, so you might as well get it out of your immature minds that stocks are heading lower.

While individual sectors might weaken and markets transition from one phase to the next, the over-arching story in our lifetimes will be one of a bullish design.

Trade accordingly.