Fed’s Dudely Spews Gibberish in Bali

We’re gonna hike rates, soon, fast and hard. No, nevermind, we’re not gonna raise rates because THE FUCKING WORLD IS BURNING DOWN. After further review, we’re gonna hike rates. We really mean it this time. Oh shit, I forgot I had a doctors appointment and can’t raise rates at this time. We’ll have to raise rates later, no idea when that might be. I’m starting to think we might need to raise rates. Then again, maybe we shouldn’t.

The fuck.

“Directionally, the movement in investor expectations towards a flatter path for U.S. short-term interest rates seems broadly appropriate,” Dudley said in remarks prepared for a speech Monday at a conference in Bali.

Directionally speaking of course.

However, “it is premature to rule out further monetary policy tightening this year,” Dudley said, spelling out that investors may be giving insufficient weight to the chance of the economy performing better than expected, or headwinds from abroad fading.

“If the incoming information validates my view of the outlook, then I believe that U.S. monetary policy will likely need to move at a faster pace than implied by futures prices towards a more neutral posture as the labor market tightens further and U.S. inflation rises,” he said.

Don’t test us, sons. Your bets in the futures markets are reckless. If that data comes in hot, we’ll be hiking rates so hard your head will do a 360 like that exorcist bitch.

Dudley said interest rates are low because investors appreciate that the FOMC “needs to take a risk management approach in its conduct of monetary policy,” especially at a time when the outlook for the U.S. consumer is softening, credit remains tight, the U.S. presidential election could dampen business investment, and the Fed has fewer tools to fight a downturn in the economy than an upswing.

Rates are low as fuck because the world economy sucks, really bad. Plus. Donald Trump is gonna fuck up the apple card and the whole world is gonna burn. That credit is tight with negative to zero rates, worldwide. Ain’t that a bitch?

“Consider the many different channels of potential Brexit influence — not only the impact on international trade and global interest rates and currencies, but also on bank equity prices and on political uncertainty,” he said.

That BREXIT shit is a real downer. Plus, have you seen them banks stocks lately? The fuck out of here, talking about interest rate hikes. We can’t do that now. If things change, however, then we’ll do it.

Mr. Gang from Citi has all sorts of terrible things to say about China’s economy tonight. He’s warning of ‘financial leakage’, the constant flow of funds leaving that God forsaken walled nation in search for better opportunity. No one cares. It’s crickets all night through all day long. People know of all these fucked up problems, how China is inexorably screwed and how the UK is going to leave the EU in shambles.

No.one.cares.

QE for life. Counterfeit dollars slushing into index ETFs will save the day.

If you’re not a very good stock picker, I advise you to be true to yourself and either join the hall of men and gentlemen inside Exodus (now including The Pelican Room) or bear witness to the greatness that is The Option Addict in After Hours with Option Addict, which is a nightly summary of Jeff’s take on the market, including his top ideas.

For the better part of the past few months, markets have been ripping to new highs. Yet, at the same time, very defensive sectors have been leading.

For example, gold stocks surged by 13% last week, while the SPY “ripped” higher by 0.2%.

Look at some of those gains, courtesy of Exodus.

Year to date, silver stocks are up 241%. Gold stocks are up 182%. Foreign utilities are up 62%.

Aside from steel stocks, which are benefitting from a potential Trump presidency and duties applied to Chinese steel, the vast majority of the top sectors are in precious metals, REITs or utilities.

On the downside, solar stocks are off by 37%, tankers down 30%, and biotechs have been beaten about the head by 24%, year to date.

As much shit that is discussed, GOOGL is only up 1.5% for the year. AAPL is flat. MSFT is up 3.5%. And AMZN and FB are dominating the field with +12% and +18% gains, respectively. The biggest mega cap gains are in defensive stocks like T, WMT, JNJ and VZ. Some of the old aristocracy, including NKE, GILD, AGN, BIDU, GS and WFC are all down double digits this year.

Who needs a bear market with a bull market like this?

It greatly behooves me to report that Jeffrey Hannibal Gundlach isn’t a fan of the ark any more. Moreover, he isn’t a fan of anything. His mood is entirely dire and is predicting doom, as he eagerly waits for it in his mega mansion, sprawling, estate.

The only respite, by the Bond King’s calculations, is to remain inside of the gold mine and wait for the economy to implode.

The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”

Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine, said the firm went “maximum negative” on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent.

“We never short in our mainline strategies. We also never go to zero Treasuries. We went to lower weightings and change the duration,” Gundlach said.

Currently, the yield on the 10-year Treasury note is 1.45 percent, which has translated into some profits so far for DoubleLine.

“The yield on the 10-year yield may reverse and go lower again but I am not interested. You don’t make any money. The risk-reward is horrific,” Gundlach said. “There is no upside” in Treasury prices.

Gundlach reiterated that gold and gold miners are the best alternative to Treasuries and predicted gold prices will reach $1,400. U.S. gold on Friday settled up at $1,349 per ounce.

Gundlach lambasted Federal Reserve officials yet again for talking up rate hikes for this year while the latest GDP data showed disappointing economic growth. “The Fed is out to lunch. Does the Fed look at what’s going on in the economy? It is unbelievable,” he said.

Overall, Gundlach said the Bank of Japan’s decision on Friday to stick with its minus 0.1 percent benchmark rate – and refrain from deeper cuts – reflects the limitations of monetary policy. “You can’t save your economy by destroying your financial system,” he said.

DOOM!

I do agree that the market should be down massively. But, then again, I like to scream fire in a crowded room. My support for treasuries lies in Japan and Germany, where rates are negative. As long as competing government bonds are negative, I believe our treasuries offer a unique arb for advantageous investors.

The empire strikes back. It’s hard to believe just 1 week after U.S. Government officials accused Russia of hacking into the DNC, leaking the emails via Wikilwaks, this cyber attack on Russian agencies is just a mere coincidence.

Perhaps this is an example of 21st century ‘mutual destruction’? Instead of building nuclear silos and long range. missiles, we send out geek squads to shut shit down via the internets.

The hack reportedly targeted a number of government bodies.
A “professional” cyber attack has hit Russian government bodies, the country’s intelligence service says.

A “cyber-spying virus” was found in the networks of about 20 organisations, the Federal Security Service (FSB) said.

It said the hack had been “planned and made professionally”, and targeted state organisations, scientific and defence companies, as well as “country’s critically important infrastructures”.

The malware allowed those responsible to switch on cameras and microphones within the computer, take screenshots and track what was being typed by monitoring keyboard strokes, the FSB said.

I haven’t read anyone discuss this topic today. There are thousands of Germans taking to the streets today, demanding that Merkel step down due to her open door immigration policy. After about a dozen people have been killed in terror attacks over the past week, it appears the German people have had enough.

Horst Seehofer, the conservative premier of Bavaria, said he did not share Merkel’s ‘we can do it’ credo on accommodating the almost 1.1 million migrants and refugees who arrived in 2015.
Speaking after a meeting with the Bavarian government in Tegernsee, he added that the solutions to date were ‘too inadequate.’
Stressing he had no wish to start a quarrel with Merkel’s party, Seehofer said it was important to look ‘reality’ in the face.
An axe rampage, a shooting spree, a knife attack and a suicide bombing in the span of a week stunned Germany, leaving 13 people dead, including three assailants, and dozens wounded.
Three of the four attackers were asylum seekers, and two of the assaults were claimed by the Islamic State group.
‘Merkel must go’ has been trending on social media, with people posting powerful pictures including one claiming that she has blood on her hands after recent attacks.
A new survey found that 83 per cent of Germans see immigration as their nation’s biggest challenge – twice as many as a year ago.

No one really knows how Merkel got the Bundesbank to go along with insane European QE. If you recall, it took a long time to get Merkel to come around to feeding into the degeneracy that was and still is PIGS. One thing is for certain, should a new leader replace Germany, her economic policies with the ECB will come into question, threatening the very fabric of fairy dust that is holding the EU together.

This is a moronic movie. There were very few scenes I appreciated in this hoax of a super hero film. Yes, aside from being a fan of the classics, The Fly has been known to eat popped corn, wearing 3-D glasses, in order to view b grade action movies.

This movie was wildly successful amongst young people and I can see why. It’s fucking stupid.

Don’t waste your time with this drivel.

I’m taking a break from the news today, amidst heinous household events that have conspired against me. I’ll be getting my Peter Jennings on again on Sunday. In case you’re unfamiliar with seasonal trends, the month of August is a great one for passengers of the USS Ark and persons willingly holed up under the numerous protections of the gold mine.

Have a look for yourself.

Specific to TLT, that gains are often bountiful and in an obsequious manner.

I’ve never been known to clamour for ape-raping markets, the sort of sordid affair that sends men off balconies and onto closed manholes below. Until now!

The ark floats.

In case you missed the announcement, the hallowed halls of 12631 has merged with the sacred domain of Exodus, giving our members a ridiculous and gracious edge in the fight against the evil forces trying to sack our coin. Both services are now provided for the cost of one, so be sure to sign up and envelope yourselves in the winship of these two superior financial offerings.

Aside from screaming fire in a crowded room here, inside Exodus I am somewhat pragmatic and I manage a portfolio of GARP stocks that I update twice per annum. It is up more than 12% over the past month. For the new trading room aka 12631, which I am now taking an active role in, I offer five new features.

1. Top long
2. Top short
3. Top high Risk Pick
4. Tactical Pick
5. Exodus Pick

Here, take a look.

Today I booked the gain in X. The stock is higher by more than 70% since I added it to the GARP index and up 27% since I featured it in my high risk pick in 12631. It will remain, however, a directional long in the GARP index, as it is only updated twice per annum.

I’ll be replacing X and possibly adding a tactical position this weekend.

Public service announcement is now over.

Hello there lads from the internets. I write to you from the confines of the auto dealership. My vehicle is in ruins. It just decided to break on me, out from the blue. In addition to that, my central cooling system has imploded. Warmer climes preside over House Fly. Good thing I have two independent systems to comfort me in the event of breakage. Lastly, I’ve been blessed with yet another pinhole leak in my copper fittings, located in my ceiling. All of these blessings can only mean one thing: a great doom and pox awaits you in the immediate term.

I have a rich history with this planet and when celestial beings work in tandem against me, the universe has always offered me great big karmic reversals, propelling me to new highs, in order to restore balance to our dimension.

What do I mean?

I will tell you exactly what I mean.

Utilities are up 27% for the year.

Fuck Google, Apple and Amazon combined. That’s right, I said it. I’m not a fan of the market, as you can tell by my marauding swag. The only thing that I own is this ark aka TLT. Since my position is one of the bearish varietal, coupled with the inexorable facts that horrible crimes are being committed against me today, I can only presume 10,000 blessings of winship is just around the bend.

I’d wish you good luck, but you wouldn’t know what to do with it if you had it.