Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
I was watching Bloomberg interviews with various money managers on Friday. These are not even the beta chaser types, and in fact looked more like deer in the headlights. However, from their remarks one can easily glean that most are drinking the toxic Kool Aid that the sistema is going to back the entire liability side of the global financial system and by extension their personal investments. Among their comments (paraphrased) are these doozies which can only be construed as an hysteria. Even when not making crazy hook statements like these, they are frequently hiding in some obscure financial asset in a corner hoping not to be spotted.
”Buy MBS because the Fed is. Note: MBS now yield 19 bps over treasuries, which in turn yield nothing.
– Next guest says, “Buy munis because in effect the Government has your back. Note: Looks like they may be getting a chance to test their latest du jour bailout theory if Illinois shows up on Uncle’s doorsteps.
– Buy dividend yielders, because you have no choice but to “put your money to work”, and “they, won’t let it go down”.
Another analogy is going into Oahu’s Banzai Pipeline big waves without any idea of how to use a surfboard, enjoy this. What I find interesting about Hawaii and these sports is that they are always named in the memory of some departed surfista or another. I’ve been crushed body boarding in waves one-quarter this size and know first hand the violence of ocean waves. Watch experienced surfers go down at 0:20 and 1:16-1:24. I will be the first to admit that betting against an hysteria and respecting large ocean waves has been costly. And I will be the first to admit I was surprised by the ferocity of the insanity. I now know longer suspect, but believe that when the history of this era is written, a large whale (probably some failed institution) is trying to rig the market to stave off a day of reckoning. As such they have moved right on top of monster Banzai Pipeline waves without a boat to paddle.
Review of various indicators is available at Actionables.
For additional analysis on this topic and related trades subscribe to Russ Winter's Actionable – risk free for 30 days.The subscription fee is $69 per quarter and helps support Russ.s work on your behalf. Click here for more information.
Copyright © 2012 The Wall Street Examiner. All Rights Reserved. The above may be reposted with attribution and a prominent link to The Wall Street Examiner.
