I'm calling it "buy and scold." That's the only way to describe the hypocrisy I see and hear every day from money managers who trash Jay Powell for his transitory comments and his desire to keep things growing and then buy the heck out of the market as if nothing's wrong and we are in a fabulous bull market.
How these money managers get away with this duplicity is incredible. They skate by criticism as if having your cake and eating it too is second nature and rewarding.
Think about it. How many times have you heard Powell be castigated for hosing a red-hot economy with gasoline, just burning the economy to a crisp and then tell you that they are buying Starbucks (SBUX) , Disney (DIS) and Target (TGT) to play the great reopening? It is commonplace to disparage the man who saves us from a second Great Recession and then say you like value over growth, or some other gibberish, including JPMorgan Chase (JPM) , Ingersoll Rand (IR) and Caterpillar (CAT) .
Yet this causes no revulsion or criticism. Honestly, if you believed this rhetoric you should be 100% short because what you are really implying is that Powell is going to have to play catch-up and slam the brakes so hard that the whole economy is going to go through the window. Or if you are in to plane analogies, you are looking at a hard landing where no one survives. Or if you are truly clever you spew nonsense about stagflation, how we have inflation but no growth.
Under any of those scenarios you should be shorting the banks on every move up and betting against anything even tinged with industrial, retail or energy. You really don't want to touch anything but bonds because inflation will erode even the value of the beloved FAANG plus an M.
Do you ever hear that, though?
Nah, they be buyin' and scoldin'.
It gets worse. Many of these hypocrites were talking in May about how Powell has let the economy run so hot that you have to sell Home Depot (HD) and Lowe's (LOW) because of skyrocketing lumber prices -- oh my how much they love that adjective -- and they were carrying around their beloved Freeport-McMoran (FCX) and Caterpillar like lovey blankets. Could they get enough Boeing (BA) , even as it is very clear that the company has now reached the under-managed, remote stage of management.
In the meantime, the entire commodity complex save oil -- artificial because of supply constraints -- and natural gas -- because of export demand and supply mismatch -- has been relentlessly pummeled.
Do you hear them come on ever and say, well, you know looks like Powell got commodities right but he sure can't get freight right or ports right?
Now, though, I am going to let you in on a little secret. As part of my third job as restaurateur I try to speak to as many of my compadres as possible. For the first time I am hearing that people want to take jobs, lock in jobs, for fear that the minimum wage will be the price they have to pay to get a job in October. Now, of course, you are hearing a ton of stories about how we can't find any burrito makers or truck drivers but then again it is barely worth it to work if you can sit and day-trade while the benefits keep you at home. I think that transitory will increasingly mean the adjustment to work at home and that's even beginning to settle down. I also expect a roughly 40% increase in the fully featured semiconductors that are so coveted.
Put it all together and you are going to see managers who should, theoretically, eat crow, but won't because they have been busy buying and scolding. They can't afford to miss out. The ones that run what's known as a "book" of long and short can't even find good shorts lest the Gen X run them over, but soon the Gen X will be told to turn the phones off and get to work.
I say the hypocrisy must end. You hate the Fed, you own up to why you are buying. Or just keep lying. It's been a real good strategy so far. Not as good as saying hell is coming and then buying your dip, but deliciously duplicitous nonetheless.
