When did it happen? When did the stock market become this Las Vegas-like bonanza of disruptors, cult "meme stonks" and God knows what else? It's a once-a-cycle phenomenon, but I promise you it is always caused by central banks. I have quoted Glenn Frey before and I'll do it again: in "Smuggler's Blues" he sang "it's the lure of easy money...it has a very strong appeal."
That's where we sit today after this morning's nonfarm payrolls report, which was kind of a "blah" number. It pacifies the bond market, at least for a day, so no fireworks now. But as I mentioned in my column Thursday, it is only the bond market that can cause crashes in the U.S. equity markets.
But who is calling the tune for the bond market? Fed Chair Jerome Powell and his buddy, Janet Yellen. If you care about monetarism and believe that it drives all financial returns (I do,) then there's really only one chart that matters.
So, as always, I go to the St Louis Fed's excellent FRED database for this chart. The Fed's balance sheet peaked in April at an extraordinary level of $8.965 trillion and has shrunk steadily since then, and last Wednesday read at $8.826 trillion.
The spigot is being turned down, and the bond market has recognized this, as two year UST yields have almost doubled since February.
Where is the incremental cash coming from now? Who will fund a run back to Nasdaq 16,000 from its current level of 11,875? Only you.
The retail investor, or often colloquially known as the "bag holder." I believe that those like Cathie Wood of the ARK fund (ARKK) (down a mere 57.4% year-to-date as of this writing) will continue to fight outflows at their funds by continuing to pump cash-burning, oftentimes borderline-insolvent companies.
My HOAX portfolio is taking a victory lap over such funds. My HOAX has risen 47.71% since inception on Dec. 23. So, I just have to say nothing has changed. "This time is different '' are the four dangerous words on Wall Street. The words you should be focused on are the motto of my firm, Excelsior Capital partners: "Cashflow never lies."
That's how I found energy, and that's how this extraordinary "vast left-wing conspiracy" has been formed to fight the energy industry. Because they know that Exxon (XOM) and Chevron (CVX) will generate extraordinary cash flows over any given economic cycle. Shareholders have benefited from dividends generated by those cash flows for decades, and share repurchases are more of recent construct, but one in which the majors are participating enthusiastically these days.
But when I posted my column on CoreEnergy's "preferreds" (CORR-A) -- which is still looking tasty now trading at 75 cents on the dollar and yielding.9.7% -- on Facebook, it came with a warning message that alerted readers to a link that would show "how average temperatures have changed in their area" or some nonsense like that.
Are you kidding me? What does that have to do with a company that owns oil pipelines in California and natural gas pipelines in Missouri?
But that just motivated me to proselytize more. I am not only winning, but I am doing it against people who are spreading an extraordinary HOAX -- that the planet is melting. There is just no science behind these melting-planet claims, most of which were debunked in the 1980s.
I travel the world and spread the Portfolio Guru gospel. I am in Bogota now. It is seasonably cold and it is raining, as it often does here. I have traveled the equivalent of three circumnavigations of the globe in the past 2 years, and I have yet to see anything out of the ordinary from our Mother Earth. She has blessed us with the resources to support a population that is (with Elon Musk's help) approaching 7.8 billion. Much of that support comes from dead ferns and other carboniferous fauna (there weren't enough dinosaurs to generate all of the oil the world produces; to call them "fossil fuels" is another myth) that help human beings progress toward ... progress.
