That's it, I have had it, and I am not going to take it anymore. I'm talking about today's market surge and how, somehow, it isn't real because it is being engineered by the Federal Reserve, and it all has to end badly.
You know what? On a day when the S&P 500 hit an all-time high of 3000, and the other averages broke out, too, I am going to end this bubble talk right here, right now.
Yes, it is true that the stock market was looking down today, before we saw Fed Chair Jerome Powell's dovish testimony to Congress about a weakening economy. It is absolutely certain that the rally in the morning belongs to Powell, who admitted that the economy is slowing and that tariffs are threatening to slow it even more. That's all true.
But he forgot to mention that his own December rate hike played a role.
Then again, if he didn't pin the tail on the tariffs, he wouldn't be countering the endless hectoring he has had to endure from our president. His speech and his answers to questions made it clear that he will cut rates, maybe as soon as July, if there is no end to the deterioration, and it sure didn't sound like he thought there would be one.
Those negatives and his talk of a rate cut ignited the market. But just as stocks were going up we heard endless chatter from so many commentators and managers that it's all one big hot air balloon, a virtual dirigible, bound to crash somewhere in Lakehurst, New Jersey -- just like the Hindenberg disaster in 1937 (oh, Google it and learn something will you?).
I think these commentators are a bunch of gas bags slinging hot air at you, and here's why.
First, what the Fed can giveth, it can take away, as we saw in the fourth-quarter, Fed-engineered minibear market. That's when Jay Powell got the economy wrong and thought it was accelerating, when it was actually decelerating.
The man crashed the market, as any chart can show you.
So, if he can crash it and we blame the economy, as most did and not Powell, shouldn't he be allowed to resurrect it? Why is he only allowed to crush the market and not help raise it? Why is he not allowed to at least do things that make the economy better that ultimately -- or instantly, as is the case today -- raise stocks? Where is it written that somehow that's not cricket or kosher or whatever thing get you to be thinking hunky dory?
But there is a more important point to be made here. One of the few benefits of aging is wisdom, and I can tell you that I've been investing since the S&P 500 was at 87. Remember, today it hit 3000? And I have seen this process of the stock market rallying on rate cuts the whole darned way.
Is it really possible that the entire time has been one gigantic bubble? Can we really say that it's all Fed, Fed, Fed and that's all that matters?
I think that's some of the least rigorous thinking possible. Let me tell me give you five reasons why.
First, and most obvious, there's an incredible thing about stocks. They may just be pieces of paper, but you can cash them in and take them to the bank and put that cash into a savings account.
Now, maybe it's because I bank at JPMorgan (JPM) -- the Morgan of the fortress balance sheet, the Morgan of J. Pierpont or J. Dimon or whatever -- but when I go there to deposit my so-called winnings from the big Fed bubble, do you know that they never once asked me how I earned it? Not once did a teller say, "I can't take that money, it was made by Bernanke, or Yellen or even that rookie Fed chief, Jay Powell."
As much as I love artificial intelligence and machine learning, do you know that no ATM has ever questioned the bona fides of that stock-market earned money.
And even in this era of paperless balances and statements, do you know that there is no asterisk on my bank balance? I checked the ATM slip just today. Couldn't find one. Can you imagine?
So you get my point: It's money for heaven's sake and you earned it, because you took the risk of investing in companies that enjoy the American and worldwide bounty.
Second, yes, we are inflated by money from overseas. But why should the best country's stock not win? Where is it written that because we have Donald Trump in the White House, money shouldn't come here? For all I know, he makes it more attractive to overseas investors.
I do know this: Stocks are denominated in dollars and the dollar, despite the president's efforts, is one of the stronger currencies in the world. Darned thing is a magnet for money. If you can buy an American stock with a good dividend rather than another stock in a debased currency, then so be it. Oh, and purists take note: You may not like the so-called bubble that Powell has given us by talking about uncertainty; you might, instead, want stocks to rise because he says things are great, even if they aren't. Then you should go invest in other countries. Everyone, every central banker on Earth, would kill for our bubbles, because they want to engineer them and can't get them off the ground, like Germany, for example, to belabor the Hindenburg analogy and why not, didn't I command you to Google it earlier?
Third, it is true that our stocks may be the only game in town. I have heard all day that the game is rigged for stocks to go higher. You wish. The fact is that inflation is so low and demand for money is deteriorating so fast that interest rates just don't give you the bang for the buck that decently yielding stocks do.
Fourth, it is true that I would prefer that stocks go higher, because of economic growth. Why not be supportive, if the Fed is taking action to boost economic growth. If you thought the economy was going to slow down and you were worried about stocks then you should be willing to take on more risk, and stocks are inherently risky assets-given what Powell said today. You are getting a jump on better times.
Fifth and finally, I am so sick and tired of hearing that it's all about the Fed. It's all about the companies for heaven's sakes. Sure the sector, and the asset class matters, but if you invest in the best companies, you are going to make money over the long-term with or without Powell, or Yellen, or Hamilton for that matter. And for the millennials out there, Hamilton's not just a play that's still hard to get a ticket to, the guy was also the Treasury Secretary who hated George Washington, father of this country for heaven's sakes.
Now, what do I mean by saying that there's more to it than Fed bubbles, it's that there is such a thing as ingenuity, as competitiveness and the power of invention.
I will tell you what I mean when we look at the Top 10 stocks that got us from S&P 2000 to S&P 3000, because they are all examples of sheer, raw brain power and technology at work right in front of you, almost purloined-letter like, I say almost because I can't ask you to Google too much.
But the bottom line is, save the bubbles for the bathtub, the dollars you can make in the market are real, and they are spectacular.
JPM is a holding in Jim Cramer's Action Alerts PLUS member club.