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BookmarkWith many people wondering what’s next for the markets, today a famed short seller warned that the nightmare outcome will occur in the blink of an eye.
Overnight equity markets took the night off from the recent partying and were slightly lower. After the recent rampage here the market was back to dull nothingness, as the indices meandered around unchanged all day…
Bill Fleckenstein continues: Away from stocks, green paper was weaker again (though closed off its lows), as it appears the self-sustaining recovery accompanied by multiple rate hikes fantasy regarding what the Fed is liable to do has finally pretty much evaporated, at least in the FX market. Oil was flat and fixed income was higher, as were the metals, with silver gaining 1.5% to gold’s 0.75%.
Can We Warm Up That Pie In the Sky For You?
Once again there isn’t really much to say about the current state of the equity market. The question is whether these prices can be maintained as we go through earnings season. Some companies will have received a boost from the unseasonably warm weather in Q1 this year versus last year, while others won’t be impacted, and in Q2 we will see the opposite. Thus, in the last month the reaction to bad news has been pretty macho. I don’t think that can continue, but then again I certainly didn’t expect the market to be as strong as it has been since the February lows.
What is not debatable is, at the margin, more people are starting to see central bank policies as the central planning and errant failures that they are (for that matter, how could anyone expect anything else from “monetary policy by committee” with academics in charge, or any group of economic know-it-alls?). Of course, the number of people who see it that way could probably hold a meeting in a phone booth, but over time that will change, and when it does the nightmare outcome goes from being impossible to inevitable in the blink of an eye. At this juncture it is impossible to say if that will be next month or two years, all we can do is wait for signs that psychology is changing.
King World News – Bill Fleckenstein – The Longer A Mania Goes, The Worse Off Everyone Will Be When It Ends – The Aftermath Of This Is Going To Be Extremely Brutal, Plus A Bonus Q&A
Included below are three questions and answers from the Q&A’s with Bill Fleckenstein.
Bonus Q&A
Question: Do you think the large commercial short position from the recent COT is a cause for concern in your expected catch up move in silver?
Answer from Fleck: “It isn’t that large in silver, but it might mean that it isn’t ready to happen yet, though in the long run it doesn’t mean much.”
Question: Demand for physical gold from China and India has apparently declined in the last couple of months or so. Do you have an outlook for physical gold demand from Asia over the next several months? I would think that an outlook on gold of only a few months is of little consequence for physical gold demand over the next 3 to 5 years.
Answer from Fleck: “Apparently” is the problem. Did it decline or not? Besides, month-to-month data is noise, and a lot of it may or may not be that accurate. In case you weren’t aware, India has a lot of smuggling, which isn’t in the data, and the tax situation is what has stalled buying in normal channels.
Question: Bill: Larry Lindsey did an interview with Eric King:
Larry Lindsey Interview
He said nothing that regular readers haven’t heard, but somehow coming from such an insider, it is still surprisingly blunt. As to Yellen, I have to say that I am unclear how you get more “gradual” than raising rates by 25 basis points in 10 years. Just thinking out loud.
Answer from Fleck: “The Fed is so far out of control it is just maddening, but no one will object until we have a huge accident.”
By Bill Fleckenstein President Of Fleckenstein Capital
March 31 (King World News)
