With many people wondering what’s next for the markets, Bill Fleckenstein discussed the FOMC’s announcement, the effect of QE4, and will blockchain impact gold?
By Bill Fleckenstein President Of Fleckenstein Capital
March 15 (King World News) – Overnight markets were essentially a nonevent and for those who were expecting something exciting and new from the Bank of Japan, they were disappointed, though I can’t really believe expectations were very different from reality…
In a King World News interview I spoke with the man who predicted the Swiss National Bank would experience staggering losses and that the Fed would also experience massive losses that will destabilize the global financial system! His company is the only one in the world offering a precious metals investment service outside the banking system, with direct ownership and full control by the investor. He has also become legendary for his predictions on QE, historic moves in currencies, and major global events. To find out what he and his company can do to help answer that age old question for you CLICK HERE.
Bill Fleckenstein continues: Most equity indexes saw small losses last night, as did the SPOOs, and equities in the U.S. traded over 0.5% lower through midday, as short-term oriented traders positioned themselves for tomorrow’s FOMC announcement. That too is liable to be a nonevent, just like the BOJ’s last night, but that doesn’t mean markets won’t move as people try to outguess each other’s guesses.
In the afternoon the market firmed up, and with an hour to go, when I had to leave, the Dow was flat while the Nasdaq was 0.5% lower with the S&P roughly in between. Away from stocks, green paper was generally stronger, though weaker against the yen, as it continues to defy the BOJ policies by showing strength. Oil lost 3%, fixed income was a nonevent, and the metals were a bit weaker, with silver losing 0.5% and gold just a couple bucks as it bounced back from slightly bigger losses overnight. (The miners were mostly slightly green, for what it’s worth.)
Probably the most important question regarding our stock market is whether the S&P has in essence finished its rally at approximately the 200-day moving average. I don’t think we can say for sure until we see more trading and of course whatever nonsense occurs after tomorrow’s FOMC announcement.
Watch Out For Those Slide Effects
In the concentrated-positions-slash-hubris department, Valeant Pharmaceuticals was crushed today for 30% after preannouncing worse numbers and an inability to file financial documents. For those who haven’t been paying attention, Valeant was a leveraged rollup price-hiking drug company that has a rather concentrated ownership among three funds. I can only imagine the amount of redemption pressure that these entities must be seeing.
The reason I bring it up is because we all have positions and ideas that we fall in love with and sometimes we have to be alert to signals that we are getting it wrong, at least in the short run or potentially in this case, forever. One would assume that these large holders thought they knew everything there was to know about the company or they wouldn’t have amassed the position sizes that they did. It just goes to show that you’re never too big or too sophisticated to wind up with an immense problem on your hand if you’re not careful. It also demonstrates why I have advocated so often for folks not to average down in ideas once they have a full position, except in the rarest of circumstances.
Included below are two questions and answers from the Q&A’s with Bill Fleckenstein.
Question: Bill take a look at this article by Ambrose Evans Pritchard. How does Blockchain impact gold? Larry lindsey expects some new version of currency which blends fiat and specie (gold). What are your thoughts on these two topics?
Answer from Fleck: “I don’t think the Blockchain impacts gold, it is a way to make transactions, and gold is a store of value. I can’t answer broad based “thoughts” questions. Please ask me something specific.“
Question: Thank you for sharing your wisdom throughout the years. If and when the Fed implements QE4, would you expect mortgage rates to make new lows? I ask because several people I know are in a rush to refinance before rates go back up. I’m not convinced that February was the last big dip in rates.
Answer from Fleck: “I just don’t know. If we ever see rates back up for real, after a QE implementation, it will be a very big disaster. And it will happen one day. Will that be when QE4 occurs? Maybe, but there is NO way to predict that.”
***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.
***KWN has now released the incredible audio interview with former White House official Larry Lindsey, where he discusses the coming chaos, gold, and how to take back control of our money, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Here Is What Draghi And The ECB Have Just Unleashed Upon The World CLICK HERE.
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