"Cheated" Wall Street

 These days, the market is undergoing turmoil and it seems the panic has suddenly returned and jumped to some extreme level not seen for months. So what's the culprit? Well, we all know that Wall Street is heavily influenced by the Fed and they believe what the Fed is telling them. But in reality, Wall Street has been "cheated" by the Fed, or more precisely by JPowell constantly. Here is what is happening now:

One month ago, Wall Street’s expectation for a 50-basis-point hike in March was just 9.2% due to what Powell has convinced them of a softening Fed policy upcoming. However, right now, it’s exploded to 77.9%. 

From CNBC:

[Earlier this week] Fed Chairman Jerome Powell told a Senate committee that if inflation data stays hot, the central bank likely will raise rates more than it had expected and at a faster pace.

Prior to that, Powell’s recent remarks had indicated that he was seeing signs of disinflation in the economy and had hopes that the Fed could at least hold the size of its future rate hikes to 0.25 percentage point, or 25 basis points.

“Let’s not have a new layer of policy-induced volatility on top of things. But that’s what we are getting,” said El-Erian, chief economic advisor at Allianz.

“It’s a flip-flopping of policy guidance” …

El-Erian said much of the economic anxiety can be laid at the feet of Fed officials, who he said should have held to their more aggressive hikes rather than the 25 basis point increase approved Feb. 1.

“If you stay at 25, you fall further behind on the inflation front,” he said. “It’s a hole that they dug for themselves, and they keep on digging.”

Actually, this is what Powell has consistently being doing!

Quote from Josh Brown, CEO of Ritholtz Wealth Management:

Now listen up and listen good. 

Last May 4th, Fed Chairman Jay Powell told a press conference that “A 75 basis point increase is not something that the committee is actively considering.”

Five weeks later, the Fed hiked rates by 75 basis points. Then he did another 75 basis points, then another 75 basis points, then another 75 basis points. Four in a row.

So today, when Powell goes out of his way to tell you how high rates are going to go and for how long they’ll stay there, remember that he doesn’t even know what they’re going to be doing next month, let alone by the end of the year.

The Fed’s forecasts are as worthless as anyone else’s. That’s why they say they are “data dependent.”

Invest like an adult, not a child who believes in clairvoyance.

Actually beyond Powell, it's not like the Fed has a good track record...

• It kept interest rates low in the 1920s. That helped inflate the 1929 stock market bubble. Then, it made the Great Depression worse by jacking rates up too quickly.
• The Fed didn't fight inflation hard enough in the early 1970s. Then, once it took inflation seriously, it caused two recessions – one beginning in 1980 and another starting in 1981.
• Decades later, then-Fed Chair Alan Greenspan's loose monetary policy contributed to the dot-com bubble. And the Fed's policies after the dot-com crash contributed greatly to the housing bubble.
• Now, the Fed is likely making another big mistake – either by not hiking rates fast enough or by hiking them too fast. It's hard to tell at any given moment.
  

We'll have the next Fed meeting in less than two weeks. For sure we will see a lot more volatility in between as Wall Street is still trying to get a sense of what is coming up from the clueless Fed!

I don't know what will look like one week from now but for early next week, I bet the chance is very high for a sizable rebound due to extreme panic and oversold conditions we are seeing now.

 

The Idiotic New Green Deal

What's wrong with AOC and Greta Thunberg and the other climate crazies like them? Almost every time I turn on the tv I see them yelling that the world will end if we don't stop global warming.

The sad fact is their hysteria is not driven by scientific evidence.

If science does not support their claims and if their alternatives cannot replace carbon-based forms of energy, what do they really want? What's the real goal of those attacking major energy companies and energy-producing countries?

They preach about the benefits of electric cars and solar power.

But in 2021, only a mere 15% of US electricity came from wind and solar power. And there's a reason for that. They're not very good. Wind turbines don't work when the wind doesn't blow…

Solar panels don't generate electricity at night or in bad weather. As sources of energy, they are intermittent and unreliable.

Both can contribute to the energy grid. But neither can support the grid.

Here's another thing Biden, AOC and the Dems haven't seemed to grasp…

A modern electric grid requires a constant minimum baseload of power just to keep operating. That baseload can be provided by coal, oil, natural gas, or nuclear power but it cannot be provided by wind or solar.

And then, there's California. California liberals love to brag about how smart and "green" they are.

In August 2022, California passed a law banning the sale of cars and trucks that run on gasoline or diesel beginning in 2035.

"Just buy electric cars!" they said. But a few days later, it got hot. And the next thing you know, California announces its "green" power grid is unstable. They warn of rolling blackouts and then tell people not to charge their electric cars.

The fact is so-called "green" energy – wind, solar, geothermal – just does not work.

As former Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee told Fox News "We have prioritized ['green' energy] over reliability and, sadly, it is going to take catastrophic events to recalibrate things."

And here's the real kicker. Almost 80% of the industry's campaign contributions go to Democrats. But the Dem's ideological support of "green" energy isn't just idiotic. It's hypocritical. Because while they're lining their pockets with campaign dollars from the "green" energy industry.

The truth about Climate Change is simple.

The climate is changing. It has been changing for billions of years. Climate change is one of the most complex phenomena ever addressed by science and one of the most difficult to model and predict. The nature and causes of climate change are a worthy challenge for the best scientists using the most sophisticated modeling tools and computational power available.

Unfortunately, the subject of climate change has been taken over by a group of pseudo-scientists using badly flawed models, selected data, and hyperbolic claims amplified by a largely ignorant media and opportunistic politicians looking to increase their own power.

Remember this…

Oil and gas are NOT going away.

They are too important, have too many embedded structural advantages and have huge economies of scale. Once politicians and the media become more aware of the real science of climate change and distance themselves from the false science of climate alarmists, the oil and gas industries will regain their footing.

There are opportunities in energy companies today that will rally in the years ahead as the continuing need for carbon-based energy becomes clear. Companies that will play a role in providing the energy the world will need for decades to come. Yet the market still underestimates the profit opportunities that lie in the future.

Jim Richards

Can we trust this bullish run for TSLA?

After being cut off about 2/3 values and bottomed around $100 late last year, TSLA has mounted a strong revenge rally with an over 100% gain within two months. With this rather impressive rebound, the million dollar question now is whether this rally is sustainable and will continue as a new uptrend for it.

Based on what we can see below from its TA chart, I doubt a new bull trend for TSLA has already started. Rather, there is a good chance we may see TSLA back towards the major support around $150ish. If not holding up at that level, then watch out for the low testing again around $100 in the weeks ahead.   

This trend is super bullish!

We all know Trump's famous mantra: Make America Great Again or MEGA! A big part of it is to bring back home the manufacturing capacity again. While he has done and accomplished a lot during his tenure, more momentum is accumulating in this super bullish trend to fulfil his dream. Here is one analysis about this trend. From the investment perspective, betting on this trend will be quite profitable for sure.

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We call this trend "Made in America Again." And it will lead to a renaissance in U.S. manufacturing.

Last month, we told you this trend will unleash an estimated $1.6 trillion in the U.S. economy.

That's based on four federal laws enacted over the past two years. They are:

• The Investments and Infrastructure Act. This allocates $1.2 trillion to build U.S. infrastructure for a new generation of industrial facilities over the next several years.

• CHIPS and Science Act. This $52.7 billion bill is hyper-focused on ensuring America reclaims its lead in semiconductor chip design.

• Inflation Reduction Act. This bill provides $250 billion for clean energy technologies and new, state-of-the-art factories for building them.

• COMPETES/United States Innovation and Competition Act. This is a $51.5 billion grab bag of government spending, with funds going toward increasing U.S. production and reducing supply chain vulnerabilities.

The above spending is contingent on private-sector companies completing specific projects through approved government contracts.

Much like the highway system, that initial investment today could lead to massive returns for the private sector.

According to the Reshoring Initiative, nearly 300,000 jobs were reshored in 2022. And companies have reshored more than 1.2 million jobs since hitting a low in 2010… with most of those gains coming in the last three years.

For instance, chipmaker Micron Technology has already broken ground on a $15 billion facility in Boise, Idaho.

And thousands of manufacturers have already committed to bringing billions of dollars' worth of production home, including Intel, Absolics, and Taiwan Semiconductor.

All told, nearly 4,000 companies involved in manufacturing are looking to bring their workforce stateside.

Given the rising mentions of reshoring on corporate earnings calls, it's clear that this trend remains in its early stages.

The World Bank estimates that infrastructure spending has a multiplier effect of 1.5. In other words, every $1 of infrastructure spending will lead to a direct $1.50 in economic benefits.

So, the $1.6 trillion in spending could lead to a $2.4 trillion immediate benefit for the private sector in the first few years.

Green New Scam: The Dirty Little Secret

A Note from Jim Rickards: The New Green Deal calls for public policy to address climate change and increase reliance on renewable energy. But it's all a scam. It's a financial hijacking conducted by people who hate America and love wealth transfers to socialist and corrupt nations around the world. Below, I reveal the dirty little secret behind the climate alarmist agenda and detail how understanding the elite's Green New Scam and the reality of real energy reliance can benefit your portfolio and financial future.

Click here to read my newest report Green New Scam: The Dirty Little Secret.

Short squeeze ongoing

It must be a brutal day today for those who have been aggressively shorting the market. Since the market had been quite pessimistic for two weeks, the investor's sentiment has turned to extremely bearish, which apparently had ignited many traders to short the market....aggressively by many. Then, the market suddenly turns around and all the shorts are squeezed bloodily with today's relentless up moves.  

As the famous Wall Street old saying goes: the Market God wants to punish most people the most!

 So if you start to feel bullish now and wants to chase the market, be aware of the above warning. For sure it looks like the market may still have some room to go up, it has already used up a lot of energy and it is quickly coming to its up resistance that will stall its momentum. After all, this is still a dead cat bounce. Its next leg down will be more powerful to the downside!👽