Jimbo

NEW ETF SUGGESTION Since bankruptcy pump and dump is now all the rage (here's looking at you liar....oops I mean Wire...card). We need an ETF to take advantage of all the robin hooders who are pumping chapter 11 stocks. We need a catchy name for marketing purposes. How about the "Sheriff of Nottingham ETF".

A MODERN FAIRY TALE Once apon a time there was a fairy princess stock market. She was very over valued and wanted to go down. But the big bad FED troll wouldnt let her.

BANKRUPTCY PUMP AND DUMP Thats all Hertz stock is Bankruptcy pump and dump And even the company wanted to get in on the action too...... By issuing stock. The beneficiaries of course being the bond holders. But they were too late to the party As the stock is now in the DUMP phase. What they needed to do is get approval for the stock issue BEFORE the company went into chapter 11. Then they could have used a smart algorithm to dump (oops I mean issue/sell ) the stock to all the robinhooders To maximise their take while in chapter 11.

THE FED PAVLOV RALLY Its just rolling over SImple. Where is the PAVLOV ETF when you need it??????

TWO PERFECT TRADING SET UPS PROVIDED BY THE FED The Fed has provided two perfect trading sets ups for traders to go long in the past year: 1/ In late September 2019 when they threw $500 Billion of REPO to cover up the signal that the REPO market was out of money. That money did'nt go back into bonds, it went straight into an already over valued stock market. Pavlov rally number one. 2/ In late March 2020 when it threw $3 trillion at the markets. Pavlov rally number two. Given the way the Fed is behaving it will provide more opportunities in the future.

THE FED PAVLOV RALLY The size of the rally has been rather rediculous. Looks like it will now roll over.

AND THERE WILL BE TOO MANY SIGNS TO COUNT There were so many signs 1/ The beakdown in the Kraft Heinz over leveraged complex. 2/ The Occidental deal with Anadarko insanity. 3/ The Wework implosion before it could IPO at the joke valuation. 4/ All the IPO pump and dump explosions. 5/ The Dope stock bubble imploding. 6/ The $500 Billion REPO madness from the FED to cover up the REPO market explosion in September 2019. 7/ The major wobbles in Apples stock price....remember Apple has been the leader stock in the whole bull market. 8/ The whole shale oil meltdown....negative cash flow for years on end. 9/ Trillions in bonds with negative rates. Too many signs to count really....the cognitative dissonence was growing and growing and growing.

I HAVE EXITED MY MARCH POSITION I sold my equity position I took on in end March today. I just think that the probability of the trade still being the correct one has deteriorated below the 50% line. I was 90% confident in buying in end March that we would have a nice bounce. Powered to course by the pavlovian response to the Fed bail out. But the pavlovian response is long in the tooth. It appears to be running out of steam. And reality is intruding in a big way. Because stocks arnt cheap at these levels. And the economy has yet to recover. Looking at the charts the rally appears to be struggling. The Fed bail out rally has to roll over sometime.

A DOUBLE PAVLOV So we now have a double pavlov Thats where the Fed had trained all the market players to show a "Buy" response when it whistles "bail out". And the Leveraged Industrial Complex has trained the Fed to show a "Bail out" response when it whistles "we cant leverage up any more" A double pavlov.

THE FED HAS BEEN WELL TRAINED As a domesticated animal the Fed has been well trained by its owner. Who owns the FED The financial industrial complex or more accurately The leveraged Industrial complex (LIC) Its main members are: 1/ The US Government .....leveraged to the hilt...defecit $1 trillion a year 2/ The banks leveraged 10-15 to one. 3/ All the hedge funds engaged in leverage trades. 4/ All the leveraged home owners (and by extension the owners of MBS). 5/ All the leverged commercail property owners (and by extension all the lenders to commercial real estate). 6/ All the buyers of stock on margin. 7/ Just about anybody else using leverage. Yes the FED is owned by the LIC. And when the LIC says "Bailout boy bailout" The FED rolls out it alphabet soup of bail out programs And it prints and prints and prints.

THE FED PUT....what is its value So the feds going to buy junk but only junk that wasnt junk before the virus came. Federally sanctioned debt. Its still a bail out. The fed is becoming a real debt junkie. Perveyor of moral hazard to the financial markets. How much is the Fed put worth right now. Probably over $10 trillion. Its not trading like treasuries any more Its trading like gold!!!!!!!!!!

THE FED RECAPITALISED WALL STREET [alternative title: Not a Care in the World]. No good crisis should go to waste. Surprised there has'nt been more discussion of the CARE Act which sets aside $454 Billion to bail out wall street. The Fed will print $454 billion in electronic dollars. It will then buy $454 Billion of US treasuries. The US Treasury will then give the money back to the FED. The Fed will then put it in a SIV which it can leverage 10 to 1. The SIV will then buy all the toxic crap from Wall Street presumably at 100 cents in the dollar. This will effectively recapitalise Wall street. Im sure this is already reflected in the stock prices of the Wall Street Banks. SIVs were also used back in 2008 when the Maiden Lane SIVs were set up to handle the toxic waste. But the dollars this time round are so much bigger.

Doc I don't really consider this a Bear board. I have never liked bull and bear terminology. By its very nature its limiting...it limits your thoughts. I bought cheap stock at the end of March. The last time the stock I bought was so cheap was after the so callled GFC, in March 2009. Its doing quite nicely thanks. I'm not a bull or a bear. I just want to be right. And that depends on the market. I shows us whether we are right or wrong. Its not the other way around. This rise will eventually role over But is will take time.

THE BIGGEST TYPE OF PUMP AND DUMP OF THEM ALL Yes its Fed pump and dump. The biggest of them all. Powered by endless fiat printed out of thin air. This pump and dump works on entire asset classes.

THE BIG TELL Using poker analogies for asset markets is very useful. On 16 September 2019 occurred the big tell. That was when the repo market rate hit 10%. Where were all the mainstream financial press articles about this. Missing in action. The Fed promptly buried the signal under the noise of $500 billion of REPO printed from thin air. Setting up the mother of all Santa rallies. After all this liquidity flood had to go some where - Into an already over priced stock market. Which I predicted on this board. A lot of money to make a very inconvenient fact/signal go away!!!!!!!!!!!! But the virus uncovered the signal again. So now the Fed is spending trillions to make it go away again. But it will come back in the form of inflation.