Hedgeye CEO Keith McCullough says that the International Monetary Fund (IMF) is basically losing its mind. It’s very good at taking money and throwing it at a problematic country. That’s nice, but it doesn’t fix anything in the long run. Central planners seem to be content with bailing out anyone who wants one and we don’t like it. Remember: the definition of insanity is to do something over and over again, expecting different results.
Back in America, Chicago Federal Reserve President Charles “Chuck” Evans is pushing yet another round of easing. He wants more of the same thing despite the long-term issues we have in this market. McCullough mentioned this morning that we are going to have “big societal, market and volume problems” until we stop further quantitative easing. Halloween isn’t until October and this is truly scary.
The big money (pensions, sovereign wealth funds, etc.) is trying to do one thing right now: not lose money. Well, how do you do that? You flock to safety. That means US Treasuries, German Bunds and the US Dollar. We are currently long TLT and UUP. Come June 20 when the Board of Governors of the Federal Reserve meets, we’ll truly know what’s on the table in terms of further easing. Until then…