“Insanity: doing the same thing over and over again, and expecting different results.” -Albert Einstein
Albert Einstein’s famous quote on insanity is rather apropos today in light of the Bernanke Fed’s shameful decision to shirk its duties and avoid tapering yesterday.
As I wrote in my morning newsletter, I’m going to keep this missive tight. Because if I really ranted about what I really think about what Ben Bernanke just did failed to do, I might lose some of my firm’s clients and have the NSA parked outside of my house.
Here are some quick observations regarding the implications of the Fed’s unfathomable dereliction of duty.
- The US Dollar has been bloodied. It has been beaten down to 3 month lows by our un-elected, unaccountable, Fed Chief. Thanks Ben.
- Bernanke just confused every Institutional portfolio manager I talk to. Implied volatility is going up on this decision. You can take that to the bank.
- Unsurprisingly, Asia ripped higher on Down Dollar. India up +3.7%, Indonesia up +4.7%, Thailand up +3.8%. Nikkei up+1.8%. Other Emerging Markets that love this US Dollar Debauchery? Take a look at Turkey. It shot up +7.6%.
- Witness the new highs in Europe. It’s across-the-board for the majors; FTSE up +1.4%, DAX up 1.2%.
- Vladimir Putin? He loves Bernanke’s Dollar Debauchery. That’s a no-brainer. It lines his pockets. It means up Oil. Russia up almost 4%. Just great. Got #CommodityInflation?
- The good news is that if you’re a gold bug, Bernanke may have saved your precious metal from totally crashing to earth (at the expense of the purchasing power of the American people). The bad news is our Fed overlords have decided to keep the oppressive oil tax intact on average Americans at the pump (Down Dollar, Up Oil). No, not good.
- Growth, as an investment style factor, has been smoking slow-growth in 2013 year-to-date. That may very well change now. More to be revealed.
Bottom line: It was a great day for US stock market bulls. But a very sad day for America.