We Listen to Bernanke So That You Won't Have to...
By Adam Lass, Market Report
I know more about who will die in the next Harry Potter book than Ben Bernanke does about where the economy is now or will be in the next six months.
What’s more, it’s far more likely that yours truly will magically jump into said tome and save someone’s life than that Zen Ben will somehow morph into the role of a real Fed chairman, and actually act on any of the concerns he himself has stated.
Quite honestly, neither is going to happen anytime soon. And that’s my point.
Let’s start with the trivial before we move on to the slightly less than sublime. The new Harry Potter book is due out sometime this week. Apparently, several wiseguys have attempted to drive up their Web hits by posting what appears to be screenshots of the book prior to release.
Now it seems that the “Hogwartians” have some time on their hands now that they are done waiting in line for Apple iPhones. So they have taken to flooding these sites trying to be the first to know who gets the literal axe. Except each site has a different text. And some are in Russian. Oh, and both the real publisher and real author swear that all are counterfeit. And dead wrong.
Speaking of counterfeit and dead wrong, our supposed Fed chairman is undergoing his semiannual congressional grilling. I have been paying close attention to same, primarily so that you won’t have to.
The gist of his output? Yeah, the economy is slower than he said it would be a while ago, but it should pick up a little if we are lucky. But only a little.
He doesn’t really give any reason for this expected “moderate pace of growth.” Nor does he give any believable reason as to why it has repeatedly fallen short of his expectations. He did mumble something about the housing bubble, but surely that is no longer news to anyone.
Surely.
He also mentioned as to how inflation remains quite stubborn. Just won’t seem to go away no matter how many candles he lights. However, he does promise to light even more candles in the future, and anticipates that eventually this method of economic manipulation will get traction.
Rates, you ask? Is he going to do anything with rates? Raise them to stop inflation and the steady decay in the value of the dollar? Lower them and give the moribund economy a kick in the pants?
Naaah. Word has it that he will instead do his best to beat the record he has already set as the most passive chairman in the history of the office, by doing absolutely nothing ratewise for the rest of this year.
As for next year, your guess is as good as mine. And probably a lot better than his. Meanwhile, you had better adjust to the idea of a free-falling dollar, and of course, rising oil (come on guys: that one is easy: if you buy oil overseas with a shrinking dollar…)
Stockwise, this means more bad news for big-item retailers: that means GM (ooooh, I hate GM). And good news for energy stocks of all sorts (ooooh, I love energy stocks), including both our front-door plays like the S&P Energy SPDR (XLE:AMEX) and El Paso (EP:NYSE), and our backdoor plays like Archer Daniels Midland (ADM:NYSE) and Monsanto (MON:NYSE).
By the bye, WOW portfolio options for both of these backdoor players are in the black, but it is still not too late for newcomers to buy in… at least not yet. I wouldn’t dawdle though, as I expect prices to rise quickly here.
Finally, it seems that some of the key players are learning to recognize the difference between a home builder and a commercial property manager: KeyBanc Capital Markets just upgraded Boston Properties (BXP:NYSE). WOW readers should recognize that name as it represents a goodly chunk of the iShares Dow Jones US Real Estate (IYR:AMEX). Now that this news is starting to spread, I would imagine we can expect some good things to happen to your calls against same.
Outside Links
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