Mr. Powell, did the Fed bail out failing hedge funds last month?

New Fed chief Jerry Powell is set to testify Thursday in front of the Senate Finance Committee. In his Tuesday session in the House, Powell hinted that four rate hikes may be needed this year.

I believe today’s discussion will sound more like what I predicted the House testimony should have sounded like.

My big question to Powell would be can he explain what happen early last month where the Fed’s weekly balance sheet reports exploded by $14 billion during the market turmoil surrounding the VIX volatility spike.

From all indications I see, it looks as if the Fed did a three-day QE4 operation in conjunction with the Plunge Protection Team, to buy up toxic VIX short instruments that were way out of the money before some hedge funds would have been forced to liquidate and shutter.

Gun maker shares are falling sharply this morning after President Trump said he was in favor of restricting sales to minors and the mentally ill following the Florida school shooting last week.

In an abrupt reversal from the previous decade where firearm shares would soar on news of a mass shooting for fear of legislation, share prices fell after the Florida shooting.

Now with a Republican leader saying he is open to curtailing some gun sales, shares are nearing 52-week lows on the news.


The Fed’s $14B bazooka bailed out stocks three weeks ago

Earlier this month, on the morning of Feb. 7th, I wrote about their being something rotten in the markets.

The day prior the Dow Jones index moved 1,167 points intraday. I wrote at the time the Plunge Protection Team’s fingerprints were all over the move. Continue reading

Stocks, bitcoin moving higher as volatility is quelled

Please excuse the sporadic posting, still in great pain as a result of my spinal surgery.

Stock markets around the world are back to rally mode with the exception of Japan.

The Olympic euphoria has even creeped into the cryptos with bitcoin up 10% for the day. Continue reading

Hmmm, global markets say ciao to Italeave

Italian voters on Sunday rejected constitutional changes backed by the government, prompting Prime Minister Matteo Renzi to announce his resignation and handing populists a victory in the heartland of Europe.
Despite this seemingly  disastrous news for the future of the euro, global markets moved higher. The euro is slightly stronger on Monday, with global stocks rallying and US Treasuries selling off.
The news of the third-largest EU country beginning the process of exiting has investors shrugging off the idea that Italy’s vote could imperil the European Union and the euro, unlike Brexit.
I see this for what it is:  A massive Central Bank intervention across the globe to stabilize economic collapse since most of the Italian banking firms are teetering with shares across the sector falling 46% this year. Monte Paschi’s shares are down 86% for 2016.
There is no way for this market reaction to have any other invisible hand working behind the scenes. All the tell-tale signs of massive intervention are there.
Stock futures were off 2% an hour before trading and in the manner of 20 minutes prior to the open turned positive and soared 1.5% into the open.
Here in the US the President’s Plunge Protection Team almost always intervenes in the futures market when needing to step in a provide support.
The futures allow them to make large stakes without a huge expenditure and leaves very little fingerprints to their actions.
This appears to be the MO of Monday’s fix on a much broad and coordinated effort across Europe, Asia and the US.
Let’s see if it has legs as European markets close midday here and the US goes into its close?