03-25-2020: Too Many Cooks Spoil the Broth

Without denigrating any politician (at least not trying to), is it any wonder that they can't get a bill out of Congress with more money (pork?) in it than any bill in history by orders of magnitude? I'll bet the number of politicians/staff with their hands in the goo is measured in the hundreds... maybe thousands. That's just too many cooks in the kitchen.


I am sure 'some' of our representatives see the big picture and realize that when the world's economy comes to a full stop (including our economy), if you don't keep it alive (fiscally), then even when you solve the coronavirus issue (and they will), if the country is in a deep depression, climbing out will not be easy... people's lives will have been destroyed... many businesses would never come back.


The stimulus bill is, as I said in yesterday's blog, a ventilator for our economy, which is in ICU and unable to breathe.


But, some of our esteemed representatives are more interested in their next election and accumulating more power for themselves than saving our economic way of life. The economy be damned so long as they get their pound of flesh to fatten their own pathetic political lives. I just hope everyone knows which of these politicians are truly representing our best interest and which ones are not (very hard to know). I hope everyone of the pork-barrel hacks involved in this massive bill are voted out of Congress come this fall.


Here is my take on the market... I expect the stimulus bill to get out of Congress and on the President's desk sooner or later. When it does, I expect the market will pop to the upside, but not nearly as much as it has moved over the last couple of day. Most of the euphoria is already spent. This is becoming more of a buy-the-rumor and sell-the-news event, I suspect.


I am definitely selling into any rally after the bill is out of Congress.


Once the market realizes that the trillions of dollars that the government is pumping into the economy will do little to nothing in the way of getting people out of their self-quarantine and back into a vibrant, consumer-driven economy... and once the second quarter earnings reports begin to filter out... and once the market realizes that there are likely going to be an onslaught of bankruptcies, the likes of which we have seen since 1929... this market could have a hard time finding a bottom. I could be wrong, of course... and that is why I rely on stops; just in case the trends and the data are wrong.


This market is headed lower in my opinion and we will take advantage of it if it does. If, on the other hand, the market bottomed this week and will now begin its V-shaped recovery, we'll jump in with both feet to take advantage of that market, too. I just do not see a V-shaped recovery anytime soon. I suspect it will be a flat-bottomed U-shape and we are a long, long way away from the bottom.


I bought some 2x inverse ETFs today (in ULTRA-MAX), pretty much at the high for the day. I am holding back on the planned inverse ETF buys in the other portfolios until after the much anticipated post stimulus bill pops the market. I am still on the same buying strategy for each of the portfolio models that I wrote about in Monday's Client Letter. "Buying", in this case, means buying inverse ETFs.


Stay safe, wash your hands... assume everyone you see outside your home is a lethal infection just waiting to share... stay home if you can.