Today’s “genius du jour” is Jeffrey Gundlach – who has been marketed as the new “Bond King,” for simply having been lucky enough to be the “least dirty shirt” amongst a sea of mediocre portfolio managers. Like Warren Buffett, who “perfectly timed” the start of his career with a multi-decade equity bull market; or Donald Trump, whose gluttonous affinity for “1%” real estate coincided with the Fed’s cancerous foray into unprecedented wealth disparity, Gundlach was one of many fixed income “portfolio managers” lucky enough to be running bond funds when the Fed decided to not only take interest rates to zero, but keep them there – likely, forever.
Given that I’m at the gym every morning, and CNBC is constantly interviewing him, I’ve come to get a feel of his views. That said, take heed of these simple Wall Street truisms before taking what he – or any portfolio manager or “analyst,” for that matter – says to heed. For one, from a marketing perspective, it’s imperative for bond managers to purport bearishness – as weak economies tend to “yield” increased bond buying. Second, when one owns so many bonds, the last thing they want to do is publicly speak of an expectation and/or need for higher rates. Which is probably why he has, like myself, called for the Fed to hold off its planned (or so we’re told) “lift-off.” That said, he’s said plenty of intelligent things to back up his contention. In other words, he’s no dummy about the economy. He knows it’s collapsing – which fortunately, is good for his business. At least, until “bond vigilantes” inevitably show up and sell bonds en masse, fearing the hyperinflation Central banks always foster.
That said, he’s still a “mainstream” portfolio manager. And thus, like Jim Rogers, Marc Faber, and countless other economic “bears,” he still must “talk the Wall Street talk” if he wants to be interviewed by CNBC and other mainstream liars Pied Pipers media outlets. To that end, equity “portfolio managers” are incented by higher stock markets. And thus, have allowed themselves to be brainwashed by the incessant “recovery” propaganda spewed by the “evil Troika” of Washington, Wall Street, and the MSM. And since not only are discussions of market manipulation frowned upon by the “powers that be” (despite countless admissions and convictions of such); but completely off the radar of 99% of the duped population, there’s not a chance he’d ever “get it right” when speaking of the “markets” he’s been given billions of other people’s money to navigate. Thus, I wasn’t surprised when he last week espoused that overvalued stock markets haven’t yet crashed because “people are still holding and hoping” – suggesting that there’s a lot of money that still believes Central banks have the ability to “save us”; when in fact, nothing could be further from the truth.
Yes, the vast majority of said, brainwashed portfolio managers are certainly hanging on. However, they have no choice; as in the portfolio management business, the largest “career risk” you can take is being short – or even neutral – when stocks are rising. In other words, it’s OK to lose your shirt when everyone else is – as was the case in 2000, 2008, and, well, today. But you can never, ever lose money when the market is rising – which is why at least 90% of so-called “hedge funds” are nearly exclusively “long,” when by definition they should be closer to “market neutral” (i.e., dollar value of shorts equals dollar value of longs). Trust me, I worked in the hedge fund business for three years, and wrote research catered to hedge fund portfolio managers for seven more.
No Jeffrey; and Warren; Donald; and everyone else that believes markets are “freely-traded,” and that there is still widespread ownership of stocks, bonds, and real estate. The public left stocks when they lost their shirts in 2000, and real estate in 2008. Thus, all that remains are a handful of dying “hedge bombs” – who chronically underperform the market due to their lack of understanding that it is not a “stock pickers market”; but instead, one in which the PPT spends every minute of the day buying stock futures; thus, causing equity indices to rise, irrespective of the massive weakness of so many individual stocks.
Heck, several Central banks actually admit to supporting stocks the way their “ZIRP”; “NIRP”; and “QE” programs support bonds – most notably, the Banks of Japan, Switzerland, and China. And trust me, the Fed is every bit as aggressive in supporting the “Dow Jones Propaganda Average” – which they goose essentially every day in the thinly-traded overnight markets; followed by the period directly after “open market operations” are conducted, at 10:00 AM EST. And of course, the ubiquitous “Hail Mary” rallies that boost prices, and sentiment, in the day’s final hour.
Conversely, Precious Metals are capped and/or attacked at no less than nine unofficial “key attack times” throughout the day; and any other time such actions are warranted (such as, if prices attempt to rise for any reason). I’m not going spend today’s article writing of said manipulations, as I do an awful lot of that already; and unquestionably, will relentlessly do so until every sentient being with an open mind realizes it. To that end, I’ll simply highlight three highly relevant, extremely damning articles on the topic. First, a mainstream Financial Times columnist casually noting the “systemic market rigging” of Central bankers. Second, two incredible charts documenting explosive global demand for physical silver – far above the level of actual mine output, in a world of nearly non-existent above-ground inventories. And third, two even more damning charts, regarding how incredible – and ultimately, unsustainable – it is that “prices” are created on the nearly “paper only” New York COMEX,” whilst the vast majority of physical uptake occurs halfway around the world, in Shanghai. And why not mention, while I’m at it – that as I write Tuesday morning, gold is on the verge of breaking above $1,150/oz; and silver, say it ain’t so, the $16/oz level last seen four months ago.
Back to Jeff Gundlach, I was considering starting yesterday’s article with this discussion, as I was so incredulous – but at the same time, unsurprised – that such a “famous” investor could act so clueless and uninformed on national television. However, it wasn’t until Zero Hedge published an article discussing “peak manipulation” that I was pushed over the edge – in describing what I have long noted in an increasingly chaotic world of “robo-headline” creation, Central bank “jawboning,” and blatant propaganda. Which described what few, if any, in the mainstream world would dare identify, despite such contradictions staring them right in the face. In this case, last Thursday’s “headline” that the “Bank of Japan is said to see little immediate need for adding stimulus” – followed by Monday morning’s headline that the “Bank of Japan may need to ease again, with Fed delay.” Wait, exactly what “delay” are they referring to? The FOMC two weeks ago holding off on “lift-off?” Friday’s weak jobs report? Bueller? In other words, they are simply feeding headlines to the newswires base on where stocks and the Yen are at any given moment, and where they “aim” them to be.
Of course, given said “brainwashing” of market participants – at least, the handful that still remain – it matters little what these headlines say, so long as stocks are rising. Frankly, if a headline claiming “Japan to re-animate Hirohito, re-bomb Pearl Harbor” crossed the tape,” no one would pay attention if the incessant algorithms tying a weakening Yen to a rising Dow did their thing. Or heck, “Japan just bombed Pearl Harbor,” for that matter.
Such lunacy, of course, is far from confined to Japan – as literally, the Federal Reserve, PPT, and company literally invented this game. Which is why, just a week after the uber-dovish September 17th FOMC meeting – at which Janet Yellen actually espoused the potential for “ZIRP to Infinity” – Zero Hedge facetiously wrote “stock futures surge on renewed hopes of a Fed rate hike,” after a “faltering” Yellen spoke in tongues of the Fed’s relentless “data dependence.” Followed by yesterday’s “global stocks surge on a bevy of bad economic news,” followed the PPT’s two-day stock goosing in the aftermath of Friday’s hideous NFP employment report, which may have put the Fed on “hold” forever. In other words, when the PPT is doing its thing, “bad news is good news” for stocks, as is “good news,” if any ever existed. And regarding the Cartel, “good news is always bad news” for gold and silver; whilst “bad news”…wait, scratch that. There hasn’t been a shred of “bad news” for Precious Metals in 15 years; nor will there be for the next 15, given the massive buying yet to come, and the lack of supply to handle it.
Of course, the beauty of reality – and it’s “Queen,” “Economic Mother Nature” – is that it ALWAYS WINS. And the longer it’s held off…the longer the proverbial beach ball is held underwater…the more explosive the “splash” when the ball surfaces…and the more wrathful Economic Mother Nature becomes. Already, she has exercised her revenge on global economic activity; commodities; currencies; and junk bonds in the financial world – particularly in the “emerging markets” that have been terminally poisoned by “leading” Central banks like the Fed. And social and geopolitical tension everywhere else, creating the potential for “unspeakable horrors” to break out any given day, of the “black swan” variety or otherwise. And thus, all that remains between the full expression of her wrath – i.e., the “unstoppable tsunami of reality” – and the fraudulent, painted world of “peak manipulation,” is the swamping of “last to go” markets like paper gold and silver, and said “Dow Jones Propaganda Average.”
However, starting with last week’s horror of a September NFP unemployment employment report, “bad news” will likely start exploding for the foreseeable future – such as today’s ugly trade deficit; an equally ugly start to the third quarter earnings season; and what’s this, another “debt ceiling” battle on the horizon, as the U.S. government – “extraordinary measures” and all – will officially run out of money early next month. In other words, “peak manipulation” – of stocks, bonds, and Precious Metals – appears likely to be “put to the test” in the coming months. And now that Central banks have “thrown the kitchen sink” at the world’s economic problems – which they largely created; but in doing so, making things far worse, it’s only a matter of time before the manipulators lose control entirely. And nowhere more so than physical Precious Metals – which care of 15 years of relentless suppression, have catalyzed record demand, collapsing inventories, and the bleakest production outlook in decades. Rarely in history is “insurance” so cheap; and rarely has it been so badly needed – so please, protect yourself NOW, whilst you still can!