WASHINGTON – Well, here we are: Friday, August 27, 2021, and what do we have? An erratic, dazed and confused, back and forth US stock market that hardly knows where we’re going next. We don’t. The Federal government, now run by our all-wise Ruling Class, and US stocks wander lonely as a cloud under the largely fictional “Biden Administration.”
Dazed and confused: The Biden Administration / Federal Reserve mirage
Take the growing jam-pile of debacles currently known as the “Biden Administration,” including the self-induced, ongoing cluster**** variously termed the “Afghanistan withdrawal plan.” Add Friday morning’s virtual but still reliably vague, Federal Reserve pronouncements emanating from its virtual annual Jackson Hole confab. ZeroHedge elaborates.
“When the Fed announced that its Jackson Hole, Wyoming summit is going virtual due to COVID concerns, it threw an interesting wrench into things. Indeed, only one thing is clear: if the Fed is fearful enough of COVID to make its annual junket a virtual event, then how could they possibly justify starting a tapering process when the act of tapering could tank the MELA (Market, Economy, Life Decisions, Algos) system?
“Consider that, prior to the Fed’s announcement, the bearish case for stocks was developing, as the central bank’s most recent FOMC meeting minutes indicated that the committee was eager to begin the QE tapering process. Immediately, the market sold off. But, now it’s hard to know what’s next given the fact that the Fed is so freaked out about COVID that it cancelled its annual camping trip to Wyoming.”
Powell issued a vague hint that the Fed could ease up on its inflationary throttle, maybe later this year. Or early next year. Maybe. And he issued these cautionary hints in the usual dialect of Newspeak that we’ve long dubbed Washingtonspeak. Ho-hum. US stocks, tepid early Friday, began to pick up. Who knows where they’ll close.
So take all the above, and what do you get? (Aside from being dazed and confused?)
Zero idea where the country, the economy, US stocks and the nation are actually headed for the next few months or so. Like, nowhere, man).
(Provided to YouTube by Universal Music Group.)
The Washington Triumvirate, the Pelosi Maoists, and an all-new establishment CPUSA
Now more than ever, the nation clearly lacks an actual president. Currently, the Rice / Klain/ Jill Biden Triumverate will apparently suffice. But they only serve to provide cover for Party Chair Nancy Pelosi’s Legislative Long March toward some kind of Maoist Cultural (and Financial) Revolution.
We actually hate to flog partisan politics here in what’s supposed to be a stock market column. But what can you do these days? With America’s New Communist Party, once known as the Democrats, firmly in control of an already intelligence community- / ruling class-dominated Federal government, the remaining best lack all conviction and the center cannot hold. (With apologies to Mr Yeats.)
No one has any idea what’s coming next except more masks, more Greek-lettered Covid-19 variants, more product shortages, more outrageously spiking prices, and more CRT indoctrination in a public school system that could give a rat’s derrière about kids or their hopelessly stupid parents.
US stocks continue to wander Friday under a hapless (and possibly fake) Biden Administration
All this, and much, much more can hardly boost confidence among the average American investor. Or, for that matter, even to those algorithmically driven institutional high-speed trading thieves and miscreants. The ones that actually move the markets. Add to all a more-than-usually chaotic August investment solstice, and what to you have? Answer: a US stock market that’s so dazed and confused and so transfixed on kabuki theater Washington politics that it’s hard for investors to know which stocks, if any, to put their chips on. We sure don’t, at least much of the time.
But we still have some favorite US stocks. Like Cleveland-Cliffs. WARNING: Travel at your own risk
Our current favorite, largely unloved Cleveland-Cliffs (NYSE:CLF), bobs and weaves. The shares spiked (again) a couple of days ago as the meme buyers piled in. Subsequently, as always, they got gang tackled again by the usual gang of short-sellers desperate to reverse the effects of the latest meme buyer-induced short squeeze. (Which has kept CLF shares effectively buoyed by a roughly persistent 10% short position.)
But once CLF goes down $2-3 per share, the meme buyers just hoist their Jolly Roger once again and wipe out the shorts. Again. Rinse, repeat. Meanwhile, few if any players on either side have any idea how powerful an industrial force this long-neglected company has become, almost totally without notice from analysts.
We hold on, chomping on a few generic Tums tablets on the massacre days while enjoying the subsequent short squeeze fun with a dram of single malt scotch on the side. Hey, it beats wearing a facemask outside on our now routine 90+ degree + 200% humidity days here in our hidden bunker not far outside Washington’s Dismal Swamp.
Defense and oil patch picks
Our General Dynamics pick (NYSE:GD) seems range-bound, bumping back and forth in the $195-200 per share bracket. When our Pretend President launches our next fruitless war (because ISIS), this defense-oriented company should do well. Plus, we’ll have to replace a lot of military hardware as well, hitting the taxpayers up to reproduce the armaments we passively gifted to our New Best Friends, the Taliban. Via the Biden Administration.
In addition to the above, we’re also tiptoeing into new positions, namely tractor and heavy equipment Dow giant Deere (NYSE:DE) and phenomenally successful (thus far) fossil fuel company EOG (NYSE:EOG). We sold our earlier position in EOG about 3 weeks or so ago for a nearly 100% profit.
After that sale, the stock’s price dropped into the $65-70 per share price range, so we’re getting back in again. Although, in all honesty, we don’t believe we’ll be able to duplicate that previous profit percentage again this time around. But profitability from this point is still in the wind, given that Federal courts recently squashed Biden’s “executive order” termination of fossil fuel leases that the Trump administration had earlier granted. “Drill, baby, drill.” (You probably won’t see or read about this, though, in our State Controlled media.)
A Canadian gold mine of interest
We’ve also been playing with a few hundred shares (give or take) of Canada’s Kinross Gold Corp (NYSE:KGC). Canadian resource stocks are always a volatile play. But KGC actually makes money and pays a decent 2%+ dividend. The shares were whacked in June due to a big fire in one of the company’s major mines. They almost immediately began remediation and repairs.
Granted, it generally takes many months to get such facilities back into safety compliance and back into production. But gold prices seem to be stabilizing and profitably high levels, despite real or alleged competition from Bitcoin miners and their friends. So it’s possible KGC can move from its current price range of roughly US$5.50-6.00 per share back up to US$8.00 per share, maybe by spring.
Since average retail investors (like us) can buy lots of shares of a cheap stock like this one, we continue to load up whenever shares get under that $6.00 price point. Soon, all we’ll need is that $8.00 per share Nirvana to make us happy and profitable on this one.
On the other hand, our investment experience remains roughly 50-50 when it comes to the volatile gold patch. Both miners and the price of gold bullion can jump violently at the drop of a proverbial hat. So playing this game can feel a lot like feeding a mountain of quarters into a Vegas slot machine. Where the house always seems to hold the advantage. Caveat emptor, etc. But winning a crapshoot like this one can still be fun. If you win.
Rounding Third and Heading Home…
That’s it for now for us and for US stocks. We’ll try to ignore the “news” this weekend, just like everyone else should. In the process, that will help us ignore the latest pronouncements of Dr Fauci and His Fraudulence, the Grand Dazed and Confused.
All offered by them without evidence.
Have a good one.
Headline image sources: Courtesy of Legal Insurrection and Comically Incorrect.
