Authored by Christoph Gisiger via TheMarket.ch,
Fred Hickey, editor of the investment newsletter «The High-Tech Strategist», warns that the stock market is still in a bubble. The veteran investor says why he avoids red hot technology stocks like Amazon and instead bets his money on gold mining companies.
Well that didn't take long. After the Feds actions late last week with Not QE4 continued injections via the repo markets. The Fed in anticipation of helping the markets start off well on Monday, the Fed has created the YES this is QE5 package. What has been released:
+/- 1000 point swings. Once day, we are back, next day we are sunk, rinse and repeat. Repo rates are over subscribed. Nearly $300B in the last few days issued. Why the liquidity problem. The Feds not QE4 will have pumped nearly $1T in 6 months. And still not stabilizing. Bonds heading to zero and catching up with friends in Japan & Europe when the US hits negative yields.
Banks don't have any cash or they do and just getting more from the fed. Either way, the overnight Repo was oversubscribed again with over $100B in additional money needed by banks. They are dumping treasuries and mortgage backed securities for collateral.