Fear and disgust. This is how, in December of 1968, the Kansas City Star described the range of views held by the administration of the University of Missouri at Kansas City about campus-radical (student body president), Allan Katz. In the turbulent late sixties Katz was a constant irritant at UMKC. Years later he would be appointed United States Ambassador to the Republic of Portugal. Ironically, in 2008, Ambassador Katz was invited to give the commencement address and is now a Distinguished Professor of Public Affair and Political Science at that institution.
I use this title as it describes two key issues dealt with in kortsessions: “Fear” and fear mongering is what the media does best and “Disgust”, my normal reaction. The legend of Allan Katz is there to highlight the ever-present irony in media pronouncements about the market.
Kortsessions on the QT
I’ve not posted in the past couple of weeks because of travel. More importantly, there has not been that much to talk about. The market has been pretty decent, especially the Russell 2000 (posting a new all-time high). Ergo, it is not surprising to me that we would have some corrective action. Friday, April 17, we got just that (Dow -1.65%, Russell 2000 -1.54%, S&P 500 -1.13% and Nasdaq -1.52%). Other than the fact that we were due for a pull-back and Fridays can be days when those pull-backs are magnified by traders squaring positions for the weekend, there was nothing extraordinary in the news backdrop.
Or, was there?
Instant media analysis would disagree.
Ironically, China instituting positive measures to dampen speculation in their red-hot market was cited as something to be worried about. In the last two months the Shanghai composite Index has soared 38%. In light of this, the Chinese government decided to raise margin requirements and allow Chinese institutional investors permission to loan their securities to facilitate short-selling. These are exactly the type of measures monetary authorities should take to dampen speculation … the type of measures our Fed should have taken (but did not) to dampen the speculation during the run-up to the tech bubble. It is good policy! Yet, all day yesterday this move was cited on CNBC as a negative for our market. However, no one pointed it out as a good example of what should be done.
“Play it again Sam.”
Greek exit (Grexit) from the Eurozone was front and center again, continuing to be cited as a negative. Ironically, chatter is beginning to surface that if Greece pulls out, it would be a blessing … the end of a minuscule economy, acting as a distraction, drawing attention from what is a recovering Europe. This video link from CNBC’s “Closing Bell”, not only demonstrates the negativity of opinion that exists on the market, but also, via guest commentator, Evan Newmark, a more balanced look at the potential “Grexit.”
Irony of Ironies
The Media continues to flog the potential, upcoming “lift-off” in interest rates as a cause for concern. It is not! It will be a tiny up-tick and it will be a sign of a much improved U.S. economy!
Doesn’t this “disgust” you?
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missed ya.