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FOMC...Party On!
Research for Online Investors

by John Dalt

4/27/11

The Federal Open Market Committee (FOMC) concluded their meeting today in Washington.  Their statement reaffirmed the commitment to QE2 and holding interest rates at low rates for an extended period.  GLD hit a new high, silver popped off the consolidation it was building after the sell off yesterday.

Treasury Secretary Geithner told an audience in New York, at the Council on Foreign Relations, yesterday, “Our policy has been and will always be, as long as at least I’m in this job, that a strong dollar is in our interest as a country.  We will never embrace a strategy of trying to weaken our currency to try to gain economic advantage.”  You can read Bloomberg’s coverage of his remarks.  We wonder if he had both hands behind his back with his fingers crossed.

The business networks had a ‘countdown clock’ to the start of the Bernanke’s press conference.  The Federal Reserve Chairman gave a statement followed by a question and answer session.  The market stayed relatively flat during his press conference.  I was amused at his comments about the importance of a ‘strong dollar.’  Answering this question is like a beauty contestant wishing for ‘world peace’ during the interview segment.

Bernanke Press Conference

Based on his answers, and the cute little quiver in his voice, we wondered how he would look in an evening gown.

Bernanke said the Federal Reserve would continue re-investing maturing debt in treasuries.  The Fed has mortgage backed securities and treasuries maturing every month from past purchases.  The Chairman said the Fed was in no hurry to start shrinking its balance sheet.  The first move to shrinking the balance sheet would be to stop re-investing maturing bond principal.

The precious metals market took off on these comments, with gold and silver setting new highs.  You can read the Reuter's article on the Federal Reserve statement and Ben Bernanke’s press conference.

The market is in full bull mode.  All three indexes close at new highs yesterday, breaking resistance from 2008.  The market looks likely to push to the next resistance level of 1388 on the S&P 500.  This was the high the last week of February 2008.

MarketToday will be shorter for the remainder of the week, as I am leaving for Omaha to attend the Berkshire Hathaway shareholder meeting.  I will monitor the markets and maintain our premium service commitments, but it may not be possible to dedicate enough time to MarketToday.

Let me know if you are going to be in Omaha.  I look forward to meeting our subscribers.  Our 40 foot RV will be my headquarters in the parking lot at Qwest Center.

The mailbag:
Alaska, Gulf drilling permits, Canada pipeline--are baffling. They suggest you believe the high price of oil is due to an oil supply shortage.—subscriber J.R.

John’s reply:  The speculation is on the perceived risk of supply disruption.  This would be negated if we did not depend on imports for a majority of our transportation fuel.  J.R- I like you, and respect your opinions..but you are simply wrong on not trusting the market.  This is the slippery slope that allows 'world improvers' to take over markets and regulate our lives.  First oil (critical commodity) then soybeans, wheat and corn (food), then steel or anything else.  Let the speculators lose, or make, money, this is capitalism, it is good.

Believe me, most of them lose money.  It is just like Vegas, you only hear about the uncommon winners.  Read about our Buy, Sell, Hold service.  We sell the calls to speculators.  It is better than a casino.  Every once in a while one makes money, and perpetuates the myth of making money in options.  Obama does not understand capitalism, you should.  We make a mistake when we try to protect people from their own mistakes.

This is typical limousine liberal mentality that thinks they know what is best for everybody, and want to order other's lives "so they will be happy."  I don't want anyone ordering my life; I don't want to order anyone's life.  Let them succeed or fail on their own, let them live in shacks and be happy because they own it and it is theirs.  Let them enjoy their success and spend it on wild vacations, I do not care...just don't ask me for help if you fail.

Do not be lulled into a sense of security because the government regulates or licenses anyone or anything.  If they were good at it, we would not have had the credit crisis.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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