Here we are just days after the latest attempt by our government to scuttle the financial markets and the averages are making new historical highs. Investors should expect more of the same as long as the Federal Reserve keeps pumping money into the financial system.

While the politicians, aided by the media machine, continue to construct one wall of worry after another, you my dear reader must stay above this daily to and fro. You must keep your eye on the ball. The ball in this case is the $85 billion per month that the Fed continues to push into the financial system.

“Taper,” a word that saw the stock markets swoon and interest rates soar is no longer on the front burner; at least not this year, thanks to the latest deficit/debt debacle out of Washington. Back in September, at the Fed’s FOMC meeting, Chairman Ben Bernanke had said that tapering was off the table for now due to a slowing economy (thanks to the Sequester) and possible fallout from the upcoming deficit/debt talks. The latest economic data indicates that this little charade out of D.C. will cost $25 billion and shave almost 0.08% off fourth quarter GDP growth. Once again the Fed got it right.

Many on Wall Street tend to want to outguess the Fed. That is a mistake. They are the most wired-in group of financiers in the world. When they talk, it is better to just listen because they are right more often than not. Therefore, when Ben tells me no taper, I have to stay bullish on the markets. This is not rocket science, folks.

You see, the Fed controls the stock and bond markets. It has been so ever since the financial crisis. Many investors continue to make the mistake of thinking the stock market and the economy are one and the same. In times past (pre-financial crisis) that may have been so. Since then however, the Fed has followed an unrelenting monetary policy of stimulus. Although it has been only marginally effective in growing the economy and employment, it has done wonders for the stock market.

It wasn’t supposed to work that way. It was supposed to be a team effort. The Fed has been hoping against hope that the U.S. government would follow their lead and use all the fiscal stimulus at their disposal to get the economy growing again. Instead, our politicians have done just the opposite. Since 2010, the government has done everything in their power to sabotage the economy. Today, with our political system in complete disarray, the Fed is the only game in town.

We now have over five years of historical experience of what happens to the stock markets when the Fed stimulates. Ask yourself, has anything changed? There is no need for second guessing here. When I told you that we would not get into a shooting war with Syria, did you listen? Over the past few weeks, when I advised you to ignore the Washington circus because it would end in an eleventh hour deal, did you take heart?

Oh ye of little faith, stop focusing on these mundane issues that have little or nothing to do with the performance of your portfolio. We are going to new highs in the markets; enough said.

 

The nation has breathed a sigh of relief now that congress has finally done what they were elected to do. The government is back in business and the debt ceiling has been raised. The damage to the country, however, will be long lasting. (more…)

 

For the second week in a row, the markets ended up at almost exactly the same place or higher then they started.  Despite the shutdown, the debt ceiling and the market sell-offs they have induced, the markets are telling us to ignore this drama. (more…)

 

While the government shuts down and the markets swoon over the debt ceiling drama and the future of the U.S. financial system, the United States Federal Reserve Bank issued a new version of the $100 bill this week. Demand for the new bill is quite brisk, thank you. (more…)

As the first week of the government shutdown comes to a close, the panic level is rising on Wall Street and throughout the nation. Do not get sucked into this emotional maelstrom. None of these dire predictions will come true. (more…)

As the shutdown progresses through its first week, the Federal government, the nation’s largest employer, is laying off between 800,000 and one million employees. In an economy that is already coping with a 7.3% unemployment rate, that’s bad news. (more…)

 

In the face of a government shutdown, computer glitches and a mountain of confusion, Obamacare made its inaugural debut this week, so far, so good. (more…)

Investors were convinced the Fed would start to taper this week. When they didn’t, the markets were caught flat-footed. Most cried foul, I disagree. (more…)

 

Whether you call them unmanned aerial vehicles, remotely piloted aircraft or simply drones, these remote-controlled devices are expected to become a big business both here and abroad over the next decade. The question is whether this new technology will impact our lives in ways we are willing to accept. (more…)

 

Stocks rallied this week as news that the world may have found a way to resolve the looming confrontation between the U.S. and Syria. If so, investors can thank Russia for the solution and a much-needed deal that might actually extend into a brokered peace. (more…)