Perilous Market Speculation and Correspondence

Perilous Market Speculation and Correspondence

Reading Time: 5 minutes

We are entering a time of novel uncertainty. If the economy survives, the below stock and ETF picks may provide gains approaching Amazon in the period of 1998-2018. Some of these will surely be failures, of course. The first section are long-term picks that I believe could be most valuable over a period of 5-20 years. The second section are riskier bets with shorter term speculation, though still relatively long. I have bolded the ones that I really like.

Longer-term investments for an uncertain climate

  • $TEAM
  • $BAM
  • $APPN
  • $BRK-B
  • $FRFHF
  • $L
  • $MKL
  • $BPYU
  • $HHC
  • $RDFN
  • $WD
  • $SCHW
  • $DFS
  • $MELI
  • $WAL
  • $BIP

Shorter-term, higher risk/reward picks

  • $AMD (1-3 yr)
  • $ZNGA (2-5 yr)
  • $TDOC (uncertain, 0-3 yr)
  • $XOM (LT)
  • $BP (LT)
  • $INO (risky, 0-2 yr)
  • $SIVB (5-10 yr)
  • $SHOP (5-10 yr)
  • $ZM (uncertain)
  • $EADSY (5-10 yr)
  • $STT (3-4 yr)
  • $GH (0-5 yr)
  • $ATVI (3-5 yr)
  • $SQ (3-10 yr)
  • $TTD (5-10 yr)
  • $INTU (5-10 yr)
  • $WORK (not sure that I like this one, but others do)

With the above said, I’ve never seen fundamentals and actions this poor, and I hope that I never do again. Below is correspondence between myself and a friend. You can see his email and links by expanding the box below. The links are very valuable.

From a Friend

Thought you guys would be interested in all of this. I don’t think there is much anyone can do about it and it is a little disheartening, but hopefully it gets exposed in greater detail sooner than later.

So I have been doing some research and found that what I thought was illegal actions by the federal government was actually included in the language of H.R. 748 (CARES Act) Section 4003. Summed up here is what the FED is able to do:

Baker McKenzie: CARES Act 2020: Federal Reserve Measures in Response to COVID-19

So basically the FED is used to control interest rates and the value of the USD. They can digitally print money by purchasing treasuries and then giving them to banks to use as collateral for loans. They can also buy back those treasuries and destroy them to destroy money. The purpose for this is so that money is available for loans and growth and that inflation is kept in check in order for a fiat economy to work.

The FED is limited by law to only being able to buy System Open Market Account holdings, which are treasury issuances. A lot of this you have been hearing about as the overnight REPO market loans which are treasury issuances and repurchase agreements to banks.

The FED has been using Quantitative Easing by buying Treasuries (printing money) issuing them to banks and causing artificially low interest rates and bidding up securities. The banks are able to leverage the money loaned to them in treasuries 10 to 100 times over to hand out cheap corporate debt.

By using Quantitative Easing in a time when it should not have been used for the last 12 years continuously they have created a corporate debt bubble. The Corporate Debt bubble is essentially a mass acquisition of low quality corporate debt. Corporations have been using this money to operate and with no end in sight there was no reason that they ever needed to even be profitable.

Investment institutions like BlackRock have packaged this corporate debt into securities. Much like the mortgage crisis of 2008. These securities are being sold as exchange traded funds like JNK, which is BlackRock’s Junk bonds. They do this so it has the appearance of being a liquid asset. Donald Trump has a significant interest in his portfolio in these particular ETF’s. Exact numbers for right now aren’t known, but it has been between $25-$100 million he has invested with BlackRock, which would be a majority of his liquid investments.

Under the CARES Act congress has authorized the FED over $460 billion dollars. The FED is able to use that $460 billion as a backstop and has really created at least $4.6 trillion dollars. The CARES Act also created a Special Purpose Vehicle, which is BlackRock that can purchase investments on behalf of the treasury. So in essence the FED can buy from the Treasury outside of the traditional System Open Market Account holdings which are treasuries. They are using this loophole to have BlackRock purchase all the bad corporate debt back. Here is another good article to check out.

The Fed Has Chosen an Extremely Dangerous Company to Manage the Bailout

So now you have only the executive branch that is in charge of distributing over $4.6 trillion dollars as they see fit. If you weren’t aware the executive branch overseas the treasury and Trump personally appointed Jerome Powell of the FED. On top of Donald Trump having this much control over where and how the money is distributed he was even able to get rid of any independent oversight!!!!

Problematic Coronavirus Non-Oversight

I feel like our economy is too difficult for most people to understand how it works at this point. I also feel like when something is this difficult to understand and there is no way to describe how something works at an elementary level it probably does not work.

I don’t think anyone knows how this will all play out, but the underlying issues that were there before the coronavirus are still there and just being expounded. There is going to be even more corporate debt that will just end up being bought back by the FED and Treasury and will probably never be repaid. We probably won’t see it effect anything until it comes out years later and we either have massive inflation where the dollar is no longer the basis for global currency, which it is already being phased out.

All I know is right now the executive branch is using the CARES Act to pump up the funds that they and their associates were heavily invested in by using the FED and cashing out without taking the losses they should have endured.

It’s essentially a large scale pump and dump scheme where they are printing money to buy distressed assets so they can sell them above market value. I feel like this is possibly still an SEC violation and it is possible to submit a tip to:

Maybe there is still hope by letting congress know that there is no oversight with this spending and voicing your concern of the quality of assets the federal government is purchasing.

Hope you are enjoying your downtime and making the best of isolation!


Dr. John Hussman, who has predicted and navigated the prior collapses, has been shocked and livid about the events, and has sent a letter to Congress. I think that these are truly perilous times for us and our wallets. Hussman has more information at his website, Hussman Funds. He has also made available partial information in some Tweets.

These are perilous waters. I wish you and yours well, and I hope that you are prepared for whatever circumstances come into being. Stay healthy, be relentless in pushing forward, and know that we are an adaptable people who can survive. Hopefully we learn from our mistakes, and hold people accountable for their actions. For now, I leave you with something very funny—it’s worth watching until the very end.

Share your comments, critiques, or criticisms here. [Please note that I alter most the hate comments to make them funnier for the other readers.]