Happy Sunday.

I took the day off my blog to be humiliated by golf at The European Club outside Dublin, Ireland.

It was a glorious day of sun, no rain and 40 mph winds (some pictures here).

I have lived in the Southwest too long. I am a fair weather golfer. But, I did manage to scrape myself around the course (called the toughest in Ireland) with a 90 and my partner Greg and I won our team best ball. I sunk a 20 footer on 18 to close out the match.

I carried my own bag around the course and this morning I am more sore and tired than after climbing Stelvio.

Today we are off to Portmarnok and more importantly, we have caddies.

Onwards to some some thoughts on the markets…

It is hard to even look at the markets these days other than closing prices.

I have been harping on ‘valuation compression’ for at least a year on this blog and so I should not be surprised at the prices. What surprises me is how poorly positioned it seems The Fed, ‘professionals’ and most investors seem to be…including me.

I like the way Josh Brown sums up the actions of The Federal Reserve in this take down. The gist:

At a certain point, a person who is charge of price stability should probably look in the mirror and say “For whatever reason, I am not good at this. Or whatever method I am using to make decisions is not going well or producing positive outcomes.”

I don’t think this is so much to ask of the people we put in charge of our institutions.

The Federal Reserve’s Open Market Committee for example. If in any given year you find yourself oscillating furiously back and forth between stimulus and austerity, perhaps it’s time to stop and reevaluate. It might be the data you’re using or the way in which you’re using it. It might be your instincts. It might be a combination of things. The pendulum should swing, just not all the way in both directions all the time. That’s not a cycle, that’s a circus.

If your forecasting abilities led you to the conclusion that you would not have to do any rate hikes in 2022, followed a few months later by having to do the sharpest rise in interest rates of all time, maybe you’re not good at this. If you’re buying mortgage and treasury bonds to stimulate the economy in the month of March and then deliberately trying to crash the markets and create a recession in September, you’re probably not the right person to have in charge of the money supply. You may not be the “price stability guy.”

No matter how I want to assign blame, it is my job to manage risk and assume The Fed knows nothing and the markets are rigged.

About a year ago I went to 60-70 percent cash in my stock market accounts. It is ok to panic if you panic first.

I have no idea how low we go, but my job as an investor is to stay in the game and protect capital.

The damage caused and still to come from the unintended consequences of the rate of change in interest rates, the US Dollar, political blame game and the war as winter comes to Europe is likely horrifying and impossible to game.

The Washington Post spent months writing this weekend piece titled ‘Is Crypto A House of Cards – A Look Behind The Scenes Of An Unstable Industry‘. You can taste the smugness in the title and tagline.

This article could easily been titled ‘Is The FED A House of Cards – A Look Behind The Scenes of a Politicized and Unstable Agency‘.

While we bicker about the ‘bubble’ in crypto and stocks, the ‘superbubble’ that popped was interest rates. It comes at a time when Microsoft, Apple and Amazon have too much corporate power. I said this last week…

I wrote a few months back that the markets looked crashy and we rallied.

It looks extra crashy this weekend so I hope by writing this…we rally.

I have no idea if we rally this week, this month or year, but eventually a new bull market will take hold.

What we need for a new bull market though is growth.

What we need before growth is some stability in policy and leadership. That stability bet seems like a long shot right now which is why I worry about a crash.

Very soon, I expect company after company to start blaming The FED, the dollar and the war to force some policy change and stability.

People will start freaking out pretty soon.