Janet Louise Yellen—JLY—is the chairman of the United States Federal Reserve (the Fed) and, perhaps, the most powerful and influential person on planet Earth. She does not command a single soldier. No one prays to her image. Parents are not even inclined to name their children after her. Yet, when she speaks, otherwise serious, highly educated and well-connected people hang on each word. After Yellen has finished, videos are played again and again for some clue in body language of what she might have tried to conceal in her words.
We are told, at least weekly, that stock prices from Manila to Brazil are moving one way or another because of something JLY said or did not say. Even something the good woman may have talked about last month that shows up in the official transcript—minutes—of a meeting is big news.
Jesus Christ had to raise people from the dead and walk on water in front of his 12 Apostles to change the world. Janet Yellen and her 12 “apostles” (yes, there are 12 members) on the Federal Open Market Committee only have to talk about what they think they might do months in the future. Maybe it is all because of the Internet.
“JAP,” on the other hand, is one of many medium to large players on the Philippine Stock Exchange (PSE). More active at some times than others, JAP has been around for a long time and is representative of other like-minded individuals with colorful names and initials. These are the men and women who put real money on the stock-market table for the purpose of making real profits. Unlike JLY, JAP does not just talk about the future. JAP invests for the future.
The other day the PSE index was down, and the experts told us this was because investors were keeping a close tab on signs from the US Fed on whether it would soon raise rates. First, as I have been correctly saying for almost two years now, there is not going to be any interest-rate increase any time soon. If you lose money on that analysis, you can have my firstborn son.
Second, the person who said investors were “keeping that close tab” is probably the only “expert”—outside of a few high-level bank traders—who would know or care how to quickly access the Fed information anyway.
Perhaps, a better analysis of the fact the PSE was down 46 points would have been “JAP and the heavy hitters took some morning profits and stayed on the sidelines during the afternoon session while they watch the Senate hearings.” The truth is—and you know this is if you actually follow and trade the PSE—investors are keeping tabs on what “Jap” is doing on a daily basis, not on “JLY.”
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
1 comment
You always entertain me Mr. Mangun.