Well, Mr. Mnuchin announced last weekend that he was calling the big banks last week to ask for their help in restoring confidence in the markets. Monday was terrible because everyone was on vacation. But, Shazam! The day after Christmas, we saw the biggest one day point gain in history!
Can you say “Plunge Protection Team”? The PPT is an old urban legend in finance that there is a secret group of financiers that, upon request, will step into the financial markets and act to stop a crash.
However, we see that this “secret” group really does exist! The day after markets officially enter bear market territory, they go up 5% in one day! I’m sure many breathed a sigh of relief.
There’s only one problem, though. If the selling continues, how many times will this group (if it exists) continue to step in and prop up the markets? Hmmm.
No actions are necessary in our portfolios. Gold and the gold miners continue their uptrend. We continue to hold a lot of cash.
Cheers, and Happy New Year!