David Tepper was on CNBC this morning and stated the following (paraphrasing), "If the economy gets better, stocks will go up. It the economy gets worse, the Fed will institute QE II and stocks will go up." In other words, heads you win, tails you win! He believes that the Fed's announcement on Tuesday of this week clearly gives the signal to the markets that the Fed is about to embark on a second round of QE. So far so good, the markets roared ahead today with the S&P 500 up 2.12%. Wow! the equity markets, along with precious metals, definitely believe that QE II is upon us. Maybe with rates, such as the Fed Funds rate at zero, money really is free; and if it takes the Fed to put another $1.8 trillion into the banking system, so be it. The markets love it. Everyone is getting rich. And, who can be against free money.
For those of you whom do not know who David Tepper is, he is the founder and CEO of the hedge fund known as Appaloosa with $12.4 billion assets under management. Last year his fund made $7.5 billion or a return of 132%.
In keeping with our music assortment this week, I want you to sit back and enjoy your new found market gains as you listen to "Money for Nothing" by Dire Straits. It doesn't get any better than this! But make sure you spend some of that prosperity. The economy needs it.
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