NEW YORK ( TheStreet) -- As an unintended consequence of the Federal Reserve's evolving into the world's largest activist hedge fund, Ben Bernanke is being squeezed out of his bond purchasing program before the ideal time.
I listened to hedge fund legend Leon Cooperman's CNBC interview yesterday and agreed with 80% of what he said. He's spot on when he says the Fed has become data dependent with transparent targets at 6.5% unemployment, 3% GDP and 2%-3% inflation.
My disagreement can be summarized by this question: What happens if Bernanke is squeezed out of QE before those benchmarks are reached?
This particular iteration of QE cannot go on forever, the Fed cannot purchase $85 billion each month because the supply of treasuries and mortgage-backed securities is constrained, as David Tepper mentioned last month; the taper needs to happen in order to avoid a bond bubble caused by this artificial demand.EconomicTiming.com portfolio. Gold puts have been the most profitable of all. The really good news is that this market correction is setting up generational buy (if Jim Cramer can use that phrase to describe the earnings-starved Netflix (NFLX), then I think I can use the phrase to describe a company with better video streaming profits than Netflix) in Apple (AAPL). August and September have the potential of being the best two months of performance in Apple options history. Having the portfolio positioned in cash and opportunistic puts until the Fed dust settles will create an ideal entry scenario into Apple as we approach the July earnings report.
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