Bill Fleckenstein of Fleckenstein Capital appeared on CNBC’s Futures Now program on Tuesday.
It was kind of a strange segment.
Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he has misunderstood monetary policy.
Sounding taken aback, Fleckenstein answered saying, “I don’t misunderstand monetary policy. I closed my short fund in 2009 because I knew the Fed would print money.”
“If you want to pursue idiots like the Fed, and their crazy policies, and you think you can get out in time, go for it,” Fleckenstein said.
Fleckenstein said he “never dreamed” the Fed would print as much money as it has, and probably nobody — including Ben Bernanke — thought the Fed would, either.
“I knew [the Fed] would print money,” Fleckenstein said. “I knew it would be hard to be short [in 2009]. I never expected they would end up printing $US3 trillion and that the markets would triple as a consequence, but I knew better than to fight them. That doesn’t mean that this will end well.”
DeAngelis later said: “The problem I have with what you’re saying and what others have been recommending, is that if people had listened to you guys over the last few months, they have really missed out on a big piece of the market gain.”
Fleckenstein, sounding almost exasperated responded with, “So what?! So in the last two months the markets have gone up by a rounding error, so what?”
DeAngelis followed with, “I don’t say ‘so what’ to taking money off the table,” to which Fleckenstein said, “That’s fine, you’re not managing money.”
The whole thing is a little weird, and the last minute or so is mostly Fleckenstein and another guest yelling over each other.
Overall, Fleckenstein’s assertion that the Fed’s money printing policies won’t end well for the markets echoes statements he made back in August.
Last month, Fleckenstein told King World News, “Bonds are a joke, yes, and stocks are a joke, and which one is going to crack first and which one is going to lead to more trouble, I can’t tell you, other than both are going to be big problems somewhere down the road.”
And over the last couple years, Fleckenstein has been consistently critical of the Fed’s easy money policies. As a money manager, however, he didn’t “fight the Fed,” as the saying goes, until last year when he re-opened his short hedge fund after closing it down to go exclusively long in 2009.
But looking at the investing landscape more broadly, it’s an interesting time for investors or strategists many consider “permabears.”
And listening to Fleckenstein talk, you can almost hear the frustration in his voice. The belief that the monetary experiment currently being undertaken by the world’s largest central banks will end in ruin has become a more marginalized, if not downright lonely, position in the face of bond and stock markets that have rallied.
And while a media outfit like CNBC is trying to create compelling segments for viewers, the most honest assessment of Fleckenstein’s appearance Tuesday is that it seemed like he was getting trolled.
On Twitter, one our favourites Jesse Livermore at Philosophical Economics noted the segment and said:
Earlier this week we highlighted comments from Laszlo Birinyi made earlier this summer, who said the current bull market is in the exuberance phase, but that there was still a blow-off top to come. Birinyi said that in addition to things like the local barista asking for your stock picks, the real blow-off top in bull markets come when the stock market is front page news, and the media portrays a market that can’t go down, or that only a real loon would believe can go lower.
And while no one thing ever really calls a market top or a bottom, it certainly seems like there’s been clear that there has been a shift in sentiment, and it is certainly worth nothing when bears start becoming bulls, and how lonely the remaining bears are.
Watch the whole video from CNBC below, and you can read CNBC’s write-up of Fleckenstein’s interview here.