The recent positive move in the stock market indicates how significantly investors have insulated themselves from reality, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP. In support of this argument, BOVE cites some tragic developments:
- Russia bombed a children’s hospital
- Their publicity suggests that they are about to use biological weapons
- They clearly do not believe that the western democracies will react to any of this.
- Therefore they intend to use any weapon that they have up to and including a nuclear disaster at a Ukrainian electric plant to capture Ukraine.
"Investors [yesterday] assumed that none of this means anything," BOVE recently told investors. "The only message to take from this war is that the Fed will not meaningfully tighten monetary policy. In essence game on. Let’s go buy stocks."
BOVE asks is it possible that investors were wrong? "It is possible that Russia has now crossed every line that can be drawn," he continued. "It is possible that the west will now respond in force. It is possible that Russia has all of Europe on its knees including the United States." BOVE presents a brilliant personal example from real life to illustrate his case.
BOVE presents the "possibly not" scenario as well, in his note to investors. "The French President has now demanded an immediate cease fire," BOVE outlines. "He has now crossed a line from which he cannot step back. The situation is going to get far worse before it gets better. Investors need to at least start thinking about this."
This episode with DICK BOVE, MAT VAN ALYSTYNE, co-founder and managing partner at ODEON CAPITAL GROUP, and journalist, JOHN AIDAN BYRNE, will also take a deep dive into the market and a closer look at how the latest global upheaval influences the course of the US dollar as the world's dominant reserve currency.