Blog Posts by Matt Nesto

Expectations are for courteous questions and familiar answers when Federal Reserve chairman Ben Bernanke sits before the Joint Economic Committee in Congress today. After all, it's not as if the two-term Fed chief doesn't have his story down by now. What that means is that he should be able to reiterate his outlook of cautious confidence and reassure the world that things are improving and that the Fed will be able to extract itself from its easy money stance when the time is right to do so.

Related: QE Tapering Won't Start Until Q4 Says Chandler

But for Fed watcher Chris Whalen, a managing director at Carrington Investment Services, the world would be well served if Bernanke came clean on the short-comings of his global inflation strategy.

"The big lie among all the central bankers is that they can do something to help grow jobs and get the economy back to where it was," Whalen says in the attached video. "Despite everything they've done for the past five years, the pool of credit is shrinking," he says, and in many markets, is actually deflating.

To be fair, Whalen says it's not just Bernanke who is blowing new asset bubbles, he thinks it's a global condition. And nowhere is it more conspicuous than in Japan where he likens the country's new inflation-creation policy by way of a weaker Yen to a ''deliberate act of economic war."

He's been called the golden boy, the best banker in America, the person singly responsible for JP Morgan's (JPM) success, and someone too important to be messed with. But if you ask Chris Whalen if Jamie Dimon, or any bank CEO, should hold both the chairman and CEO titles he'll tell you straight up that it's a terrible mistake.

"The division of jobs is not about efficiency or stock performance. It's about accountability," says Whalen, the managing director at Carrington Investment Services. "There's really no protection for the small shareholder, so you need accountability. You need to have the operator running the business and the board essentially oversees their activities."

While many have argued that the 60% surge in shares of JP Morgan over the past year outweighs the black eye the bank and its leader suffered as a result of $6 billion so-called London Whale trading losses, Whalen is unmoved by that argument.

"Everybody keeps going, 'oh the stock is up, Chris.' It's at book value, guys, and it's probably fairly valued," he says, characterizing Dimon's performance as a having done "a good job but not tremendous."

And even if this vote had passed and the investors decided they wanted to split the two roles, Whalen points out, "the board has no duty to follow the wishes of shareholders" since it is a non-binding referendum. Even so, he predicts there will be change at JP Morgan.

An ounce of gold, often represented by a single American Eagle coin, is a fairly easy thing to visualize. Even a 400 ounce gold bar, like the ones held at Fort Knox, is a fairly fathomable concept. But when you try to get your head around just how much of the metal an ETF like the SPRD Gold Shares (GLD) owns, it can get a little daunting. And the same is true when you try to track how much they've had to sell as the price of gold slips to a 2-1/2 year low.

"300 tons," says Tom Lydon, the editor of ETF Trends, in the attached video, calling the disposal of over 600,000 pounds of gold so far this year "amazing" and "incredible."

This, of course, as the largest metal-tracking fund has gone from briefly being the biggest ETF, to being a top-5 player after being cut in half to approximately $46 billion in value today, holding just over 1,000 tons of gold in its vaults.

While gold is clearly out of favor forcing the hand of holders to sell into weakness, Lydon says it won't always be that way.

"Central banks maybe aren't as concerned," he lists as one reason why gold is down. "I think the average investor, with stocks and bonds doing so well, I think they say, 'hey, I don't need to hedge, so that gold position I had, I'm going to put that into stocks for now.'"

There's a flippant retort used in investment circles in which mistaken fund managers proclaim: "I wasn't wrong, I was just early." It's used to vindicate a miscalculation as being the result of bad timing rather than bad judgment. Despite its rather corny and cliched premise, it is used more often than you would think.

In fact, Don Hays, the founder of Hays Advisory Group, points out that the excuse is being widely used right now by red-faced investors who are reacting too early to fears about the Federal Reserve tapering its bond buying program.

"After being in this business 42 years, how many times have I heard that?" Hays asks in the attached video of current concerns about teh Fed unwinding its $85 billion monthly quantitative easing program. "We have a long way to go before you have to worry about that."

In a recent not to client, Hays argues it will take years for the current monetary policy environment to deteriorate from near perfect conditions today to a point where it could threaten the bull market. And even when the Fed inevitably does begin to taper, Hays says it won't be as if the accommodative spigot just gets turned off completely.

There are simply no safe havens anymore and investors know it. In three short weeks, the 10-year Treasury yield has gone from 1.6% to 2.0% and in doing so, has gouged four percent off of the price of these ''super safe'' assets in the blink of an eye. Gold (GLD) has had an even worse month than bonds, shedding over seven percent just this month alone.

At the same time, stocks continue to be the only wining hand in town. Even though the ride has been delightful, owning equities is still nerve wracking.

"Everyone is looking for non-correlated ways to offset risk in portfolios, to offset all the ups and downs," says Tom Lydon, editor of ETF Trends in the attached video. "As long as everyone is long, you have that risk," he adds, crystallizing the What-do-I-do? dilemma investors are grappling with lately.

Not long ago, the answer to this problem fell almost exclusively into the laps hedge funds, but Lydon says things have changed in the past few years, and now, more than ever, individuals have the ability to do themselves what they used to have to outsource to the professionals.

"What's happened is, the average investor just isn't up for the risk anymore," Lydon says, highlighting one of the key reasons why so-called alternative ETFs are experiencing massive growth, including MLPs, REITs, Commodities, Alternative Energy and leveraged funds.

"Why would anybody buy gold except for fear?" asks Don Hays, the founder and chief investment strategist at Hays Advisory Group. And truth be told, it's a question lots of investors are asking lately, as the price of the most widely held precious metal has shed nearly 25% in seven months, and by Hays's calculations, could shed a comparable amount again as it shrinks back down to $1100 an ounce.

"If you look back, when the price of gold started moving up, it's almost perfectly synonymous with September 11, 2001. That's when the fear really started rising," Hays says in the attached video.

Interestingly, he finds gold to be more useful as a "fear index" than an outright investment, and explains that it's expected weakness bodes well for his core equity investments, and even the world.

"The terrorism effect obviously is starting to improve, democracy is starting to improve, the price of oil is coming down, so all of those things play into a much better (investment) environment for the next 10 to 15 years. That is what gold is telling us," he says.

To be sure, gold's 12-year run to record levels coincided with lots of what Hays refers to as "massive distortions and worries," including the financial crisis, a technology revolution and, of course, an unprecedented rise in global terrorism.

Three days ago, when Dell (Dell) announced that it was going to release it first quarter earnings results five days earlier than originally planned, the street took it as a warning sign that bad news was sure to follow.

Even before the change, it wasn't as if analysts were expecting great things from the humbled and hurting computer-maker, but the haste shown in trying to get the latest report out has not only served to take low expectations even lower, but has stoked a fresh round of speculation over founder Michael Dell's effort to privatize the company.

As my co-host Jeff Macke and I discuss in the attached video, Dell's existence is hardly dependent upon whether it meets or beats analysts expectations or offers bullish guidance about the future. No, Dell's results are all about valuation, and the worse they look, they more likely it will be that any and all shareholders will see that the current cash bid (of $13.65 per share from Michael Dell and Silver Lake Partners) might not be as much of a steal as certain shareholders have inferred.

"They've shopped the company and there's been a lot of umbrage, a lot of outrage, a lot of 'Michael Dell is trying to steal the company'," Macke says, pointing out that there's a ''scoreboard" that keeps track of these things everyday called the share price. "And it turns out Dell is worth about $13.65," he says.

It's frequently stated in this business that "mom & pop," or small investors, always get it wrong. They buy too late after stocks have risen, and then sell too early after a decline and end up missing the rebound. This trend is so predictably incorrect that some shops simply do the opposite and chalk up their gains to expertise.

With that in mind, it's no surprise that it is increasingly being argued that the record-high stock indexes are doomed simply because investors appear to be belatedly gaining confidence to test the waters, so to speak.

For Don Hays, founder of Hays Advisory Group and a 40-year veteran strategist, nothing could be further from the truth than to suggest that investors have gotten overly bullish.