Bail before Bernake & Bank Reform

There are some key decisions and votes taking place this week that could drastically change the outlook of the market. Bank reform, as well as the Fed Chairman Election are on the radar this week which are sure to shake the market up. But which way? It is our view, as well as many, that this week is going to see some drastic swings for both the bulls and the bears. BHMP is liquidating all of our blue chip stocks in order to avoid a potential large looming market correction that may have started last week. The driving force? Bernake. If Bernake is not re-elected as the Fed Chairman, someone who many consider the savior of the American financial system, the markets will lose a lot of faith in U.S monetary policy. Investors right now have a good feel and understanding of Bernake's direction for interest rates, inflation control, and other financial metrics. If he is out, then investors are going to flee not knowing what the effect will be on monetary policies. Can you blame them? To compound this potential threat, Obama is attempting to push a regulation on big bank profit. Although many would agree that banks and politicians should not be making so much money when they can be viewed as a direct source for the economic downturn we have witnessed. But investors won't be happy, after all, if you take away (regulate) profits from any publicly traded company, wouldn't you sell? Many continue to invest in banks in the hope that large dividends will return in the near future, but if regulated, the banks will lose those same investors that have helped bring their shares to reasonable levels. With everything on deck and up in the air, we are liquidating our blue chip stocks in order to let the waters calm. If everything follows a best case scenario, the market will gain back its losses, and you will have plenty of time to get back in. However, if it goes the other way, the potential downside could be extremely harsh. Is it worth the few percent you will gain back to risk being caught in another market downturn? We recommend waiting it out, and getting back into your positions of interest when the dust has settled. Good luck!