• Did that last point of recognition arrive when Alan Greenspan graced the front page of the New York Times yesterday?

  • If I’m gonna foot the bill as a taxpayer, I want an equity stake (warrants) in return. While that approach would be painful for current stockholders of financial institutions, it’s entirely more palatable than the alternative.

  • The path of maximum pain for most Americans plays out like this: The savers—those who sold stocks and/or preserved capital—get the double whammy when the dollar debases and everything denominated in dollars jacks higher.

  • That’s the other side of Our Wishbone World and it may be unavoidable at this point. A seismic readjustment of the dollar is one of the few ways the global system can readjust.

  • Does anyone wanna bet a finski that Citigroup (C) is “first up” for a capital injection now that Wells Fargo (WFC) has (correctly) wrestled away control of Wachovia (WB).

  • Bank America (BAC)  $22—where the secondary was priced—now shifts from support to resistance.

  • My vehicles for this trading try are centered in the energy space—Weatherford (WFT), Transocean (RIG) and Oil Service (OSX) calls—for those watching at home. My cost basis is higher but I’ve been trading around them and will continue to do so.

  • Two vehicles on my laundry list are Gold and the Japanese Yen (FXY). The reason for my patience is the perception of a counter-trend equity bounce and better entry levels on both.

  • Professor Smita noted on yesterday’s Buzz that the last four Mondays saw the S&P decline 59 points, 48 points, 106 points and 42 points, respectively. That’s worthy of a re-mention as psychology squares into the weekend.

  • Do I believe the rally will be tertiary? Yep—my current posture is “just trading” in the context of a prolonged period of socioeconomic malaise.

  • I’m coming from a place of dry powder so I’ll again ask Minyans to operate within their own zone of comfort.

  • After many years of real estate avoidance, I’m starting to sniff out some property in upstate New York (that is in or entering foreclosure). I’m not one to profit from other people’s pain but given this was one of our Five Reasons for Optimism, I wanted to follow up on the thought.

  • Yes, I know a little something about financial engineering from my days at Morgan Stanley.

  • Technical indicators, by definition, don’t work in a crash.

  • I’ve heard of capital punishment but classical punishment?

  • I should have listened to myself on the Retail Therapy vibe. Then again, virtually any ursine inclination has been rewarded in a massive way.

  • Iceland is supposed to be green and Greenland is supposed to be chilly.

  • Given Iceland is frozen—markets have shut, currency trading has stopped and three banks have been seized—does that mean we should be warming up to Greenland for a trade?

  • Fear has gone global. The Central Bank of Jamaica just issued a statement that said “Just Chill, Mon, Every Little Thing is Gonna Be Alright."

  • So much for VXO 70 as a cycle high (it closed at VXO 75 yesterday). Either way, I believe we’re deep in the throws of the panic phase of denial-migration-panic. Just remember that price discovery is a process rather than a point.

  • Please BE CAREFUL when trading options given the outsized volatility.

  • I wanna do some work on India as I believe they’ll be a winner in the New World Order. Once upon a time, they—like China—could do no wrong. The logic was sound but timing is everything and yes, their time will come.

  • Remember the harsh feedback I got when I went on Yahoo TV on July 2nd and said I was 100% cash? (Warning: the language on the message boards isn’t exactly PG-13).

  • It was similar to the pushback I received when I dared offer that crude was about to pop in May and it would be endemic of slowing global growth rather than serve as an upside equity catalyst.

  • I started picking up similar vibes as I’m laying into equity exposure for a trade. It’s anecdotal, to be sure, but that—coupled with additional equity exposure—will likely motivate me to slip an arm into the bull costume and make 75% conviction that an upside trade is looming.

  • Two housekeeping items as we attempt to keep it real.

  • Good luck Minyans and as always, I hope this finds you well.


R.P.

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