Monday Morning Quarterback: Back in the U.S.S.A.!-Minyanville

BUSINESS & MARKETS

LIFE & MONEY

VIDEO

COMMUNITY

SUBSCRIPTIONS & PRODUCTS

Monday Morning Quarterback: Back in the U.S.S.A.!

Todd Harrison Sep 22, 2008 8:00 am

Monday Morning Quarterback: Back in the U.S.S.A.!


		The government has changed the face of the financial world.

With that said and respected, I would like to draw your attention something I picked up over the weekend. There is chatter on the beltway that we’ve been the victim of economic terrorism, a coordinated short raid coming out of the Middle East.

While we don’t “do” rumors in the ‘Ville, my source is well respected.

Further, it makes intuitive sense as the goals of terrorism are economic destruction and social upheaval. The stock market is the world’s largest thermometer and “breaking” the capital market construct—as some would say they did last week—would effectively achieve both goals.

STOCKS
RELATED ARTICLES
ALSO BY...

Whether or not that proves true, I would expect a coordinated agenda to emerge from Washington akin to what we saw after September 11th, 2001.

During that period, the lines of distinction between bullishness and patriotism blurred and it was considered un-American to be a bear.

What we saw last week was in many ways an extension of that as it’s now illegal to bet negatively on a select—and growing—segment of the market.

That’s phase one, I believe, and phase two will emerge as a growing chorus that if you’re not part of the solution, you’re part of the problem.

I will be very clear. Minyanville is as American as apple pie. We love everything this country is supposed to stand for. We love capitalism. We love small business. We love the notion that you can invest in what you believe in and be rewarded for your efforts.

We have been critical thought leaders into this crisis and we will continue to offer our very best vibes as we edge through it. This is bigger than the next best trade or a quick little schnitzel. It’s about preparing for the future with integrity so our children will have a country they can be proud of.

We, the people, must persevere and it’s incumbent on us all to do just that, independent of whether we agree with the steps that are being taken.

History Doesn’t Always Repeat but it Often Rhymes

Following this profoundly stressful stretch, I pulled an old fashioned Friday night face plant at the end of last week. When I arrived home, I cracked a bottle of Pinot, ordered some Chinese food and searched pay-per-view for some mindless entertainment.

I stumbled upon Dog Day Afternoon, the story of the 1972 bank robbery gone awry. As there are no such things as coincidences, the similarities between past and present day began to crystallize.

Societal acrimony was running rampant. Tensions were running high.

Heck, the scene when Sonny lobbed gobs of money under the helicopter and the masses scrambled for it was eerily reminiscent of Ben Bernanke.

I bring this up for a few reasons.

First, it’s a pretty good movie—even though Jack Nicholson and One Flew Over the Cuckoo’s Nest won the statues—and secondly, it segues nicely into an analog fished out by Professor Kevin Depew.

The present day path continues to track the period from 1971 through 1976. While there are dangerously different structural underpinnings now, I thought this warranted a mention.

Click to enlarge

Kevin also drew our collective attention to the following historical perspective on Friday’s Buzz & Banter.

“Attached is a chart of a market, Pakistan's Karachia 100 (KSE100), that back in June banned short selling for what was supposed to be one month.

Click to enlarge

Some things to keep in mind.

1) The ban, initially for 30-days, is still in place.

2) The limits/collars on trading were set at -1% and +10% (all trading halted for the day when stocks go down 1% or up 10%).

3) Those collars were taken off on July 14.

6 of 6 (100%) found this helpful
Rate this article:			(6 Votes)

more BUSINESS & MARKETS articles »

Daily Article Index �

tags:

SHORTS

Comments (29)

See All Comments »

Davd Leffingwell

View Exchanges


09-22-2008, 4:54 pm
This latest market violence is not a direct result of terrorism, but an indirect result of 9/11. Here's my reasoning... After 9/11, the American psyche was greatly affected. Realizing our human frailty, we focused on tangible thing Read More

Sek Smith

View Exchanges


09-22-2008, 8:29 pm
Dan, I am very much in tune with your thoughts. But in this dark hour for introspection, I would try to look even further to human nature as the real flaw in the system. Why, the very way we measure progress (as a function of greater ac Read More

Dan Conine

View Exchanges


09-22-2008, 9:42 pm
"the current bailout will add NO value to the spending power of the consumer and have no multiplier effect. " In fact, it will take away from the power to spend by increasing taxes or devaluing the dollar, most likely both, a Read More

J S

View Exchanges


09-22-2008, 10:16 pm
Excellent observation. Is this the only forum that understands eco 101? Perhaps Ben should check in here from time to time. As for'29, without regard for politics: It is a fact that accumulation of wealth at the very top slows down money veloc Read More

Brian Rauchfuss

View Exchanges


09-23-2008, 8:14 pm
I guess it was Dodd - for some reason I mix those two up: From Yahoo News: "Getting the action right is key, Dodd said: "There is no second act to this." He later spoke disparagingly of the administration's propos Read More


discuss this article and more on the mv exchange

No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options. Click here for a free 14 day trial to OptionSmith by Steve Smith.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.