Freaky Friday Potpourri: Help Wanted in Washington!-Minyanville

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Freaky Friday Potpourri: Help Wanted in Washington!

Todd Harrison Sep 05, 2008 10:24 am

Freaky Friday Potpourri: Help Wanted in Washington!


		Bill Gross has joined the march to the Treasury.

Time and price are the ultimate arbiters of our financial fate and the current process of price discovery has us in the most interesting juncture in the history of financial markets.

Capital preservation, debt reduction and financial literacy remain core tenets of any successful approach. Inherent in the last aspect of that process is a proactive awareness of what’s going on in the world.

When Bill Gross, the world’s biggest bond fund manager, is kicking the tires of socialism, we must ascertain how quickly the air is deflating in the world around us.

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Welcome to deflation, Minyans, where asset classes, egos and social mood will contract in kind.

Some Random Thoughts

I nibbled on some General Mills (GIS) and Coca Cola (KO) calls yesterday and paired those against Sears Holdings and Wal-Mart puts for a trade.

This effectively sets up a Consumer vs. Consumer bet, with non-durables on one side and retail on the other. Why? Glad you asked.

The recent commodity meltage significantly reduced input costs.
Consumer non-durables will NOT pass those savings through to consumers.
That will help margins at General Mills, Coke, Johnson & Johnson (JNJ) and others.
The consumer, meanwhile, continues to struggle with home equity deflation, stagnant wage growth, rising unemployment and percolating societal acrimony.
That will serve as a headwind for retailers such as Sears (SHLD) and Wal-Mart (WMT).
Egads! Short Wal-Mart? I was dressed down by my brother Jeff Macke yesterday for taking the other side of Sam’s Club, one that is the best acting stock in the Dow Jones Industrial Average this year.
While actions speak louder than words, I’ll say with all due humility that the very fact that a retailer holds that top spot is reason alone to scrunch our nose.
Be that as it may, discipline must always trump conviction. As such, there are two potential “stop loss levels” in Wal-Mart, above $61 and above $64.

What else have I been doing? Something very important...

I’ve been shooting out sponsorship docs for the 2008 Minyanville Festivus to benefit the Ruby Peck Foundation for Children's Education.

We pride ourselves on the company we keep and we're splashing sponsors far and wide. If your organization has an interest in supporting this near and dear effort, please ping me personally and I'll get you some dets.

And yes, any gestures in the good name of my grandfather is considered a personal favor as we do our part to affect positive change in challenging times.

Answers I Really Wanna Know….

Have you read Bennet's excellent update of his bubble comparison charts?
Why does it take something bad to make people realize they've had it good?
For haven't we been screaming about the disconnect between credit and equity, both in the 'Ville and on the air?
When are Hank and Ben shoot one of their two remaining bullets with hopes of spurring the herd?

Will the first one be fired at a ghost?

Will the second one be pointed inward?

Will this Rolling Stone continue to gather moss?

Capitulation---with the VXO at 26?

I mean, Jeez Louise, does anyone realize that previous pain fulcrums occurred when the VXO was TWICE as high as it currently is?

While that doesn't mean we can't rally, isn't it a glaring sign that we can fall much further?

Can I share that the best trader I've ever met told me that he made more money being bearish in a bull market than being bearish in a bear market?

With stock buybacks ending at 3:30 and redemptions (forced selling) beginning at about the same time, are you ready for things to get a tad nuttier than they already are?

Now that the “lower crude is equity positive’ myth is debunked, will Minyans please remember that a higher dollar will be an equity (asset class) death knell?

OK, OK, OK—no more Debbie Downer. Jeez! Take a deep breath and know that in less than six short hours, we’ll be turning it off, tuning it up and kicking back for a weekend full of football. Noice.

May peace be with you.

R.P.


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Comments (7)

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Mad Milker

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09-05-2008, 2:13 pm
is it true tat the bald guy don't eat grits.... Read More

Dean Simmons

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09-05-2008, 4:51 pm
Do you ever run your random thoughts through a spectral test (Knuth, "Seminumerical Algorithms", Vol. 2, Sect. 3.3.4) to see if they are truly random? Why do you think the Fed has only two shots left? I see 8 25-bip shots lef Read More

Bob Krause

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09-06-2008, 3:59 am
It absolutely blows my mind that "Bill Simon's Babies," the preferred shareholders (and also the common stock folks) are even being CONSIDERED for a free ride by the US Treasury. These are Adam Smith's patriots that took once Read More

T Scott

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09-06-2008, 9:50 am
Yea, that ain't likely to happen. When all things debt is the backbone of this great society the rules have definitely have changed. The question now is... After the next rounds of tax cuts, who is really footing the bill? Read More

Matthew Svetlecic

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09-06-2008, 11:26 am
You call those bullets? That"ll give us the opportunity to not borrow at even lower rates. Read More


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position in shld, wmt, gis, ko.

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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.

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