Greetings from New York, where last night was one of those evenings where my body and brain staged a flat-out uprising against my will, refusing me even a wink of sleep.
How did I kill the time? Roughly 2 hours trying to sleep; surrendering at 1 a.m. and kicking the wife into the guest room so I could a) read John Kenneth Galbraith’s The Great Crash
, 1929 b) watch the episode of PBS’ American Experience
on FDR c) fret that I just may have become an Obamaniac (which would require blood tests, sheepishly explaining how I caught it to Mrs. Jeffmacke, a possible bumper sticker and drifting into the sweet release of death as my bumper-stickered car idled in a closed garage).
The administration, so hyped just a month ago, spent its first 30 days lowering expectations like a teen retailer. I confess, I went into the speech cocky. I'm the Roy Hobbes of cynicism. It simply never occurred to me that my love of a well-delivered speech could overcome the sole natural gift I’ll claim freely: the gift of inherent mistrust of any and all flimflammers or hustles.
Ben Bernanke softened me up; the President finished me off. Despite several nods to the mess he “inherited” from George W. Bush (and a needless tangent into stoking the fires of class warfare), President Obama largely gave me the broad strokes I’ve been pining for over the last week.
This wasn’t the place for wonkish details. Addressing Congress is a time for broad strokes and rhetoric. The president said the right things about being tough on the automakers, seemingly drawing a line between the banks and other industries. I hated his lack of restraint on spending but I voted for a guy who used his pre-9 /11 Congressional address to announce plans for a manned flight to Mars by 2020.
Had I final edit authority on the speech, I would have scrapped the pandering to his party, added some shots at the pork-laden stimulus package put together solely by the Democrats, and subbed in one major theme that's beginning to glare by omission: unity between classes, parties, industries and Americans as a whole.
The president assured us we’d win, citing our history, but didn’t touch on how we’d achieved prior victories.
Lincoln stood for a united United States (to which he later added freeing slaves). FDR stood for overcoming fear itself and later oversaw a pretty darn solid American war effort. Lincoln delighted in Sherman making “Georgia howl” but, in his final speech -- the greatest in Presidential history -- he sounded a shocking tone of unification with the very rebels he’d spent the entirety of his first term suppressing. (Read the final paragraph of Lincoln’s Greatest Hit here
President Obama shamelessly draws parallels between himself and the Great Emancipator. You can’t cite the Civil War effort as an example of American will in the same speech you take potshots bankers and fat cats “in their private jets."
If Lincoln could leave it to God to levee judgment against slave-trading rebels in order to “bind up the nation’s wounds, to care for him who shall have borne in battle and for his widow and his orphan,” isn't it possible to ask and expect our young, ambitious president to refrain from yet another moan about W. leaving him a deficit? It’s a tired point made in the wrong forum.
Other than that, we have a president reclaiming control of the moment; a Fed chair who seems to have discovered Xanax, scotch or leadership in the last 6 months (whatever it is, Mr. Bernanke, make mine a double); and some level of restraint on the bailout spending coupled with an argument for understanding and compassion towards the regular citizen - who would, and will, bear the brunt of a class-warfare backlash and looming low-level cutbacks.
Deduct points for President Obama not having a good last edit. Add points back for his having Leapin’ Nancy Pelosi, as opposed to Angelo Dundee, backing him up last night, and I’m giving the speech an 8.5. Better than good enough, at least to push back the growing panic and, to my horror, good enough to make me deeply concerned at my falling in lust, if not love, with the one type of person still socially unacceptable for a man like me: a president who wants to raise my taxes and quasi-nationalize my banks.
I don’t see a lot of great set-ups but I’ll be trading it today just to keep my mind off my shame (and to try and stay in front of a looming 95% tax rate). Here’s the playing field as I see it and the names I’m watching:
Got an email from a new Minyan last night expressing displeasure (in a polite, reasonable way) with the nanosecond timeframes underlying my flip-flopping trades in the SDS ETF and Morgan Stanley (MS) yesterday. It raises at least 2 points worth mentioning again:
1. This is an extremely fast-moving market, and 2x levered ETFs and banks stocks are leading the way. Keeping the SDS on a very tight leash is something I’ve discussed repeatedly. Yesterday, when the market bounced off the intra-day lows of November 2008 and shot 1% higher, I saw a trading shot that not only wouldn’t last long but would beat me senseless if I wrote first and traded it later. I prefer to stay in front on ideas, and really loathe the idea of coming across as a “magic trade” guy, but feeding the kids is job #1 with communicating the message a distant second.
2. Morgan Stanley moved nearly 20% yesterday. I was long going in, and added at $20 and change, so I’m not claiming I caught all the move. But in this tape, I’m apt to take any gains on a trade. I’d rather hold stocks forever in a bull market but we’ve got to trade the tape we have, not the one we want. Until I start shouting otherwise, just assume I still consider buy-and-hold dead.
- What trades did I make on today’s open? None. I’m small and slightly less short-leaning than I was 24 hours ago.
- I’ve got company in that “stick and move” thinking, according to Steve Wynn (WYNN). The "king of casinos" offered players taking wins off the table and ceasing play as one of the reasons behind his eponymous company’s earnings miss last night. If you’ve built an empire with the sole design goal of maximizing ostentatious luxury in order to get players to stick around long enough to lose money, an environment where hiring Sheryl Crow for a party draws Congressional ire is daunting to say the least. Leaving Las Vegas, indeed.
- That said, as a man of the people who's willing to do his part by stimulating the economy in private, I promise not to attend any Sheryl Crow concerts in 2009. Sacrifice? Sure. But I’m willing to give up jamming to the contemporary pop stylings of Lance Armstrong’s ex if it means setting an example for the kids.
- Two trades I’d make despite the financial anarchy they'd imply: Buying gold (or some derivative thereof) on a convincing break over $1000 and shorting the market if the S&P 500 tumbles below 740. Sure, I’m late the trades, and I’d be capitalizing on human misery. Cut me some slack, I just gave up Sheryl Crow.
- Would I be late to the gold party? The comparison that leaps to mind is showing up for a New Year's Eve party tonight. Which is why I can, and will, wait for a breakout. I don’t believe in triple tops or triple bottoms. Preying on human misery or not, buying breakouts and breakdowns gives you tight stop levels you don’t have to think about ($1000 on gold and S&P 741, for those who skipped to this bullet). And emotional markets trade on technicals, suggesting potential “whoosh” action on each trade.
- Regarding that Mars mission, I’m not entirely giving up hope. If we could fake the moon landings convincingly using 1969 technology and blurry footage of a Volkswagen wrapped in tin-foil, today’s CGI technology could certainly give a nation struggling to believe in a nice goal for the next decade. The “mission” (wink) wouldn’t save the ogre-ugly quarter DreamWorks (DWA) just turned in, but a fake Mars project beats the heck out of subsidizing a generation of workers making cars no one wants by a mile.
- Global warming may be as phony as the moon landings but, if I’m reading between the lines of Obama’s speech correctly, Toyota (TM) has the best products and the distinct advantage of not needing to beg an increasingly obnoxious and reluctant Congress for money. As rued in public, I bought around $60 and sold a painfully partial position on the move to $70. I’d be a buyer on a revisit of $60 and a seller at $70. Anything in the middle is simply noise.
With that, I’m off to take my sleep-deprivation-driven logorrhea to my yoga instructor. Don’t worry, she’s been warned.
No positions in stocks mentioned.
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