It's 106 miles to Chicago, we got a full tank of gas, half a pack of cigarettes, it's dark, and we're wearing sunglasses. Hit it!
--The Blues Brothers
I'm under the gun this morning as I've got a midmorning midtown meld and a high noon business lunch—and I've gotta file my amNY column before I skedaddle—so I'm gonna cut to the chase with some top-line vibes as we power up this Thursday grump. In no particular order:
I enjoyed last night's Bloomberg Rewind
co-host gig, in large part because the format allows for an intelligent discussion as opposed to other media outlets that ask, "What's wrong with Europe and how can we fix it...you have 17 seconds to do so—and we need a stock pick! We'll post it to the 'Ville as soon as it's ready.
We talked tape, among other items, and I communicated that while I've traded from the long side since December 2011—individual stocks like Research in Motion
(RIMM), where I've got a placeholder at present—I've been tapping the short side to see what kind of will the bulls have. And while I got clipped last Friday
and flattened into the weekend, I re-initiated partial short-side positions (25% exposure) in both the S&P
When Matt Miller asked what it would take to establish a full position, I communicated that if
the market spiked higher on a Greek resolution of their debt dilemma, I would likely unleash the hounds for a more sizable short-side stab. Of course, we seemingly received resolution this morning and the tape is flattish, which has an entirely different set of implications as we find our way forward.
Matt also asked me about the depth of my perceived gut-check, if and when, and I told him, "Until the dip buyers, who have that style ingrained on their brain, get burned on a few attempts and no longer wanna buy the dips. Of course, I could be wrong—I've never even been to Mt. Vesuvius
—but that's what's inside my mind's eye as we tickle our way toward S&P 1360
Other Snapshot Random Thoughts:
The former four horsemen have enjoyed a renaissance of sorts, with Intel (INTC), Dell (DELL), Microsoft (MSFT) and Cisco (CSCO) rising up from the ashes after being left for dead. Hey, if I had no heartbeat for a decade, I'm sure people would think I expired as well.
The NEW four horsemen, of course, are Google (GOOG), Apple (AAPL), Facebook (FB) and Amazon (AMZN), which sets the stage for some wicked chariot races over the course of the next decade.
Groupon (GRPN) MUST hold the $20 issue price or risk denting the overall tech psychology (and perhaps the IPO parade). Either way, my sense is that it will come to rue the day it walked away from Google's $6 billion offer.
Greece matters but what matters more is the precedent it sets for other troubled sovereign nations. And the vernacular surrounding this story makes me feel like I ate a silly sandwich. A 75% "voluntary" haircut? OK boss, now give me a dollar and I'll give you a quarter—but that's your choice!
Everyone is scared of what happens if Greece (or Portugal or...) doesn't accept the austerity playbook that European policymakers are stuffing down their throat. Riddle me this: What happens if they do? What does global growth look like then—especially if you remove the government IV drip?
I mean, other than social unrest and geopolitical conflict.
Perspective check: The S&P and NDX are up 25% since October 2011, while the BKX (banks) are up 40%. Indeed, the (cough) easy trade was when nobody wanted to buy them and the smartest guys in the room told you to curl up in a corner and suck your thumb.
Now, of course, we've got the mirror image of that psychological scrimmage.
If you sense that we're living in two alternate, parallel universes, that's because we are!
The debt sandwich looks like this: extended consumers on the bottom, dependent on financial assets, be it the stock or housing market, to rebound, strong corporate balance sheets as the middle meat (as a function of TARP and other government policies that allowed them to roll obligations to the future), and the sovereign slice above, which I'm honestly fatigued to discuss after two years.
Inflation in things we need, deflation in things we want.
I've gotta jump and juggle; I will check in as able throughout the day as navigate the world's wildest reality show. Good luck!
Positions in SPX, NDX, RIMM