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Black Friday Potpourri


You gotta love the holiday season.


When Black Friday comes,
I'll stand down by the door,
And catch the grey men when they
Dive from the fourteenth floor.

(Steely Dan)

You gotta love the holiday season. I awoke this morning, a bit begrudgingly, to the sound of Jingle Bell Rock on my alarm clock and the taste of turkey in my mouth. Further, while the television screams of green dreams, my pre-morning monitors are red with dread. Green and Red top button blues? Yeah, 'tis must be the season.

A first blush glance around my turret finds
Europe and getting jack hammered (-1.5%, on average) and the greenback at a 19-month low against the Euro. We eyed the dollar dandruff on Friday and today's 88 bip blast has officially added flakes to that cake. Does anyone else get the sense that perception of slower growth (and potential rate cuts) has finally seeped into the collective reality?

The only other potential catalyst (for the global slippage) that I can garner is the news from Iraq. Yesterday's death toll of 202 was the deadliest from coordinated attacks since the US-led invasion in March 2003. The unfortunate situation over there hasn't impacted stocks for a long time (government spending aside) but perhaps the notion of civil war is also sobering up those who showed for work? Prayers to those in the crossfire and many thanks for those of us who aren't.

The Following IM Took Place Between
9:00 AM and 10:00 AM

Ken: Markets saying higher rates, eh?
Toddo: Actually, I think it's saying a rate cut is coming.
Ken: No way.
Toddo: Yep.
Ken: Inflation is the beast that won't go away.
Toddo: Plus slow growth. It equals...anyone? Bueller?
Ken: He won't cut just because the economy is slowing.
Toddo: Stagflation.
Ken: I know-- but inflation is still goin' up, companies making less money will try and raise prices to offset the decline-- until they can't.
Toddo: I'm sure this will be a big topic at Friday's MIM-CCA Event.
Ken: Everyone in the room thinks the same way, though--
Toddo: Actually, not true cookie--look at the line-up, Steve Galbraith? He's a pretty pragmatic thinker. Jeff Saut? Same. Jonathan Golub (US equity strategist JP Morgan)? Big bull. Jeff Bernstein (Keel)? Sharp two-sided thinker. Macke? Bull, Erlanger? two-sided. Shobin? Pretty optimistic guy
Ken: You know, you're right.
Toddo: Add that to the Pomboy's, Succo's, Weldon's, Sedacca's and Harrison's of the world and you've got a pretty diverse set of eyes looking at the world.
Ken: Alright, you're right---sheesh! But who's that Harrison guy?
Toddo: Just a fat guy in a little coat...
Ken: This is a tax write-off, no?
Toddo: Yep, it's for the kids. 100% of the afternoon gig is a write-off and all but $125 of the snazzy soiree is the same. But trust me, you'll wanna stay for the party. It could very well be the best MV Event to date. And that's saying something!

Minyan Mailbag


Can you please explain something? You just mentioned the current disconnect between perception (mood on the Street) and reality (all-time highs) is as broad a chasm as you've ever seen. Does that mean the mood on the Street is very bearish? I thought the Street and prices were in sync (up, up and away). What am I not picking up?

Thanks, Minyan Jack.


You're correct that psychology, as measured by many sentiment gauges, reflects "all-time high" sorta thinking. I was referring to the disconnect between those aforementioned highs and the reality that most people face. The "Haves" notwithstanding, most folks are being squeezed by higher energy, healthcare and education costs while making less, both in terms of wage growth and with regard to our shrinking basis of currency (the dollar). It doesn't feel like we're at an all-time sweet spot. Far from it, actually, and that's what I was referring to.

Thanking you,

And Finally, some Random Thoughts

  • Check out the big brain on Bob and the action in the metals. We noodled the upside in this group through the lens of dollar dandruff last week and true to form, they're acting accordingly. Hey, even a broken clock is right twice a day.

  • The other side of my book is long puts in the financials. They've been a lesson in "bend not break" and, until they do, the tape certainly won't. With that said, keep a close eye on the BKX as it sits on the trendline from the summer lows.

  • Tell Check? Nazz breadth is bunk (2:1 negative) although the fixed income jig is skewing the NYSE internals (3:2 negative). The homies are trying to creep (higher) while most sleep, the semis are pretty in pink and the small caps are a wee bit smaller (but nothing to write home about).

  • Meanwhile, the dollar is off almost a full percent (session lows). I've long offered that the only way that equities could rally was with a softer greenback but that, of course, doesn't mean that they must rally.

  • There were some pretty meaty call buyers in Yahoo! on Wednesday. So you know and if you care.

  • Retailers are pretty docile today but I'm hearing that Television's JeffMacke® is spending the day dutifully channel-checking the wardrobe department at Sears.

  • Just what is a conspiracy theory? A theory that isn't widely accepted? Something like, say, Princess Diana's death not being an accident? TWA Flight 800 not being mechanical failure? Controlled demolition at the WTC? OK, fair enough--those are most certainly conspiracy theories.

  • But what about the thought that the only difference between intervention and manipulation is communication? Is that a conspiracy theory? If the BOJ is bought $/¥ to buffer the market--and told us--so be it. But if they didn't communicate their action, it would most certainly be government manipulation.

  • So, I ask Minyans this on a slow, quiet, thin session. If the stock market is the world's largest thermometer, is it unrealistic to think that on the heels of 9/11...or post Iraq...or into the elections...there's was some uncommunicated propping going on? Are you 100% sure? 90%? 75%?

  • Have a great weekend, Minyans, and we'll see you bright and early on Monday as we ready for our Fantastic Year-End Festivus!

  • R.P.

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