Buzz Bits: Dow and Nasdaq Take a Slide
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We Got a Bleeder Here! - Todd Harrison - 3:17 PM
There's something about Ben, eh? The "25 and 25" snippage zipped the beans and flipped the green on what was otherwise a rather dull session. While 50 bips wasn't forecast by the fed futures markets, it seemed to be the whisper number in Matador City. When it didn't hit, the market spit and here were are, hanging with Warren. Some Thera-vibes as we bring it home:
- Dollars to donuts, perhaps literally, the FOMC couldn't cut fitty without invoking the wrath of foreign holders of dollar denominated assets. As it is, we're in a pretty pinch.
- Keep an eye on General Electric as there are alotta headlines scrolling across the tape. One name does not a market make but it could color sentiment into the close.
- Some bears are rumbling that the Fed blinked for the first time, not giving the market what it wanted. I would argue that they've had a twitch for quite some time.
- With all due respect (we don't do acrimony in Minyanville), I would offer that--in addition to gas and groceries--education, medical care, insurance---in short, anything we need--has experienced mas inflation the last few years.
- Congrats to Vikram Pandit, the new CEO at Citigroup, with whom I worked at Mother Morgan and always found to be a gentleman. Good luck sir.
- Dear Prudence, the definition of an investment should never be a trade gone awry.
This one is gonna hurt... - Fil Zucchi - 2:51 PM
Boom Boom almost did the right thing. Had it spared us the pandering 1/4 point begged for by financial speculators, he would have finally shown the kind of stones that will be needed to guide us out of the current mess. Equities do not like it one bit, as well they shouldn't; the wimpy move is likely to worsen the credit environment and the financial markets as a whole could be in for a year-end pasting. So why do I suggest the Fed did the almost right thing?
Because one cannot devalue its way out of a gigantic pile of debt. Companies, many companies, need to fail, go away forever, and allow those who have a business existing to once again prosper not on the back of borrowed money, but on the strength of real demand, rather than demand generated by a need to circulate make belief money.
Had the Fed figured this out in 2001, by 2003 we would likely have forgotten the then recession. Instead it decided to try to fool everyone into believing that we could borrow our way into a permanent plateau of prosperity.
Fed Day Blahs - Jeff Macke - 12:17 PM
Greetings from New York where I know I'm supposed to be professionally obligated to get my undies bundled ahead of Fed Meetings but, honestly, I'm just not feeling it. It's December. The year has been largely booked. If it was more than 10 degrees outside, I'd be golfing. Here's what else I'm comfortable sharing as we glide into the approach of Fed Notes:
- Minyan Woo Woo Kid asks me what I think of McDonald's (MCD) which is making a new high again today after beating sales estimates yet again. What do I think? Kid, I think McDonald's is a great American Franchise on a world class roll. I can't be anything but bullish...
- While not two great American franchise names, THQ Inc. (THQI) and Take Two (TTWO) have been screaming higher in the 6 trading days since Activision (ATVI) got semi taken out by Vivendi (VIV). As I've been saying on Fast Money, at about $2 Billion take-out value and coming into the sweet-spot of the gaming console cycle, I think both TTWO and THQI can work as long ideas.
- Congrats to Pretty Boy Floyd who made me look pretty smart on Saturday night by taking out Ricky Hatton, concluding a great year for boxing. Floyd danced with the Stars, won two huge fights and made some $50 million in 2007. I wonder if he cares much what the Fed says at 2:15.
Waiting for the Fed - Quint Tatro - 11:35 AM
As I go through my charts this morning I don't see much at all. It looks as if just about everyone is waiting for the FOMC to be out of the way before they try anything of significance. I always try hard to negate the noise from the outside, however stocks have run quite a bit ahead of this meeting and there aren't as many prudent opportunities presenting themselves. Regardless of whether or not there was a Fed meeting on tap, I suspect I would be taking gains and positioning myself more cautious waiting for either more charts to set up, or a dip to set in.
As I continue to square off positions, I booked my profit in Memc Electric (WFR) just now after a 20 plus point run in less than 4 weeks. I will look to remount when the stock sets up again for a prudent entry.
I also humbly covered half of my AT&T (T) short as it broke into the $40's. I still believe this stock is damaged but I am not going to fight the squeeze as I suspect analysts will jump on the horn soon to trumpet the company's recent news. I will keep half of my position with a stop not too far away to see how much juice this squeeze has.
Other than that, I am waiting and watching. It should be an interesting rest of the day.
Position in T
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