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Random Thoughts

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Either GS is gonna pull the tape higher or the weight of the world will pull it lower.

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  • I'm long Jack Bauer and short Ricky Schroeder in size.

  • Stems and seeds? Maybe, but I made a round of disciplined sales in some puts (market exposure) into the opening drek as a function of discipline. That doesn't shift my posture--it's just that, with positive gamma, you get shorter lower and longer higher. The price you pay for that is theta, or decay.

  • A snapshot of my eight screens finds a tug-o-war of monster proportions. Boo and his crew are standing to the left of S&P 1400 with LEND, rolling homies (HGX -2%) and nosty internals (3:1 negative) anchoring their cause. Hoofy and Hank Paulson, meanwhile, have dug in on the other side of that ride.

  • One might think that I'm smarting after being quoted in the WSJ saying "what happens in Goldman's shares on any given day is a good indicator of what's happening in the market," just in time for this chasm (GS up, tape down). But au contraire, Mon Frere, I think that is that very reason the market is still afloat. No other stock in the universe would have this much "pull" and it's a testament to the mojo therein.

  • I have, so you know, nibbled a bit on some puts with a stop level through GS $210. Either GS is gonna pull the tape higher or the weight of the world will pull it lower. Not advice, natch, just sharing my process with hopes that it helps yours.

  • Hey Mr. Bojangles! The only field of green--so far--is the energy patch. OSX 205ish is the level to watch in that regard.

  • It was only a matter of time, eh? There's loud chatter overseas that a large fund is getting wishboned in currency trading (Sterling/Yen to be exact). That's sparking chatter of forced liquidation in a bevy of marketplaces.

  • Accredited Home (LEND) is suffering from an organic 2:1 split. Ouch.

  • Everyone seems intent on assuring us that the sub-prime mess is containable. The risk to that theory--and this is a risk--is that upwards of $370 trillion worth of derivatives ties together our financial fabric.

  • Do you wanna brush up on some required reading on risk management? Read this article. And then read this article. And then, please, read them again. Deja vu all over again.

  • Chatter on the Beltway is that a massive telecom spend is about to be allocated. Keep your eyes peeled (and thanks for the heads up, Minyan D-Hines).

  • Has anyone ever eaten a vegemite sandwich? The whole thing sounds like a backward tofu craze to me.

  • I know it's Turnaround Tuesday and, as such, I've got mad respect for both sides of the ride. Still, we can do anything as long as we're disciplined.

  • "Actually, Goldman's (GS) quarter ended Feb. 23. Goldman always closes its quarters the Friday before the month's end. Just a hunch, but this could be why Lehmen (LEH) and Bear Stearns (BSC) are not getting any sympathy. That, plus the fact that only Goldman is Goldman, you can't compare books too closely and there's always a sort of "zero-sum game" feeling in prop trading. Not all the children can be above average." Minyan Michael Santoli on today's Buzz.

  • Deep breaths, Minyans, we're a few short hours away from our weekly Hump. And weekly humps are always a good thing!


R.P.

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Position in GS, SPX, financials
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