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Mailbag Grab-Bag


The market is a leading indicator and by the time rationalization is justified, the price action will already be baked in the tape.


You mentioned that "the market is never wrong." I disagree, and have lost money in the past believing that. I think it is much more accurate to just say the market is "what it is" and there's no sense in arguing. In fact, if the market is never wrong, why would we ever need a correction? The market can stay irrational (wrong) longer than you can stay solvent.

Minyan Dan

Point taken M-Dan, although I was referring to the fact that the bottom line is the ultimate arbiter. That statement was in response to how some folks in the mainstream media said the market was "wrong" for reacting to last week's news as it did (the fundamentals and economy didn't change). The market is a leading indicator and by the time rationalization is justified, the price action will already be baked in the tape. Thassall I was trying to say.


It is very scary to see all these carry trades, equity markets, and commodity markets showing massive correlation right now. Take a look at the AUD/JPY, GBP/JPY, USD/JPY and NZD/USD. How do we get an orderly unwinding of the leveraged carry trades? I am glad that I am not a central banker at this point. This is going to be a very tricky job is the message the market has sent in the last six days. Does anyone doubt that the selling of assets over the last few days isn't futures driven? Just look at the breadth of the declines and rises around the world. Thoughts?

Minyan Mark


I agree in lockstep young man. This is at the root of our oft-discussed "asset class deflation vs. dollar devaluation discussion." While there will certainly be relative winners, global asset classes - from China to Commodities to US equities to Brazil to Schnitzel - are reliant on continued liquidity. And it may not be that easy. If money is injected but not spent (i.e. the velocity of money slows), it won't have the same desired effect as it once did. I don't know if we're there yet but it should certainly be on our collective radar.


Is there a point where Goldenstar (GSS) breaks out and you buy it at higher prices…like say $4?

Minyan John


Well, as we don't "do" advice in the 'Ville, I can't comment on when you should buy it. What I can say is that a move through $4 would be acne that dates back to early 2005.
In the interest of full disclosure, my cost basis is closer to $3 and I bought dips during the tape meltage. I've yet to sell it as I prefer to buy some puts in other names (sectors) and play the alpha bit. Thanks, and good luck cookie.


I'm a relatively new Minyan and so far have found it to be very informative, educational, and downright funny. However, it's your frequent subtle references to the good 'ol Grateful Dead that really speak to me. Keep 'em coming, I'm listening!

Thanks for everything.
Minyan Joe from Montana


I'm gonna tell you how it's gonna be, you're gonna be a Minyan, see? Thanks for the snaps-I'm grateful for your vibes and hoping to catch one of the Bobby shows at the Beacon over the next few days.


You said that what scares you is "the way mentally ill people slip through the cracks of our healthcare system."

What scares me is the transfer of vernaculars from one aspect of society to another, as if they were more than intended empty jargon. "Slip through" "the cracks," and health care "system." We do not presently have a system to address mental health. What organization exists has broad chasms, not "cracks," at the bottom of which are huge numbers of people, who did not slip, but were pushed.

What we have are two separate but "equal" approaches to healthcare, one fully integrated and answerable to market forces and medical ethics, addressing our physical health; the other, fully segregated from society, answerable to no market forces, only to political structure, observing no medical ethic, addressing mental illness rather than health, and more akin to corrections than healthcare. One can escape from a mental "hospital," though not from a maternity ward.

That we tolerate it illustrates the success of politicians and the failure of the education of people in mental health professions. It also illustrates the failure of journalism to address the issue, the same failure it exhibited for other civil rights issues - remaining a proponent of what was until society itself changed direction, and journalism had to follow.

Minyan Harold, Former Consulting Editor--Psychiatric Rehabilitation Journal


Thanks for the views and opinions. I may not have gotten my point across in the most succinct manner but I think we agree that there are massive flaws in how "society" deals with mental illness. If someone has AIDS or Cancer, they get medical attention and sympathy (as they most certainly should). When someone is mentally ill, as my father is, they are shunned, called names and otherwise avoided. That's why most end up homeless, self-medicating their way to a very lonely existence.

Hi Toddo,

I just kinda realized that the story about your dad is four years old. I hope he's doing well. When you get on this subject it's all I can do to not send you a four page letter of my own ramblings on the subject. Suffice it to say I use your quote too often, "Mental illness is the most misunderstood and misdiagnosed illness today."

Minyan Mark

Thanks brother. He's puttin' along, recovering from a near-fatal infection over the New Year. He's clean, however, and appreciating every moment he has on this earth. Looking into the abyss tends to lend perspective.


I glimmered over the Ruby info during the 'uplift' yesterday and have to say that is good stuff you ALL do for kids and learning, mentoring, etc. I may have to stroll by the Ville with a few coins for that effort when in NYC later this month. Check out I was a seed investor. Teaching K-8th how to integrate tech into their daily life.

Minyan Fritz

Thanks for this. Of all we've done as a community, the commitment to "giving back" is by far what I'm most proud of. And please know that you don't have to be in NYC to support the RP Foundation. You can simply click on the site and do your part in helping to teach the leaders, thinkers and dreamers of tomorrow. Many thanks and a Ruby wink. ;-)

Toddo -

Looking back to last August and September, it was absolutely clear (in retrospect) that the market had changed character (to buy dips) as we proceeded to melt up. Bernie Schaeffer has written about the high level of SPY, QQQQ and IWM puts placing a floor under the market.

In early October I sold a large chunk of exposure and failed to respect the character change missing out on a large part of the big 4th quarter move. Are we seeing a change of character? Will we look back at S&P 1400 as a great place to sell? Will the whole world look to sell strength in the coming days and weeks?

Minyan Pete

Minyan Pete,

My brother, if I knew the way, I would take you home. As I don't "know" (and anyone who says they do is fibbing), I will continue to defer to my trading tells (breadth, financials, emerging markets, dollar).

As it stands and as I sit, I'm relatively balanced with some good gamma (added after yesterday's 25% off sale). I would "think" that there's more meat to the downside bone as folks are still conditioned to buy dips and the mainstream media is still somewhat sanguine.

I may be wrong and if I am, I'll be thankful that I trade with discipline as the mechanics of the swing outweigh the results of the at-bat.

Hey Toddo,

I wanted to know if you could tell me why the bank action is so important--what does it mean in the context of this market? You've been discussing Goldman as "the tell" for a long time, and yesterday you seem also focused on Citi, so I just wanted to see if you had a couple of thoughts.

Minyan David

Sure thang. I watch Goldman as the big dog in the financial space (a title once held by Citi) and, as the financials are the most important sector in the marketplace, it naturally sits in the hot seat. Why do the financials matter so much? They're the highest weighting in the S&P and they're an encapsulation of the finance based economy, be it the carry trade (liquidity) or structural smoke (sub-prime to hedge funds). With hundreds of trillions of dollars in derivatives outstanding, they're also the first domino in any potential contagion scenario.

Hey Toddo,

I'm fairly new to Minyanville and love all the commentary. Your writing style keeps me in touch and gigglin' most of the day. I love all the Dead references; if you're looking for copy of a show you don't have, let me know and I'll burn a freebie and drop it in the mail. Be specific about dates and I'll let you know. Keep up the great work.

Grateful Minyan Dave

Thanks brother! Anything with "Shining Star" on it would be absolutely fantastic!


It would be no surprise to me if the institutions and/or the alleged "Plunge Protection Team" were in there yesterday providing support for the equity markets to keep panic from developing into something they can't afford. However, given the compression that has built as levered players chased returns within a complex that last exhibited volatility... when was volatility last seen? Wouldn't it be a good odds-on bet that the levered players in particular are going to be forced to re-price risk within their portfolios given the recent blindside whack? Isn't that very likely to bring some pressure to bear in the days and weeks ahead as risk is reassessed and rebalanced? Interested in your thoughts and appreciate the community as always.

Minyan Jeff

Great point. I think risk is being re-priced as the market decompresses. What does that mean? Players-particularly hedge funds-have upped the size of their bets these last few years and used leverage to offset the low levels of volatility. With the VXO effectively doubling (recent trough to peak), alotta those players had bigger swings than a Hedonism vacation. My sense is that we're gonna hear a lot of horror stories in the weeks ahead as funds go belly up. That, as much as anything, raises the potential for late day pukes as a function of forced sales and liquidation.

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Position in GSS, financials

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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