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The Declaration of Interdependence


Is this the market our founding fathers had in mind?

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." --Thomas Jefferson

These are interesting times in the United States of America.

Minyan Peter touched on tender topics yesterday that we've long discussed in Minyanville, those of trust, credibility and faith.

As we monitor the structural, technical and fundamental underpinnings of the financial marketplace, the last metric-psychology-holds the key to the entire equation.

Perception is reality.

Social mood and risk appetites shape financial markets.

It's not what is; it's what's perceived to be.

They're all saying the same thing and we would be wise to keep those axioms on our radar as we the people edge ahead.

In late February and early March when I positioned for a sharp rally (and yes, I was early), we offered that once it arrived, there would be all sorts of affirmation that it was the real deal. It seemed far-fetched at the time and paradoxically, that's likely why it worked so well (and continues to work, for that matter).

Fast-forward 38% in the S&P and folks are chasing reward in lieu of risk management. Why? Because the tape is higher and if the market is the world's biggest thermometer, things must be better.

That's flawed perspective in my view and sets the stage for a vicious disappointment (note: there is an alternative scenario, as discussed, if the dollar meaningfully breaks).

I see the price action. Heck, I live the price action and map my thoughts in real-time for all to see. If I've learned anything throughout my career, it's that the market is never wrong and we're simply pawns in the greater game. I've also come to understand that the friction between perception and reality is where profitability resides.

We can debate the "what, how and why" until we're blue in the face but time and price are ultimate arbiters of variant financial views. I offer that an eye cast towards a growing chasm, with Wall Street and capitalism on one side and Washington, purportedly on behalf of Main Street, on the other.

We've recently witnessed vilification of money managers who didn't let their investors-who they have a fiduciary responsibility to-fall on their swords for the "better good." Whether it's our president calling out or the judicial branch releasing names of dissident Chrysler bondholders, failure to follow the pied piper party line has hung them out to dry.

It's not dissimilar to the spring of 2003, when one was unpatriotic if they weren't bullish on and by extension financial assets. It is, in some ways, the polar opposite of what our founding fathers had in mind.

The net result of this stealth revolt aren't simply sacrificial lambs in the court of public opinion but blurred lines between the balance of powers that are the hallmark of this great nation.

I'm not chewing on sour grapes-I'm a big boy and I wake up in the bed I position myself in each day. I'm simply saying that the fundamental foundations of capitalism are seismically shifting and it would be myopic to pretend it doesn't or won't matter.

We saw these seeds begin to sow when they declared Martial Law for the Markets, awoke Back in the U.S.S.A., and Pondered our First Amendment Rights. We warned of unintended consequences at the time and we'll remind you of them again.

I'm trading from the short side with one eye towards S&P 950, the other on potential catalysts and an asterisk that I'm often early on these big picture secular shifts.

This isn't about the next few percent or the color of my bottom line. It's about leaving this land a better place and standing up for the core construct of honesty, trust and respect. To this I would ask if not us, who? And if not now, when?

No positions in stocks mentioned.

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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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