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Random Thoughts


If we see another bubble, I'm gonna take a bath!

  • Horror Show!

  • In a reactively rational world, the notion that the Fed is in the late innings of their tightening cycle is perceived (equity) positive if the screens are green ("easier" money ahead) and negatively when the crimson switch flips (economy isn't finding traction). While my take on the situation isn't linear (I think debt and legitimated growth have been confused), the bears are bummed that the entire game hasn't been rained out yet.

  • You always wanna see the "other side" of your bet and Boo would be wise to read through the Iron Horse's observations.

  • I would expect to see some profit taking/posturing in front of tomorrow's orange crop report.

  • I think I found the Fed's Kool-Aid!

  • Congrats to a gritty and disciplined Spurs team on reaching the NBA finals again. Minyan Steve Kerr has to be smiling!

  • Liquidity on the street is increasingly being "laid off" on counter-parties as the sell-side (and floor) steps aside on capital commitment.

  • In chart land, the DJIA and XBD remain poised-but not powered-as they wade through some reverse dandruff (DJIA 10,600 is a "spread triple top breakout"). For the four letter freaks, NASDAQ 2100 resistance is in the bull's eye. IF (big if) this rally is to flummox Sir Isaac Newton, I would "think" it would have to be of the "S's over N's" variety. They're extended, Shirley, but keep in mind that Google (GOOG) was extended at $230 as well (just a lil' perspective).

  • "Breadth in Technology has reached a level so overbought that it is typically considered bullish. The current breadth readings are on par with the breadth oscillations seen in the fall of 1999 that marked the parabolic advance in the index and a doubling of the index's value, and also the reading seen in late 2002 that officially ended the decline (though we tested in early 2003). The market is so overbought that we consider it an impressive sign of strength, not a deficiency or weakness" -- Lehman's Jeff DeGraaf

  • A look at the pffft! with Paul Kasriel.

  • We power up the Thursday pup to find the dollar squirming a bit under DXY 88. If memory serves, traders were all over this level last August and, as past support is future resistance, it makes sense that it'll offer cause for pause on the return flight (particularly after an 8% rally off the March low). The EU unwind is clearly lending to a flight to familiarity and has buoyed the dollar despite hints (jawbones) that we're in "the late innings of the rate cycle." I don't profess to know when the structural crutch abates but my sense is that this is a counter-trend rally in the context of multiyear dollar devaluation.

  • JDSU $50? JDSU $100? JDSU $150?

  • Minyans in the Mountains II is shaping up to be a Minyanfest of the highest magnitude! Remember, the race is on for the free pass so toss your lid in the ring and let's party in Santa Barbara!

  • Rollin' down the street...the homies are edging closer to that all-time high (HGX 520ish).

  • Early eyes find the semis slinking higher. SOX 450ish is where the chips failed last summer and where supply has lived ever since.

  • John Succo touched on the hedonistic vibes of Richard Fisher yesterday after the Dallas Fed Head projected his Cowboy economics. While I'm used to mixed signals from the powers that be-the Fed, the BLS and others-I had to read Dick's statement three times as I simply couldn't believe my eyes.

  • Peering from Dante's Peak.

  • Mini-Minyan Mailbag: "Toddo-- I saw your mention of 400,000 real estate agents vs. 688,000 home sales in California. Thought I would mention an interesting fact. California has an unusual property tax system. Proposition 13 passed many years ago, capped the assessed value and limits an annual increase. This has the implied effect of limiting housing supply as prices rise. Here's how. Say you paid $300,000 for a house 10 years ago in California. That house is likely now worth about $1.2 million. Your real estate taxes are about $3,750 per year. Let's say you want to sell your $1.2 million house and trade up to something a little nicer for $1.5 million. Your property taxes on a $1.5 million house is about $18,000 per year. A quadrupling of the property taxes for only a little nicer house is likely not worth the cost to a homeowner. Therefore they probably decide to stay and do a little remodeling inI think this has had a huge effect on home values in California. Easy credit, restricted supply and booming values contribute to even greater supply restriction. Unless a person is planning on cashing out and moving out of state, a California homeowner feels locked down the higher prices go. Anyway...just a thought. -- Minyan Jim" *Appreciate the eyes as we look for the other side of the trade, MJ.

  • Tiny Bubbles.

  • Speaking of being a good son, husband and father, Jeff Macke's afternoon column literally stopped me in my tracks yesterday. Continued white light to the left coast and the land down under.

  • Get outa Dodge!

  • I-solation. I-I-sol-a-a-tion is making me wait.

  • Wax and Wane? Brazil is up another 1.5%.

  • I was sitting with John last night for an abbreviated Succofest and we took a moment to appreciate the good fortune that we share. It's not about money-that comes and goes and teaches us lessons in the process-but rather the moral and ethical character that defines who we are. As long as we live our lives in a manner consistent with who we hope to be, the probability of "success" increases in kind. That may mean being a good son, husband, father or friend but it's that very perception defines our accomplishments.

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