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Sunday Schnitzel


Europe just dipped into the red!


Good morning and welcome back to the yawning. With June dated paper scrapped in a scraper, we ready ourselves for a new minxy caper. "It's hard to believe that this tape flickers slow," said Boo to his crew as they scrambled for dough, "I'm starting to think that the bovine all know that it's not yet time for that crushing bear blow!" Will the bulls strike it rich and take hold of this pitch or get stuck on a glitch and fall into the ditch? The critters are here and they just can't sit still as they ready again to strap into the 'Ville!

The Minx has been eerily quiet of late and it's caused quite the stir at the Birdland Jazz club. Last night, while listening to the sultry sounds of Snapper's sax in the soft summer breeze, the critters gathered for some Sunday schnitzel and to talk tape. The conversation went a bit like this:

Hoofy: Did you guys see that Barron's roundtable over the weekend? If memory serves, I believe the words they used to describe the investment landscape were "Clear skies and plenty of sun." Hey Daisy, grab the Coppertone and lets get a groove on!

Boo: Yeah, even the bears are sanguine into the election. The way they figure it, both parties have a vested interest in keeping voters happy and the stock market is the world's largest thermometer. With Elmer's heavy hand steadying the shoulder of public perception, there's natural support under the tape. Everyone knows it and nobody's worried about it--does that freak anyone else out?

Sammy: Perception is reality, Boo, until reality shocks perception. We have quarter-end edging closer and alotta fund managers need a move--any more--to fatten their return tail. Further, with the meat of the earnings line-up approaching and the Fed on deck, we'll have some grist to mill. The trick, in my mind, is to assign a proper metric weighting as we forge ahead. With all the noise trying to capture investor attention, Carrie may try to steal the scene while we're looking the other way.

Daisy: She's getting more action than Boo!

Boo: Yeah but investors are the ones who are gonna end up getting screwed. That's the sad part.

Hoofy: Dude, you're acting like this is some kinda conspiracy. Fiscal and monetary policy/stimulus has been around as long as the Minx. It's the way of the world and the balancer of extraneous pressures. If you stepped off the grassy knoll you'd realize that 25 basis points is a pimple on an elephants ear in the grand scheme of things. You'd also realize that the market historically does well after the FIRST rate hike.

Sammy: Listen to Hoofy, bro...he brings up some good points. I agree with your big picture bearish bent and side with you on the structural imbalances but absent a geopolitical shock, you're fighting some powerful agendas. Would it really surprise you if oil drifted back to the mid-thirties? What if the Iraqi hand-off (which is a matter of semantics in many ways) is spun positively? If (big if) recent highs don't constrain the beast, you could see some self-fulfilling acne.

Boo: I'm not screaming to bet the ranch short--it's not smart to bet the ranch in any direction--I'm simply asking folks to respect the downside risk. The volatility market is telling us that fear is tickling eight year lows. Think about that--there just aren't alotta players left fighting this beast. Whenever towels have been tossed in the past, it usually means that we're pretty close to a top.

Daisy: Well, Monday should be more about post-expiration manicuring and pre-earnings posturing. We don't get the next set of actionable data points until Goldman (GS:NYSE) and Morgan (MWD:NYSE) double team us on Tuesday so please watch the levels and respect the tells. As Sammy said, there are alotta fund managers trying to squeeze profits from a stone and emotions tend to cloud judgment. Be careful!

The critters sat back and watched the sun set behind the Minyanville hills. The next few weeks could shake free of the recent doldrums and they knew that, regardless of one's posture, profitability begins with strategy. The sounds of Snapper massaged their minds and they wanted to enjoy the moment. For they knew that in a matter of hours, it would once again be time to focus.

Good luck today.

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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

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