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Random Thoughts

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The elements of causation surround us daily and the chasm between perception and reality will one day close.

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  • Go 'Bama! Rollover tide?

  • The dollar (+35 bips) is quickly becoming the tell of all tells, eh?

  • I was talking to a fellow Minyan this morning who "needed to chat." When we got on the phone, he was borderline depressed and shared the following anecdote:

    Toddo, I don't want to panic because I realize this is becoming consensus, but last night I spoke with a CEO of a tech. company who told me that in the last two weeks, two management level employees who make around $70-80k came to him asking for advances. They can't afford their mortgages due to ARMS adjusting up. They bought the homes with nothing down. If this becomes a nationwide situation it could develop into a crisis. Again, I realize that I'm not alone in bringing this up but it just floored me as to the consequences that could be right in front of our eyes. I'm not sure if I want this posted, but I had to share it with someone.

    I told him, as I often tell you, that the Minyanville mission is to provoke (not shape) thought and prepare ye faithful for what's to come. I also opined that it's gonna get a lot tougher in the years ahead and we'll need to dig deep as we find our way. I told him that the odds of a depression---yes, with a "D"--are higher than most folks in the mainstream would like to believe. That certainly doesn't mean it will happen but--let's be honest--it's possible if we extrapolate "excess breeds excess" to the other side of the bubble. A lot will depend on the dollar, interest rates, psychology, debt dependency, structural underpinnings and societal acrimony. And while I know this isn't something that most people want to hear, I would rather paint both sides of the picture and let you assign your own probabilities. This isn't a trade for today, clearly, and I will ask that you don't shoot the messenger. The elements of causation surround us daily and the chasm between perception and reality will one day close. We can only hope that reality improves before perception wakes up.

  • "Keep an eye on SPX 1235. That violates this 1240 "area" of support on a 5x3 PnF chart." Pepe "I can't believe I didn't get J. Crew friends and family stock" Depew on today's Buzz.

  • XAU 134ish is the nearest hump for the metal set. Heck, it's putting the jitters in this bug!

  • We held the supplemental MVHQ softball draft yesterday for the rubber match at MIM3. I'm not allowed to disclose who's on Hoofy's Heroes and who's on Boo's Bandits but suffice to say that Chachi and Nick may need to stay in NYC for pressing "business matters."

  • HGX 202 is acne support for the homebuilders, we know, but while I played with Snapper on past tries (and made a few shekels), I know that each successive test of support chews through a layer of demand. That doesn't mean that it won't work, it simply means that the probabilities that it will are somewhat reduced.

  • "Duuuude! My dad's a television repairman and has an awesome set of tools. He can fix it!"

  • Evidently, alotta folks at JP Morgan have walked up to Kim Dispigna today and screamed "How ya makin' Letter I?" That's good--salespeople should know what it's like to get "checked" for markets all day!

  • Snoop Tony "I'll see YOU at MIM3" Dwyer weighs in with some mid-year vibes:

    Our favorable view of the equity market is based on:
    • Moderate core inflation
    • Interest rates nearing peak levels
    • A soft landing in the domestic economy
    • Earnings remaining positive and underestimated
    • Attractive valuation levels

      In our view, the current risk to our favorable view of equities is not inflation, interest rates, earnings or the many other macroeconomic data- the real risk is that no one cares and potential buyers (other than corporations themselves) remain on the sidelines.

  • BKX 104ish is the 200-day and could offer some support for the piggies but Boo seems to have the con under BKX 108.

  • Heads up Minyans---it could be worse. (gulp!)


  • R.P.
Positions in energy, metals, financials
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