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Minyan Mailbag - Optimism


There are a lot more bears floating around this week!


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.


I share your longer term bearish thoughts.

However, I would truly like to hear the longer term bull case articulated. There are many smart people who discuss our economy's / country's problems. I really don't ever hear the intellectual bull case for the longer term.

What do you feel that "Elmer" is hoping for in the best case scenario and how do you feel that the longer term outcome is positive assuming the absolute best case occurs?

It seems to me that all outcomes of our current mess are bad in the longer run. I would sure like to hear otherwise. Maybe from Snoop Tone?


Minyan Jim

Minyan Jim,

I was racking my brain trying to "put on a happy face" for my Crested Butte presentation. Unfortunately, I just don't see (or truly believe) that there IS a way out. If there was, I'm certain that Elmer would have pied his pipers through the looking glass already. And while there are smart folks discussing our problems--Buffett, Soros, Gross (all guitar signees)--conventional sentiment and volatility indicators dictate that they're in the minority (although the weekly sentiment figures (released today) indicate an outsized drop in bulls/pop in bears). Still, the lopsided belief in the inevitable sunset (psychology bubble) is one of my biggest concerns.

The way I see it, there are a few options for our bespectacled friend and none of them lead to long term prosperity. He can continue to keep the Minx on life support by injecting liquidity, but that will lead to a continued decline in the U.S. dollar (-27% since the beginning of 2002) and, in my view, increasingly evident stagflation. Or, he can push the Minx into the middle of the ring without protection. That may save the dollar (for now), but once the liquidity crutch is kicked aside, it'll be a free-for-all and a bloody mess.

What do I think Elmer is "hoping" for? The same thing everyone at the Fed is hoping for--that they can buy enough time for the economy to engage in a self-sustaining recovery. They've been doing everything they can to prod this dog and when it hasn't worked, they've wagged their tongues and promised us that it already has. Take me at my word, I would love nothing better than for us to be on the verge of a massive bull market as it would benefit my businesses in many different ways. But it's not gonna occur three years after the biggest bubble in history and it certainly won't happen when everyone is looking for it.

The "longer term" bull case? Easy money, easier money and finally, easiest money. It's a Band-Aid on a broken bone but it can certainly mask the contusion for a while. We've seen some pretty amazing financial evolvements in our lifetime and there isn't much that would surprise me anymore. A more likely scenario, however, is a haphazard tape that makes life difficult for traders and investors alike. That is MY definition of a bear market and I remain of the opinion that we're in the early innings of a very long game.

Thanks kindly and, as always, I hope this finds you well.



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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