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Random Thoughts

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What happens if Breaking News turns into Broken News?

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  • Mini-Minyan Mailbag: Kim Etheredge was quoted yesterday as saying "Terrell has 25 million reasons to be alive." I think that about sums up our society's view toward mental health. Talk about misunderstanding a disease -- ask people who are depressed or suffer from other mental illnesses if they would give up all their money to be cured. Peace, Minyan Jim

    MJ - I couldn't agree more. I've long said that mental illness is the most misunderstood affliction in society. It's easy to say "this guy is nuts" or "she's crazy" versus taking the time to unravel the imbalances. That's why I often take the time to buy the homeless a meal--most folks on the street are case studies that have fallen through the cracks. I, unfortunately, have some experience in these matters with my father and others I've known through the years.

  • What happens if Breaking News turns into Broken News? I haven't heard anyone discuss an end-of-quarter slaughter and, while I'm not saying it happens, it's the least discussed scenario from where I sit.

  • I made a round of sales in my drillers on the morning pop. I've still got some (Weatherford) but I'm happy to take an acorn when I can find it.

  • One of the smarter hedgies I know is bangin' his keppe on the wall with regard to the homies. He asked me my take. My ver batim response was "HGX leading indicator, real estate lagging indicator as a function of disposable income vs. negative savings rate. Builders already discounting significant slowdown--not yet something worse."

  • Hey banana hands--pass the ball!

  • Poppin', stoppin', hoppin' like a rabbit. Note the dollar (DXY +25 bips) as it's creepin' while ya sleepin'.

  • I've long thought that the friction between opinions is where education lies. As such, we'll be posting two columns in the next few days. One on the NAHB vs. S&P (with a 12-month lag) and the other on Succo's short interest Buzz, which has generated quite the stir.

  • "We stay defensive even if unpopular. I met with many big time real estate guys last night here in Central Florida and heard some disturbing stories from $5,000,000 spec houses sitting empty to multi billion dollar real estate syndicates near collapse to a major REIT walking away from a $500,000 deposit on a shopping center." Bennet Sedacca on today's Buzz.

  • Sometimes the ability not to trade is as important as trading ability. I say that as I watch General Motors, which is a bank in drag.

  • Hear Ye! Hear Ye! Hear Ye! We're planning to hold our first MIM-CCA on Friday, December 1st in NYC. Minyans in Manhattan will feature an afternoon of Buzz & Banter, moderated by Minyan Michael Santoli, and featuring Jeff Saut, Steve Galbraith, Steve Shobin, Greg Weldon, Stephanie Pomboy, Bennet Sedacca , John Succo , Scott Reamer and yours truly as we cast an eye towards 2007:The Year Ahead. That evening, we'll be honoring Trent Tucker, formerly of the NY Knicks, with the first annual "Ruby" at the Critters Choice Awards. Details to follow so please, Minyans, save the date--it's for the kids!

  • Tell Check? Breadth is even Steven, and there's nary a sector that's 50 bips from the flat line.

  • Is it me or shouldn't folks be in an altogether better mood (read: less societal acrimony) with the "market" at all-time highs?

  • Snoop Tony Dwyer of FTN Midwest Securities--who just told us that he's as excited for new highs as he is for parting his hair--shares his fare on the state of the tape:
    • The equity market showed uncharacteristic strength in September, which historically has been the weakest month of the year for the S&P 500.
    • For only the 19th time since 1957 and 8th time since 1982, the S&P 500 has made a new calendar year high in September.
    • Such strength suggests a 3% correction at some point in October, followed by significant gains through year-end.

His conclusion? The recent market action and historical precedent continue to support our bullish fundamental "mid-cycle" thesis. Despite the possibility of a near-term pause in the upside, the current environment of moderate inflation, lower long-term interest rates, slower economic growth should allow for double digit equity market returns over the coming year as continued earnings gains and slight valuation expansion push stocks higher. Our 2006 and 2007 S&P 500 targets remain 1440 and 1540, respectively.


R.P.

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