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The Spin Sin

By

You need some serious therapy Toddo!

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Good morning and welcome back to the love bug. The group hug continued yesterday as Hoofy spun the bottle and gripped the throttle. After three long years of crimson tears, the bulls are finally getting theirs. The bears are sore, that's for sure, and each new day has been a chore. Will young Boo's fur continue to burn or will the ursine uglies soon return? It's freaky Friday in Minyanville and the table is set, so let's end the week with the best session yet!

With disciplined and objective eyes, an assimilation of our primary trading metrics yields a more constructive posture. It's hard to argue with widespread acne, improved fundies, Elmer Cousteau and manic sentiment. We've addressed the bear spin on each of these metrics (false breakout, discounted earnings, drought potential and mass complacency) and in the innards of my guts, I don't believe the upside hype. Regardless, the short side has become decidedly dicier and we must respect (not defer to) dynamic developments.

I offer that conventional wisdom with a grain of salt as I force myself to stay open-minded. Indeed, if you'd like to read more of the (longer term) bull case, I encourage you to peruse the recent musings of our own Snoop "Hair" Dwyer. You always wanna see both sides of every trade and Tony makes a pretty compelling case. Still, I wouldn't be me if I wasn't completely honest with the Minyans and, right or wrong, you'll always get it straight.

Lemme preface the following rant by saying that I see what you see. When bad news is discounted (Goldman Sachs (GS:NYSE) and good news is rewarded (Intel (INTC:NASD), it speaks volumes of the underlying tenor. That's been going on since days before the war with Iraq began (not a coincidence) and, with next year's election looming, it shows little sign of abatement. My only question, and I ask this humbly, is how long can they keep the balls in the air?

Last night, as I watched a replay of Dubya's speech, , the words "Jobs" and "Growth" were subtly throbbing and pulsing behind our President as he spoke. Far be it from me to suggest that there was any subliminal intent, but the spin irked me for some reason. It's been my contention that the Fed is attempting to "buy time" by flooding the system with liquidity, spending like there's no tomorrow and squeezing the individual investor back into the market (via lower money market rates). They're breaking out the big guns so watch your back, Boo-- it's bear season in the city of critters.

Some will argue that, by definition, a central bank is obligated to act in such a manner. My concern, however, is that they're mortgaging our future (pun intended) for a more immediate gratification. The hallmark of the late nineties was the excessive lifestyle that the bubble afforded and, after the pin prick, the sheer magnitude of wealth deletion is staggering. Is it realistic--is it natural?--that we're "three and out" of that digestion process?

I know these views won't jibe with some of my fellow Minyans but please remember that the intent isn't to project my thought process. Most media outlets (and television "pundits") will tell you what you want to hear as they, like you, have a vested interest in a better economic state. I simply want to present the other side of the argument which, as you know, is in the severe minority. When push comes to shove, you've gotta live with your investment choices and, as we're apt to say in Minyanville, you always wanna see both sides of every trade.

Good luck today.


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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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