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The Spin Sin


You need some serious therapy Toddo!


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.

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