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Just the facts, Man!


The stage was set. It was Wednesday night in New York City and that could only mean one thing. It was time for Succofest, the weekly treat with John Succo that has become a staple of my existence. We've been through a lot together, having met each other on the Morgan Stanley derivative desk in 1991, and our connection delves deeper than the flickering ticks. Our time together is therapy for the soul, a center channel of truth in a complex world of corporatocracy and disinformation.

I've met a lot of smart cookies during my 15 years on the Street but there are few people that I respect more than John. He ran some of the biggest derivative desks on Wall Street and was, in many ways, a pioneer in the development of structured products. While he remains one of the most respected risk managers around, however, the crux of our discussions rarely center on levels or idea generation. We talk about the universe, theology, politics, sports, quantum physics, Entourage and, yes, the specter of invention in the marketplace.

To be clear, the risk/reward of publicly sharing my thoughts on this topic are somewhat skewed. My grandfather taught me that all we have is our name and our word and I take great pride in both. The very last label I want affixed to my skin is that of a conspiracy theorist although I believe that perception should never serve as a censor. Still, I've stopped short of sharing I'm not sure that Princess Diana's death was an accident or that I openly wonder what really happened with TWA flight 800.

I offered in my Ojai speech that the only difference between intervention and manipulation is communication. This is a subtle yet incredibly powerful point as we edge through one of the most interesting junctures in American history. While there have been detailed reports that attempt to uncover a laundry list of back channel deals, I'll honestly offer that I have no clue as to the particular mechanism that may or may not be in place. I'm equally certain, however, that alotta unforeseen strings are tugging at this Minxy marionette.

Succo and I often shake our head at the masterful moxie of our Federal Reserve and the Bureau of Labor Statistics. The newswires are constantly being sprinkled with rhetoric and assurances aimed at crafting the collective psychology and they've achieved their desired result. The widespread acceptance of their stated agenda concerns me as the mindset of the masses builds a perceived immunity to an unavoidable reality. I'm certainly no economist, Mr. Greenspan, but I find it hard to believe that inflation remains "well behaved" with the CRB flirting with all-time highs and crude pushing $65/barrel.

While I can already see eyes rolling throughout Matador City, I share these vibes with benevolent and selfless intentions. Our goal in Minyanville is to provoke (rather than shape) thought and we need to see the other side of the ride. The combination of psychology and credit make for dangerous bubble bedfellows and performance anxiety will be hollow solace if the schvitz hits the fan. Should this dynamic dictate your trading directive today? No shot. But it's food for thought as we edge forward and balance the risk that inevitably waits on the other side of reward.

Good luck today.


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