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Freaky Friday Potpourri: The Eye of the Tiger


Looking for profits in this economic twister.


We've been talking about the perfect storm brewing on the financial horizon for a mighty long time. In fact, when we first started handing umbrellas to ye faithful, most folks still had sunscreen on their nose.

Fast forward two years and 80%. Lehman Brothers? Gone. Fannie Mae (FNM)? Fini. AIG (AIG)? MIA. Merrill, Wachovia, Bear Stearns, Freddie Mac (FRE)... you know the deal.

The government invented fingers as fast as they could to plug the holes in the proverbial dike but their efforts fell short. In the process, unintended consequences continued to manifest as social mood shifted and risk appetites abated.

It started with moral hazard, continued with Martial Law, changed the face of capitalism and forever altered the global socioeconomic landscape.

It's no shocker that the fundamental landscape has softened from Microsoft (MSFT) to Nokia (NOK) to General Electric (GE). And while select companies put on a brave face-Apple (AAPL) and IBM (IBM) come to mind-the universal view is that things are bad and they're getting worse.

While we loudly rang the "socioeconomic malaise entirely more depressing than a recession" bell in August 2006, we understand that the destination we arrive at pales in comparison to the path that we take to get there. Therein lies to trick to my trades and the nuts and guts where I spend my days.

A few days ago, I asked Will The Banking Industry Will Survive? The most obvious answer is "not in an iteration anything close to what it was" but the devils are in the details. As discussed in that column, nationalization, while perhaps warranted in select situations, poses grave risks in terms of motivating human capital to fix the system.

I believe there are potential stopgap solutions, including but not limited to issuing employees equity options at current levels as an incentive to stick around, but make no mistake that there are many moving parts.

My current effort in buying select banks-adding Bank America (BAC), Citigroup (C), Wells Fargo (WFC) this morning (as well as some SSO with a tight trailing stop) is the definition of a pure trade or, in other words, an honest attempt to capture the disconnect between perception and reality.

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Positions in C, BAC, SSO, WFC

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

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.

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