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Randoms: The Roadmap Through Ruin


The destination we arrive at pales in comparison to the path we take to get there.


Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also Joy and Pain. Sunshine or Rain?

Gate Sniffage! - 9:48 am

Chewing through Pepe's view, it reinforces my vibe that a binary event looms. On one side, we've got the natural path lower--perhaps to S&P 600 thisquick---and on the other, we've got artificial sweetener in the form of game-changing government regulation.

We pride ourselves on seeing both sides in the 'Ville and I'm doing just that.

Put a gun to my head, however, and I'm in the "kick save" camp. We're talking about total system meltdown here--General Electric (GE), General Motors (GM), General Malaise--and they'll exhaust every conceivable option to avoid that. It's an invisible catalyst, I know, but my very best guess is that it's creeping closer.

How am I playing this? In a word, carefully. I've taken down a chunk of FAS as a speculative upside bet with defined risk (average cost, as it stands, is $3.37) and I'll scan for further opportunities when I'm done scribing (Minyans first). I'm only playing with what I can afford to lose so keep that in mind (none of what I do is advice to do the same).

Lemme be very clear on a critical point--what we're seeing (or what we'll see) is more desperation, more hope, more masking the symptoms rather than allowing for the natural progression of time and price that is the very definition of free markets.

As the destination we arrive at pales in comparison to the path that we take to get there, however, I'll continue to share my thoughts along the journey, one step at a time.

Watch GE as a tell, and retail as potential vehicles (on the back of Wal-Mart (WMT)). And keep it in perspective, friends, for it could be worse.

Joy or Pain Indeed! - 10:06 am

Keep it goin' now? A'ight, we're gonna get old school on y'all.

I just bought some General Electric (GE) calls. Not because the CFO painted the tape--it's a vehicle, pure and simple, and a defined risk one at that.

I simply sense that, given the historic significance of this American icon, we'll see several defenses (much like we did in Citigroup (C)) and, should mark-to-market rules be "relaxed," this could be a $12 stock in a blink.

Again--NOT advice and quite risky, but "Danger" is my middle name.

You've Got Buyers Living in Apartment 2R! - 10:49 am

  • Fazbie (also known as the Financial Accounting Standards Board) is meeting today and the outcome should set the table for the March 12 House Banking Committee meeting. Thanks Minyan Branden for putting this on our radar (gotta love the 'Ville!).

  • How do you earn respect? Not by insisting on secrecy when taxpayers money is at stake.

  • Kaaaaaaaaaaaa-reeeeeeeeen!

  • Keep Russia on ye radar please. Economic hardship is historically a precursor to geopolitical conflict.

  • Tea leaves? Breadth is onion ugly (7:1 negative), the BKX is down 7% (also known as a buck and a half), the dollar is higher (asset class deflation) and we're seeing N's over S's (Amazon (AMZN), Baidu (BIDU) and the semis act dry).

  • I'm being Ginger--not Mary Ann--with my purchases as there is whoosh risk. I am, however, a buyer into weakness with S&P 600 circled on the spot.

  • I've long been in the "prolonged period of socioeconomic malaise" camp--before it was in vogue to be so--and understand that is no garden variety one and done recession. It'll take years--years--I'm simply trying to focus on picking up some shekels along the journey.

  • If you haven't seen the Daily Show's take on the state of financial media, this is a must see. I think it's time they meet the Minyans.

  • As always, I hope this finds you swell. Pork chops and apple sauce. Swell.


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Position in FAS, GE
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