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Random Thoughts: To Cut or Not to Cut?


Does anyone else remember how much play "zero percent financing" got?


As we shake the sand from our shorts and rub the sleep from our eyes, it's time to chime on the tape sublime. Let's get ready to rumble, Minyans, and let's get ready for some football! Some initial thoughts from the MVHQ front lines:

  • Given the collective hangover after the long weekend, please give the Minx a few hours to ascertain her tone. That doesn't mean our tells are faulty, it just means that we should absorb them with a grain of salt and a shake of pepper.

  • And where to they stand out of the Tuesday gate? Breadth is snazzy (NYSE 5:1), the financials are firm (the banks have lotsa room before resistance (BKX 111.50) or support (BKX 101)) and beta has a bid (YHOO, EBAY, AMZN, GOOG).

  • That's the good news. On the other side of the ride, the homies (CTX, LEN), Retail (HD, LOW), the cyclicals (UTX, BA, HON, AA) and pharma trade punk.

  • Consistent with my vibes from late last week (OK, mid-last week... I took a long weekend), I enter this center with a pared down and digestible spate of S&P puts and I'm looking for levels to add back some out-month downside exposure. Lemme get my bearings and I'll be back.

  • And indeed I did. As we ticked S&P 1486 (from where we broke and the 50-day moving average), I dribbled in an additional snivlet of S&P puts.

  • I'm being Ginger (not Mary Ann) given the tone (banks, semis), tenor (NYSE internals working 9:5) and timing (I like to give myself a few days after a respite) but as it's on the lung, it's on the tongue.

  • Riddle me this: What happens if we tap our debt ceiling (we're a mere $11 billion away) in the context of a credit crunch?

  • I gotta think the University of Michigan Confidence number is gonna be shaken (and stirred) after their loss to Appalachian State.

  • Speaking of humble pie---and as a function of my bet with Minyan Alex Washburn--I must offer a nod to the Huskies after they beat down my Syracuse Orange (I always pay my debts).

  • I'm tellin' ya, Sisyphus had nothing on my post-holiday email!

  • Does anyone else remember how much play "zero percent financing" got? Isn't that the type of immediate gratification, consume now and pay later mindset that got us into trouble in the first place?

  • Minyan Peter, who wrote that fantastic Bird's-Eye View column last week, emailed me this presentation, prepared by the economics team at the Economist, and asked that I share it with ye faithful. Done and done, Pete and Repeat!

And finally, we take a step back from the flickering and bickering ticks for a mindful moment of reflection on Seth Tobias.

Seth, who we've known for many years, was one of the first folks to step up and help with the Minyanville All-Star Guitar that was auctioned off for the Ruby Peck Foundation for Children's Education.

Seth passed away this weekend at the age of 44.

We would like to extend the entire spectrum of Minyanville white light to his family during this tragic time.

May peace be with you.


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