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Random Thoughts: Storm Clouds?


Things look gloomy on the Street.

Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Conversation With Mr. Practical.

So, what kinda day is it gonna be?

I'll tell ya Minyans, this wicked world of ours gets curiouser by the day. If ever there was a time for this country--er, that country--to come together with cool heads and viable solutions, this is-er, was--it. Talk about politicians throwing stones. Yeezers--come on now! This is life, this is our house!

It's a good thing nothing else is going on, right? Sigh... well, it is Friday, so we've got that going for us. Before we get there, we've gotta go through here and it's with that in mind that I share the grind.

  • NYC Weather: 65 F, T-Storms, 100% chance of precipitation.

  • What would Mr. Practical do in a situation like this? You'll know soon enough as we huddled up for some scuttlebutt.

  • Sports Illustrated used to have "This Week's Sign that the Apocalypse is Upon Us." If they followed the markets, they would likely feature our Treasury Secretary literally getting down on one knee begging for help

  • I was walking in midtown with a friend and I passed the same corner I commented on three years ago. You know, the one with Citigroup (C), Wachovia (WB), Bank America (BAC), JP Morgan Chase (JPM), Sovereign Bank (SOV) and Washington Mutual (WM) branches on one block (seriously). As I walked past the gold WaMu plaque, I kissed my hand and tapped it. RIP, killer whale.

  • There is some seriously strange energy in New York City. I could swear I saw some flappers last night! (Flapper? I don't even know 'er!)

  • Aw come on now--never lose your sense of humor Francis. Not now, not ever.

  • Let the markets do what the markets are gonna do. That process of price discovery is bigger than me and it's bigger than you.

  • For me, that means capital preservation, debt reduction (I have no debt, thanks to my grandfather's sage words) and financial intelligence (thank YOU Minyanville).

  • The entirely more important question is whether we need to shift the lens of capital preservation to capital conversion. In other words, IF we hyperinflate, we might as well save Monopoly money.

  • Neidermeyer? Dead. Zed? Dead, baby. Capitalism?

  • Remember way back when--on September 9th--when we asked if The Big One was coming? We discussed the laws of diminishing ammunition, offering that the last bullet would be pointed inward. Indeed.

    (Image taken from

Here is a great point from our wise Minyan Peter. It was posted on the Buzz at 8:29 am:

Monday Matters

With headlines like "Bailout Talks Implode" and "Wamu Fails" this morning, it may be very tempting to step into a bunker.

Yet, while I remain negative longer term, I would remind everyone that Monday Matters. As the end of the third quarter, Monday is the date on which all capital ratios will be calculated for banks. And if I were Hank and Ben, I would be looking for a rabbit or two to pull out before then. (I also have no doubt that despite the posturing, there will be a bill signed before the sun goes down on the month of September.)

Finally, I would highlight that while mid-week bank seizures are highly unusual, Monday also mattered with regards to Washington Mutual (WM). By seizing the bank last night, the regulators enabled JPMorgan (JPM) to raise $8 billion in common stock prior to quarter end, and more importantly by getting the deal done now it kept Wamu off the quarterly troubled asset report for the FDIC.

(Peter has positions in SPY options and JPM debt obligations)


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