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Freaky Friday Potpourri: Numbers Adding Up to Stagflation

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What if this really is the early innings of a multi-year debt unwind?

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Caught up in a whirlwind can't catch my breath
Knee deep in hot water broke out in a cold sweat
Can't catch a turtle in this rat race
Feels like I'm losin' time at breakneck pace


(Stevie Ray Vaughan)

Good morning and welcome back to the flickering pack. We power up this frisky pup to find an internal Citigroup SIV rescue plan, higher consumer prices, a black mark on the American pastime, a looming Nor'easter and ten more trading days before we tie the bow on one of the more interesting years in history.

So, what to do? Road trip? Toga Party? Crank up Stevie Ray? All in good time, I suppose, but before we sniff out a smile, we've got some serious (say it with a straight face) work to do. So in that vein, Minyans, let's dig in and end this freaky weak with some jingle in our jeans.

Some thoughts, in no particular order:

· Two days after the biggest coordinated central bank agenda since 9/11/01, money markets failed to respond to the effort. The euro interbank offered rate banks charge each other for three-month loans stayed near a seven-year high, according to Bloomberg, falling 1 basis point to 4.94 percent (which is 94 basis points above the ECB benchmark interest rate, the highest since 1999).

· What's that mean in Minyanspeak? "The market clearly doesn't believe that the central banks can do anything about this crisis," said Nathalie Fillet, senior interest-rate strategist at BNP Paribas SA, "This is not going to be a magical solution to the problem."

· So, the CPI (and PPI) are higher. We've been talking about inflation in things we need (to feed, energize, educate and insure) the world with simultaneous deflation in things we want (such as cell phones, lap tops and plasmas). Toss in some slower growth (check) and unemployment (not yet, at least according to the birth-death model) and we've got our stagflation.

· Well, I'll stay this about Trader Vik: He didn't waste anytime putting his thumbprint on Citigroup (C). Keep close tabs on this stock to see how it reacts to the absorption of $58 bln of debt on his balance sheets.

· I sure hope Angelo Mozilo from Countrywide is gonna watch FOX Business News Happy Hour today at 5:00 EST.

· As far as Todd-Lot Trading Inc., after selling my S&P calls into the Wednesday's opening and buying HBC puts, I took those puts off into yesterday's mess and nibbled anew on some Pulte Home calls (with defined risk). Something tells me I'm about to have a prom night déjà vu (when I got stopped before enjoying my position) but alas, setting stops removes emotion.


Answers I Really Wanna Know…


  • Are Aunt Fannie (FNM) and Uncle Freddie (FRE) new-fangled treading tells?

  • Salad for lunch? Again? Seriously? What does a man have to do for a Johnny Rockets cheeseburger around here?

  • Is this the real life? Is this just fantasy?

  • GULP, the BKX is flirting with 2002 levels again?

  • Are you defining your risk?

  • And I mean, tighter than a snare drum?

  • You know what's at stake here, right?

  • Is it a coincidence that America's pastime is coming under fire at the same time as American capitalism is?

  • Do you really think that there isn't an invisible hand?

  • How many more hits did Tupak and Biggie have in 'em?

  • What if this really is the early innings of a multi-year debt unwind?

  • Are you prepared?

  • Not from a trading standpoint, but through a capital preservation, debt reducation and financial literacy standpoint?

  • Does anyone else get the sense that market players are fried, tired and ready for the holiday stretch?

And finally, following Yesterday's Duran Duran tribute, I sorta had to share this STYX fix for our Freaky Friday…


Hey Babe, how's it hanging? Everything is Cool on my end, although it would be Paradise if my Crystal Ball would only Show Me The Way.

On the one hand, Hoofy seems to be saying
Don't Let it End, Hank, as we Come Sail Away towards the The Best of Times.

Across town, Boo believes the
Blue Collar Man is on Borrowed Time and flying Snowblind. Hey, would you expect anything less from a Renegade bear?

Hey, maybe I've got
Too Much Time on My Hands, Lady, and we know that Nothing Ever Goes as Planned. I just wanna make sure you're not Fooling Yourself as we find our way.

Domo Arigato, Minyans, and fare ye well.

R.P.

No positions in stocks mentioned.

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 todd@minyanville.com.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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