Freaky Friday Potpourri: Numbers Adding Up to Stagflation
What if this really is the early innings of a multi-year debt unwind?
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…
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.
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 firstname.lastname@example.org.
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