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Random Thoughts: Paulson's 'Energized' Testimony


Stay humble or the market will do it for you...


Editor's Note: As Toddo was dragged out of MVHQ for an important out of office meeting by his pant legs, clinging to his eighth screen, he yelled out his last request: To recap his morning buzzes as a Random Thoughts article in the hope that Minyans everywhere would benefit from his insight. So, without further ado, here they are.

  • The following Buzz occured between 9:00 AM and 10:00 AM...

    Gate Sniffage!
    9:38 AM

    • After trading seven ways till Sunday (and seventeen ways since last Sunday), I enter the center with a spate of short puts and defined risk above BKX 111.50.

    • In the interest of forthright communication and real-time education, I will share that I pared some of the puts (that I tossed on after yesterday's contra-hour Snapper). Net/net, I added downside exposure on the day and while I sorta figured I would have better prices this morning (to remove the excess trading inventory), the mechanics of the swing are more important than the results of the at-bat. That's the nuts and guts of why I'm tellin ya'.

    • In all due respect--and I'm all about respect--I gotta ask the question as it's the central tenet of our current credibility conundrum. Hank Paulson assured us this morning that we have the benefit of a "strong global economy" and a "healthy financial system"--and I understand why he has to do this--but, as he also assured us that sub-prime was contained a few short months ago, how long will his words carry weight?

    • And what exactly does "Paulson has 're-energized' working group on financial markets" mean? Is the Plunge Protection Team wizardry officially out from behind the curtain?

    • The semis trade dry out of the gate. The homies and banks, not so much.

    • An off-site meeting? Today? With this volatility? In the pouring rain? Only for our friends from TD-Ameritrade.

  • The following Buzz occured between 10:00 AM and 11:00 AM...

    Cup O' Buzz
    10:40 AM

    • Y'all know what I've traded thus far today? Not much. I've made my bed--which includes downside S&P exposure, a stop above BKX 111.50 and lotsa dry powder--and I'm laying in it.

    • Given how hard it's pouring in Gotham, gimme a pint of Ben & Jerry's and some Young Frankenstein and I'll be cooler than the other side of the pillow. Not in a "that trade is a given and I'm complacent" sorta way, just from a "I'm gonna be out-of-pocket this afternoon and I'm loosening my grip the handlebars" standpoint.

    • All of this is said with a nod to the Trading Gods. If I've learned anything over the years, it's to stay humble or the market will do it for you.

    • Note that Capital One Financial (COF) is higher on the mortgage abscission and guidance cut. I'm not 'sure' what it means but it's more positive, in the abstract, than negative.

    • Also in the "glass half full" camp, please see the action in beta--from BIDU to AAPL to UA to AMZN to EBAY--lest you're wondering where the money from the financials is rotating.

    • I'm getting that look--you know, that look--from President Fish that it's time to jet. I'll tell ya, these media guys... You're in good hands---with Allstate and Minyanville--so lemme jump and juggle and manage this struggle. Fare ye well, Minyans, and keep that right hand up.

  • Have great afternoon Minyans, and let's put some jingle in those jeans!


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