Thursdays With Story: Exciting Time in Financial History
Markets today keep us on the edge of our seats...
"It could be worse. It could be raining."
--Igor, Young Frankenstein
It's a dark and dreary morning as we edge into the world's wickedest reality show. Every day in every way, the global markets keep us on the edge of our seats with plot twists and clenched fists. We indeed live in the most exciting time in the history of the financial markets.
It's dangerous, yes, but the spills, chills and thrills rival anything we've ever witnessed. We chewed through some analogs yesterday, comparing this juncture with 1998, 2001 and yes, perhaps even 1929, and the script continues to be written each and every day. It's a movie, no a snapshot, so grab your popcorn and settle in.
With a nod to the clock, I'm going with some straight spew and will share my fare without a care. There's a lot to synthesize so let's get to it.
- Before we get started, I have to ask… what the heck happened to Terence Trent Darby?
- So, the European Central Bank left rates at a six year high as policy-makers focus on the risks of inflation rather than the slowing global growth. They're not entirely wrong-there has been inflation in things we need to energize, educate and feed the world-but the devil they know may pale in comparison to the devil they don't.
- We offered on yesterday's Buzz that the risk to Cisco (CSCO) earnings was to the downside. I didn't play it, of course, but the stock is off 8% after warning that U.S. and overseas customers are becoming "increasingly cautious."
- Social mood and risk appetites. Social mood and risk appetites. Social mood and risk appetites.
- John Chambers Jingleheimer Schmidt isn't known for his forecasting abilities (he was very bullish in 2000 and extremely cautious in 2003).
- That's not really the point, however-it's more about the anecdotal evidence that folks are covering up and spending less.
- Lloyd Dobbler better watch his back. I'm telling ya, a few more sessions with Dimi and he's gonna have bigger problems than losing Diane Court.
- The middle class was squeezed out as a slimming sliver of society accounted for the bulk of spending. If the economy were a stock, one could argue that it is a classic non-conformation (narrowing leadership).
- Warren Buffett says the U.S. dollar is "worthless" if the account deficit persists? You mean, more worthless after the 97% decline we've seen since 1913?
- He's not exactly the guy I want to see on the other side of my trade.
- Don't guess with your money. It's too critical of a juncture. Capital preservation, debt reduction and financial intelligence are key components to any financial future.
- Along those lines, after riding the tide higher and fading the trade lower, I'm long dry powder and short clam chowder. In other words, I've got ammo in my pocket (I'm still happy to see you) and will take shots when advantageous risk-reward presents itself.
- The ability not to trade is sometimes as important as trading ability. That'll lead to lost opps but opportunities are made up easier than losses.
- Britney. Empathy, not acrimony. Leave… the kid…alone.
- Hoofy and Boo take a look at the Hollywood Writer's Strike. I think this is one of the funnier episodes they've done.
- Pep spoke to the disconnect between equities and credit in his always excellent 5 Things. The equity bull case is predicated on the credit markets improving by hook or by crook. If they continue to unwind-which I think is inevitable, albeit not in a straight line-it'll pull Hoofy down kicking and screaming.
- Have a great day and just remember-you're a Melon!
- Where's Waldo? And where's Franklin Raines? As Fannie Mae (FNM) and Freddie Mac (FRE) struggle with reality, the former CEO continues to collect $1,000,000 per year. It must be nice.
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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