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Freaky Friday Potpourri: The Fed's in a Box

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Sometimes the best investments have nothing to do with the market.

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One, cut a hole in the box
Two, put the Fed in a box
Three, then you open the box.


(Justin Timberlake)



While pink may be the new purple, it remains to be seen if "bad is the new good." That theory will be put to the test today as the horrid jobs report from Beeks has yet to spark the "Dude--the FOMC will cut, it's all good!" mindset.

Dollah at your boys yo! The greenback is getting cut this morning, to the tune for 60 bips. That brings the monopoly peg back down to ripcord support at DXY 80. Does this matter? Yeah, in so many different ways that it's tough to capture in a Buzz. Thank goodness for hyperlinks!

I cut my short side S&P exposure in half yesterday, which certainly looks like premature evacuation today.

Am I bumming?

Time for corks on my forks?

Looking pa nub in all the wrong places?

Nah--I mean, I'm not thrilled but at the same time, that discipline has saved me mas coin over the years and the mechanics of the swing are more important than the results of the at-bat.

The following Buzz appeared between 9:00 AM and 10:00 AM

She's got Legs, she knows how to use them…
9:41 AM

We're off to at the races as the Minx immediately slinks to the 200-day moving average.

What am I doing? I legged out of the balance of my October S&P puts, expecting a bounce--either off this technical level or as sentiment shifts to a rate cut--and with the intention of building some year-end downside exposure.

Is there risk to this strategy? Yep, we could slide straight into the abyss. However, as opportunities are made up easier than losses, I'm alright with that. With the holidays (and my business travel schedule) beckoning, October paper is getting a bit close for comfort.

So there it is, for better or for worse. Let the
Snapper begin.

  • So yeah-an eventual probe higher wouldn't shock me as perception of a rate-cut sweeps the Street. And while I believe that psychology is fadable (read: a sale), the cut itself, if and when, is likely a higher probability sale (from an overbought position).

    If and when that happens, I'm gonna pull a Maximus.

    The risk is that the path of Maximus Frustration is straight down without a cut, leaving the bulls and bears waiting in vain.

  • Is Fannie Mae the modern day Halliburton?

  • For Gawd's sake, Charlie, please start your Bones show a bit earlier. I mean, seriously, don't these people work?

  • OK, you want my honest opinion? Greenspan's policies are largely responsible for the massive structural imbalances that are currently in place. There, I said it (again). The icing on the cake was his call to ARM's (adjustable rate mortgages) before he rode off into the sunset.

  • With that said, the fact that he would turn around as a speck in the sun and toss the '87 analogy our way is, well, more ironic than Alanis Morissette.

  • When did Flipper become a financial prognosticator?

  • Look at me, I'm CFC! Yep, Countrywide Financial is trading below the convert price. I expect Bank America to try and defend that (psychologically and structurally important) level but it's not Ms. Purty no matter how ya slice it!

  • Tell Check? OK, you asked for it. NYSE internals are 5:1 negative, the financials are fugly (BKX -1.5%, XBD -2%), the trannies (which we recently flagged) are 1.5% lower and beta is sloppy. Watch AAPL, which trades rotten, and Under Armour, which feels dry (and will likely rally if the tape turns).

  • I feel sorta funny without my S&P puts. Kinda like that rope in gym class.

Minyan Mailbag

Toddo,

Now that you've let the secret out about Mama's Fish House here on
Maui , why not have a Minyans on Maui Retreat? When I first started following you, my wife and I had no children. However, we have a son (5) and daughter (2), so it's hard to get away. Thanks for all you do! Minyan Curtis.

MC-

That sounds pretty sweet right about now. Unfortunately, we're gonna have to put that on hold for the time being but please absorb a few sunsets with your family on behalf of your fellow Minyans.

I will say that we'll likely pull together a Minyans in Manhattan "Circle of Trust" Festivus on behalf of the Ruby Peck Foundation in December. We're all about community and, if we can raise a few shekels for the kids in the process, it's all good.

Sometimes the best investments have nothing to do with the market.

R.P.

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