Freaky Friday Potpourri: Fried Green Toddo
By Todd Harrison Oct 17, 2008 10:44 am
Not quite bullish on credit, but not exactly bearish, either.
The final fifth of our freaky week has arrived and the song the swan sings with echo with laughter into the weekend. This particular five session set has been a wild ride, with an 1800 point DJIA spike stuffed into Turnaround Tuesday, triggering a 1600 point decline into yesterday's low before an 800 point upside reversal into the close.
Pause for effect. Think about those moves. These are bigger swings than a Hedonism Vacation!
For my part, yesterday summed up the stressful mess. After giving a series of interviews on Yahoo TV-touching on topics such as market volatility, hedge fund woes, the 2008 trading low and the role of the economy in the upcoming election-I stepped into my turret, faded (bought) into the abyss, did a Fox spot on my attraction to energy, made some sales (against my earlier purchases), rode out the closing hour on the small screen, jumped across town for an important meld, met President Fish and Grandpa Mangano for a quick schnitzel, capped off the night with a business dinner before face planting into my Tempur-Pedic pillow.
I don't share the details of my day as a function of narcissism-it's actually entirely more selfish than that. I am spent and spenter after yet another wild week and there is a slew of content-written and video-nestled above that sums up my current stance. I would expand upon it but it remains essentially the same:
Buying dips to sell rips, with the sense we've seen the 2008 trading low but respectful that the cancer is bigger than the patient (and will lead to a long hangover).
I've shaped my risk accordingly and enter today's fray with tired eyes and profound humility. Nobody is smarter than the market and we're all just pawns in her game. That's worth keeping in mind, particularly given that Mother Nature is in a mood after being messed with.
A few items of note on the all-important credit backbone.
Professor Bennet Sedacca offered this nugget on the real-time Buzz & Banter yesterday afternoon. For purposes of perspective, market levels were S&P 895, DJIA 8485 and NDX 1238.
Is the credit thaw starting?
Corporate deals are starting to get done.
Municipal deals are starting to get done.
Citigroup (C) is admitting to correct marks of its nuclear waste.
LIBOR starting to behave.
Mortgages starting to tighten.
How much more unwinding can there be?
While not bullish on credit, I wanted to make it known that I am significantly less bearish on credit.
This is a large change for me, for what it's worth.
On the LIBOR front, the three-month cost of borrowing dollars in London fell overnight, establishing the first weekly low since July while the overnight rate slip 27 basis points to 1.67%, the lowest level since September 2004.
Position in bhp, wft, eem, qld, fxi
Get The Minyanville
Daily Recap Newsletter
Daily Recap Newsletter