Random Thoughts: Is This Capitulation?
Editor's Note: This content was posted in real-time on our premium Buzz & Banter and is being shared here for the benefit of the Minyanville community. See also The Upside of Anger, It's a Market of Money, Not a Money Market, Random Thoughts: Viva La'Merica! and The Sandman Awakens.
Bye, Bye Miss American Pie - 11:23 am
- How you doin' General Mills (GIS) (+2.3%)?
- The VXO is is trading at 35. It's a step in the right direction but far from previous pain fulcrums.
- How do you shoot the devil in the back--what if you miss?
- If "I" were Hank Paulson, I'd be really psyched I sold all my Goldman (GS) stock tax free.
- I mean, er, wait--that's not where I was going with that. Uhh... if "I" were Hank Paulson, I would pull a bunny out of my magic hat into expiration, which is Friday.
- Can't you just picture the scene at the Treasury? Hold... hold... hold...
- Other green beans (trying to see both sides of the trade)? Sears Holding (SHLD) (which I can only assume is because you can't borrow the stock), Pepsi (PEP), Campbell Soup (CPB) (note the 'theme' there), Johnny John (JNJ) and Pfizer (PFE) (drugs are typically a safety play).
- Remember the Sandman? I honestly don't know which side of that line Citigroup (C) will find itself when the dust settles.
- I will say this again because it's my single best thought. Remain lucid--we have a helluva hard road ahead but the greatest opportunities are bred from the biggest obstacles.
- I don't know if it's a cancer or a car crash but I know that on the other side of that process, there will be unbelievable opportunities. We simply need to get there.
- How am I playing this? All cash. Sorry, but I'm long serious, short sexy.
- I reserve the right to fight, mind you, but I'm exercising my constitutional right to do less. That is, at least, until they take that away from us too.
- As I mentioned last week, I DO see a Resolution Trust Company "type" of initiative on the horizon. It's just a shame that it's taking "this" for the boys on the Beltway to see the same.
- THIS is one song that seems to sum it up, eh?
The Market will do what the Market will do... - 12:17 am
I'll be honest, I was tempted to buy some Goldman (GS) when it ticked towards $100 the first time but, pulling up the call option string, laughed out loud at the premiums. 
Minyans know me--I pride myself on being a contrarian, which is to say I sell blips and buy dips. Still, with the DJIA down 300 and the Spooz off 40, I'm not touching 'em. Perhaps that's THE signal that a bounce is coming but opportunities are made up easier than losses.
I've consciously traded the potential to profit for the knowledge that my powder is dry during this perfect storm.
I know one thing--it doesn't "matter" who was right in this particular instance. We've monitored these imbalances for years, spoke of crash potential on September 3rd, asked last week if "The Big One" was coming and wrote the script last night of the "how's, why's and when's".
I feel horrible and excited all at the same time. Horrible for the livelihoods lost and families affected. Excited we're taking the painful pill we've long awaited, which is a necessary step towards the eventual recovery, one that will have monstrous opportunities for those properly prepared.
There is indeed a new world order and we have a long way to go.
We must accept that time is the arbiter of fate and this period of price discovery will persist.
Is "this" capitulation? Not through my lens. Not with the VXO at 37. Not with the BKX 35% above the July lows. Not with everyone asking if it's a capitulation. I've lived through capitulation, my friends--it occurs when you don't care, when you stop trying, when you wet your pants.
That doesn't mean we won't see rallies--we most certainly will--but the sooner we go through this, the quicker we'll get through it.
Good luck--and remember, there's a massive difference between self worth and net worth. I learned that lesson the hard way and share it with hopes that you won't have to.
Be strong. Be a Minyan.
R.P.
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 todd@minyanville.com.
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So I guess I agree with ya, Todd.
I can remember moving to Dallas, Tx from a small town in Western Kansas, living in a new condominium complex (back then this was a new thing) with my dad (after his divorce). He gave me his Datsun 240Z to drive, and I was an instant hit with all the girls. The drinking age (liquor and beer) was 18. The parties we had were INCREDIBLE!
Now, after all these years, it is all gone.
It might as well be ANOTHER PLANET!
How many years has it taken Uncle Sam to destroy the former greatest country on the globe?
But the bigger question is, WHY did we let him do it?
There is a blogger named Denninger. He bashes his head against the wall almost every day, trying to be a nice guy.
I knew a guy in Colorado that did that for awhile, until one day he finally realized he was bashing his head against a wall.
That is right people, Uncle Sam WILL NOT LISTEN TO YOUR WORDS!
You can write letters, send a fax, make phone calls, send email, and it is all a waste of time.
Uncle Sam does what HE wants!
If he wants to destroy America, HE WILL, and there is not anything you can do about it.
What I do not understand is, what does Uncle Sam think is going to happen to his children?
Does he think all the Swiss Bank Accounts will keep them safe and warm?
Does he have plans to move his family out of the U.S., likely to Switzerland?
IMPORTING LABOR FROM THIRD WORLD COUNTRIES
EXPORTING JOBS TO THIRD WORLD COUNTRIES
IMPORTING CHEAP GOODS FROM THIRD WORLD COUNTRIES
BORROWING AND SPENDING LIKE THERE IS NO TOMORROW
Hey, thats it, I just answered my own question, there IS no tomorrow!
It is a death spiral.
How angry will people have to get before the pitchforks come out?
But pitchfork in this day and age is merely a metaphore. The utensils of modern science are far more lethal and insidious than a piece of sharpened metal.
