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Random Thoughts: Mercury Rising


Strange things happen when the stars align.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Sock & Awe!

Mercury Rising! - 9:13 am

No, I'm not talking about the tension in New York City, which already feels like a police state given Dubya is staying half a block away. I'm talking about Mercury Retrograde, which officially starts today. That's supposed to throw communications and misunderstandings into a state of tizziness. You could read about it for yourself but alas, the Mercury Retrograde website isn't functioning properly (see what I mean?).

More profound, perhaps, is the fact that Hank & Ben's Wild Vice is trying to push (what could be) a trillion dollar bailout package through the system on Mercury Retrograde. I'm sure some of you are saying "why the heck should I care" but take me at my word, some strange situations start to simmer when these planets do what they do. And no, I'm not a guy that believes in unicorns and leprechauns (although I do have faith in butterflies and zebras and moonbeams).

Speaking of "out there" thoughts, there's been some push-back from what I shared in this morning's monster missive regarding the potential of a coordinated effort from abroad during a time of great vulnerability. Three quick thoughts on that topic.

First, as Old School Minyans know, I'm well aware that the frazzled financial fabric is a result of many years of financial engineering. We've spoken about it for a long time and the market is reaping what others have artificially sowed beneath the seemingly calm surface.

Second, I'll remind ye faithful that Minyanville monitored the invisible hand for years and got fingered as "conspiracy theorists." Au Contraire, Mon Frere, this proved true when the curtain was pulled back and the wizard was exposed, button and all.

Finally, I'm not saying "it" happened, I'm saying that "it" is possible, "it" is being explored and "it" would go a long way in explaining why short sales were altogether banned in the finacials (note IBM (IBM) was added to "the list").

I'll be back with some market thoughts--and, I'm sure, plenty of other vibes--so lemme swallow this Joe and get a handle on my day. It's the Hump, Minyans, let's hit it hard.

Germans? Forget It, He's Rollin... - 10:00 am

  • So the FBI is investigating Fannie (FNM), Freddie (FRE), Lehman and AIG (AIG). I sure hope they have some derivative gurus on staff because it's gonna be a messy web.

  • "The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise." F. Scott Fitzgerald

  • We spoke of Our Wishbone World this morning and how the bailout suddenly reintroduced the specter of hyper-inflation. That has me thinking about our "capital preservation, debt reduction, financial literacy" mantra as it relates to the first component. IF the pendulum jumps the land shark, "capital preservation" may require a gold component. It's a fluid assimilation so stay tuned, Minyans.

  • Societal acrimony? What societal acrimony?

  • Remember Hank's Mandate? Short sale ban, rally in the financials, Goldman Sachs (GS) issues a secondary offering. Shocker, eh?

  • On the structural front, today is "T+4" for the short sale rule, which means that broker-dealers must cover shorts by today or be put in the penalty box. That 'could' lead to some imbalances.

  • This is an important nugget: I continue to hear from people far and wide that they can't borrow ETF's or get shorts off in the market. I was with a very close friend (who I used to share a foxhole with) at dinner last night (nice restaurant, noticeably thinned crowd) and he told me he tried to short the S&P up 20 handles (on the Buffett-Goldman news) but he couldn't get it off.

  • Wars over, Wormer Dropped the Big One! I also know alotta professionals who are hanging up their cleats. My buddy who I had dinner last night was very excited about that, offering that 25% of the hedge fund universe will disappear and "edges" will become less crowded and good ideas will again be rewarded. I agree with him, although I think he's "light" on his number.

  • If I were a Hussman, ya ha deedle deele, bubba bubba deedle deedle dum.

  • As if Mercury Retrograde and the wailing sirens weren't enough...

  • Help me, I'm being tormented by this song!!! (I secretly like it.)


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