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Random Thoughts: Navigating a Critical Crossroad

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This is the most important time in financial history.

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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 Hank Paulson: The End of the World As We Know It?


Gate Sniffage! - 10:38 am

  • Apologies for the laggage--I started my opening missive at the crack of dawn (and she was none too happy)--and just put the finishing touches on it. It's massively important so I wanted to make sure I chose my words carefully.

  • I spoke to Mr. Practical last night and he asked me to pass along his well wishes to ye faithful. I'm gonna assimilate his views and synthesize them for tomorrow morning's Freaky Friday Potpourri. He is indeed a good, true Minyan.

  • We flagged General Electric (GE) a few weeks ago and I was long puts when I was legally allowed to trade the two-sided capital markets. We "know" the issues with GE Capital and understand the industrial side of the equation is vulnerable to a global slowdown. With all that said and respected, the reaction to news is more important than the news itself.

  • As I said yesterday, "The current tape is a very simple tug-o-war. On one side, there is "artificial bullishness" as a function of tight borrows and prohibitive short sales. On the other, there is deteriorating credit and fragile psychology. It is most certainly a binary outcome."

  • Bigger picture, there is a more profound question to answer as we edge through Our Wishbone World. In particular, will "capital preservation, debt reduction and financial intelligence" help us if we jump the shark to hyperinflation?

  • That was the root dialog between Mr. Practical and myself last night, who offered that he's shifted some of his capital to the Japanese Yen and Gold. Again, we'll dig deeper into this in tomorrow's discussion but I thought it was a snippit worth sharing.

  • Risk management over reward chasing is independent of your directional view. Something to keep in mind as we witness these historic swings and eyeball our third cup of joe.

  • I will humbly ask ye faithful to take ten seconds to click on this link and click on the up arrow. It's not about "me," it's about supporting Minyanville in our mission to affect positive change through financial understanding. We are a community--this is what we do.

  • I'll be back, my friends--as always, I hope this finds you well.


Can You Imagine What Sydney Ellen Wade Would Say? - 12:06 pm

  • Mercury Retrograde is gawgeous, I'll tell ya. I just finished a comprehensive Buzz and unleashed it for ye faithful and voila! It's gone but not forgotten.

  • Bad seasons define good fans (go Raiders), bad times define good friends (you) and bad markets define good partners. A new world order upon us, Minyans, and we'll all be defined by 1) the company we keep and 2) conducting ourselves in a manner consistent with who we believe we are.

  • Minyans are reminded that we've introduced quote pages to our arsenal of aweness. Simply type a symbol into the search box and you'll get all you need to know about the issues of any particular issue.

  • Red Beans in the Green Sea? Mother Merrill (MER), Washington Mutual (WM) (-7%), cyclicals such as Boeing (BA), Deere (DE) and Dupont (DD) and select tech such as Intel (INTC), Broadcom (BRCM) and KLA-Tencor (KLAC).

  • "I'm a citizen, this is my President. And in this country it is not only permissible to question our leaders it's our responsibility!" Lewis Rothschild, An American President.

  • What am I most looking for in this bailout proposal (aside from a schedule of allocation)? Balance of powers. Hank and Ben are looking for immunity and that is, by definition, unconstitutional. Talk about moral hazard--Jeezums, where do you draw that line?

  • If the specter of hyperinflation arrives, capital preservation may shift to capital conversion. Whether that means the Japanese Yen, Australian Dollar, Gold or something else entirely remains to be seen. I will say this, the potential for a "two-tier currency" is possible albeit not on anyone's radar yet (except ours).

  • We've taken great strides to offer credible clarity during these tough times. While we've asked tough questions--including introducing the specter of financial terrorism and asking why troops are being redeployed stateside--we're certainly not sensationalists, we're simply attempting to provoke thought.

  • With that said, I must be forthright that I've considered moving MVHQ outside NYC until after the election (which may or may not occur on schedule).

  • Speaking of the balance of powers, I'm looking for something snarky that will make people smile through the lens of "a little levity goes a long way." Hmm... oh, I got it, here ya go.

  • As always, I hope this finds you well.

R.P.

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