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Crash Test Dummies


Banks getting slammed against the wall.

Minyanville CMO Charlie Mangano just sauntered into my office--he's a sauntering type--and peered over my shoulder. "The financials are getting killed, what happened?" He asked, quelling any doubts I might have had about coming back in my next life as a marketing guy. "Carlyle, UBS (UBS), the credit-equity disconnect... the banks are sitting directly on their January lows. If they don't hold, we're gonna melt."

I'm not an alarmist, or at least I try not to be. And there is a big "if" there, with regard to the January lows (BKX 77.80) which, in all likelihood, would lead to a breach of the broader market lows (S&P 1310). I am, however, a risk manager and given what I'm seeing--from the banks to the breadth to continued credit contagion--I would be remiss if I didn't pass along my honest thoughts.

I'm not making big bets right here, right now, because whichever way the fray snaps, we'll likely see some serious gappage. Instead, I've begun some feeler positions in DBA (agricultural ETF) and Pan American Silver (PAAS) puts, with defined risk on both. I know the best bets occur between the twenties, so to speak, so I'm being gentle as I corner these cusps.

N's over S's as we find our way. If you're bullish, tech is likely the best Snapper candidate. If you're bearish, old school names are under distribution. If you don't know, sit back and do less. This is the world's wildest reality show and there's no reason to ruin it with coin tosses.

As always, I hope this finds you well.

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Positions in DBA, PAAS

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

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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