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Morning Round-Up: Financials, Countrywide, Venezuela...


Missed out this morning? Let's get you up to speed!

What was all the Buzz about on this morning's Buzz? It's all gathered here for your reading enjoyment!

Gate Sniffage - 9:51 AM

  • I'm hearing that JP Morgan had an interal "global liquidity call" this morning that was, in the words of my source, the "most bullish it's been in a month." According to him, they feel LIBOR is peaking and commercial paper is starting to move which, if true, would bode well for upcoming debt deals (FDC) and lift a weight off the back of the bulls.

  • One of the sharper Minyans in our midst offered a few weeks ago that "it's all about spillage--if the consumer melts, we're toast. If they hang in, we end the year up 10% higher from here." In that vein, please keep close tabs on Wal-Mart (WMT) as a consumer proxy. While the stock is up a deuce (2%) today, $42.5 is critical multiyear support.

  • For my part, I continue to watch the financials like a hawk (see the three "higher lows" in the XBD) and commingle that with breadth (currently 3:2) and beta (mixed) as my daily critter compass. I'm watching with 1.5 eyes as that freaky twich won't seem to fade. I mean, honestly--a twitch. Out of nowhere. I didn't see that one coming (literarly or figuratively).

  • Energy and metals are stepping up and standing out of late. I've been quiet on these groups but I'm watching them carefully. The savvy soothsayer also highlighted them on Mon, er, Tuesday and Professor Lance is all over that trendline today. See 'em, please.

  • Good luck Minyans---let's do this.


Fists and Docs - 10:05 AM

Does anyone else get the sense that this downside tickle is the requisite probe? The depth and severity remain to be seen, natch, but we knew it was coming after yesterday's Bleeder.

While I continue to eye the 200-day at S&P 1460, I'm somewhat unsure of the path we take to get there (or lower). The breakout in vols bodes well for Boo, we know, but the mere perception of "looser credit" could serve as a spark in the dark.

I continue to trade with a short bias but I'll likely pare down my risk a bit more if the SPU's flip positive and begin to "leg" my puts out of October and into year-end paper.

Just thinking out loud as we figure it out....


Look at me - I'm CFC! - 10:09 AM

Remember way back, we noted that Countrywide Financial (CFC) $18--the convert price in the Bank of America deal--was a huge level, both structurally and psychologically.

Don't look now, cookie, but we're there.


Don't Cry For Me, Fernando! - 10:20 AM

Venezuela is on the tape--yes, Venezuela--as Bloomberg reports that overnight rates soared from an average of 22% yesterday to as high as 90% today and the central bank has suspended loans.

Does this matter? You betcha, Minyans--in a globalized machination tied together by $500 trillion in derivatives, it all matters. It's just a function of what matters when and how much.

You are NOT seeing this in the mainstream channels yet so please take note.


Answers I Really Wanna Know - 10:42 AM

  • Does Venezuela "matter"?

  • Did you think Russia "mattered" in 1998?

  • Is it me or does it strike anyone else as strange that the mainstream media hasn't mentioned this development?

  • Even as the gold and crude markets seem to be reacting to it?

  • Which would you believe?

  • Why is Justin Rohrlich listening to this?

  • Y'all see the punk action in the financials (XBD and BKX each off 1%)?

  • How 'bout NYSE internals as they edge 9:5 negative?

  • Are the bulls in hope mode on a rate cut?

  • Are the bears waiting for a rate cut to pounce?

  • If the last two bullets are true, is the path of maximum frustration lower sans a cut?

  • Who the heck uses sans anyway?

  • Does anyone know what it means?

  • Why is it always italicized?

  • Did Hoofy hit his hard six?


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Position in S&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

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