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Bullets Over Broadway: The Street Taps the Discount Window

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...be wary of a cornered animal - they've got sharp claws - but add it to the list of things that make you go hmmm...

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  • When will Minyanville emerge as Chinese food for thought?

  • The flies in today's upside try? The semicaps (as flagged) but, more importantly, the financials (C, JPM, WFC, BSC, LEH) and select beta (EBAY, RIMM). It's still early--for cheering or jeering--but so you see it.

  • The first probe lower, in my view, was intuitive. The question, and what matters to us all, is a function of degree.

  • NYSE internals, in the interest of abject objectivity, remain buff at 4:1 positive.

  • Hey, you married yet? Nyet!

  • While you were sleeping. Citigroup (C) has announced that they've tapped the Fed Discount Window for $500 bananas on behalf of its clients. Again, be wary of a cornered animal (they've got sharp claws) but add it to the list of things that make you go hmmm…

  • Hey now, so did JP Morgan, BankAmerica, Wachovia… y'all think that they got a phone call from Hank & Ben?

  • And-if so-should we fight that yet?

  • Can I please call Ben & Jerry's?

  • As it stands, it's Boo's bank account that is trading at a daily discount. Keep in mind, however-and remember that a few folks were claiming victory on the heels of positive pre-market futures-it's the final few hours that matter most.

  • "There is a huge dichotomy in the marketplace. On one hand, the market in general is being bid back up while government officials try to reassure investors as to the soundness of the financial system. Some of the same officials that originally didn't see a problem. On the other, investors are paying prices in options on bank stocks and other financials that indicate bankruptcy. We can't have both. This is not a "wall of worry". I have never seen option prices this high in big captitalization financial companies. Take what you want from that. Either the stock market in general is going to correct massively, or the buyers of this protection are really making a mistake." Professor John Succo on today's Buzz.

  • Where's Molly Ringwald when you need her most?

  • Answers I Really Wanna Know…

    • Given Bear Stearns is down a deuce (2%), should I have passed along the chatter on Monday that they're now having currency issues? (We don't "do" rumors in the 'Ville)

    • Is this the probe?

    • Particularly with the NYSE internals stubbornly sticky at 4:1?

    • How great is it that Ruby is imparting his wisdom across a spectrum of networks?

    • Isn't it crazy that sixteen cents is a 1.5% move in Beazer Homes?

    • Will petrol-nations battle China in the great American transfer of wealth?

    • I mean, isn't that the only way out?

    • What if the administration takes a tough stance on that big dance?

    • What's for lunch?

    • I wonder how the Round Hill is looking right about now?

  • Will the unwinding of income (buy-write) funds put a floor under the VXO?

  • Especially with thinning holiday ranks thinning liquidity?

  • "When a bank borrows from the discount window, that normally means they have no alternative for funds. Borrowing directly from the Fed in this way is more expensive and cuts into margins. If Citi really needs that liquidity it is very negative. If they do not then what is the reason for doing so? Perhaps psychologically the Fed is asking them to so that others that do it don't look so bad. Whatever is happening is highly unusual. Do not let market pundits tell you otherwise " Mr. Practical on today's Buzz (position in C)
  • Are we there yet?

  • An aspiring young college student is at MVHQ asking for direction for her some direction as she explores her Wall Street path. I suggested that she read three columns. The Money Tree, The Credit Card and The State of the Art.

  • The volatility index has now tested the uptrend line from the beginning of the summer bummer. Liquidity and volatility are the chicken and the egg that continue to lay. Which leads which? Gun to head, the former dictates the latter but sometimes, the latter matters as well.

  • "Terminators like Research in Motion (RIMM), Baidu.com (BIDU), Garmin (GRMN), and CROCS (CROX) have done a big Aretha number on the Bears: R-E-S-P-E-C-T. They've given the term "I'll be back " a new shine as they danced to new highs. However, they may be talking and telling as CROX and RIMM may be carving out Gilligan Sell Signals today: gaps up to new 60 day highs which see the stock close at/near the bottom of the day's range. Not all Gilligans are tops but many tops are Gilligans. Be that as it may, the up gap spike reversals on CROX and RIMM are talking right now and may start talking smack into the end of the session." Professor Jeff Cooper on today's Buzz (he has a position in CROX)

  • Am I cribbin' the Buzz? Yeah, sorta-time constraints (and money) make people do things they wouldn't ordinarily do. But, if you "own" the content, is it still considered plagiarism?

  • Gotsta hop, Minyans-I'll see you back on the Buzz.


R.P.

No positions in stocks mentioned.

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.

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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