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Random Thoughts: Gold, Nationalization, Central Bank Halt


Mama always said that the difference between saying something and doing something is all the difference in the world.

  • I know it's no shocker that spates of nationalization are percolating in Venezuela--we've been talking about it for a mighty long time--but Mama always said that the difference between saying something and doing something is all the difference in the world.

  • And you know what happens when you mess with Mama.

  • I sure do miss Mama's Fish House. (Note to Minyans-if you're going to Maui , The Inn at Mama's is the best kept secret on the island. Uh, until now that is.)

  • I'm no expert on foreign affairs (other than these), I'm somewhat surprised that the fact that their interbank overnight lending rate quadrupled (22% to 90%) and the central bank halted operations isn't getting more play or press. Zero liquidity is an overt negative, particularly given the current credit conundrum, but it has yet to hit the media radar.

  • It has, however, hit the crude (+1%) and gold (+2%) radars, which may--and I reiterate may--be a precursor to it getting more play in wider (equity) arenas.

  • Hey, Minyanville is all about making sure you see both sides of every trade such that you can make better and more informed decisions. So take this for what it's worth and digest it as you will. For at the end of the day, we wanna be in the information loop before we put corks on our forks.

  • The Daily Telegraph offers another view of the golden dew--that China is buying gold with its reserves. We've talked about this in the context of the transfer of wealth but so ya see it.

  • Inflation in things we need (commodities), deflation in things we want (credit). I don't envy the folks in the Federal Reserve (but I do respect the bite of a cornered and scared animal). You know the script and we know the ending. It's the timing that is oh-so-critical.

  • The Sisyphus Sigh! If SPAM was a stock, I'd be getting squeezed like an orange right now. I'm about to cry uncle and "delete all" but there's always some important email nuggets nestled in that midst.

  • The following Buzz appeared between 12:00 PM and 1:00 PM

    Eyes of the World
    12:31 PM

    Note Goldman Sachs--the most important stock amongst the financials (CFC $18 notwithstanding)--has flipped the Matador switch as NYSE internals edge 2:1 positive.

    Under the mantra of discipline over conviction, I'm partially legging out of my October S&P puts (keeping some on) and trying to focus on the mechanics of the swing on our way to the results of the at-bat.

  • The critters are taking over the world. And you know what? You ain't seen nothing yet. You've got my word on that.

  • R-Fed is the Tiger Woods of tennis.

  • Minyans. Bones. Fest. Tonight.

  • Are we there yet?

  • The following exchange took place between 12:30 and 1:30...

    Bad is the New Good! - Adam Katz - 12:45 PM

    With respect to Toddo's comments on Venezuela... I think Minyanville is the first to report it. I also think it's bleeding onto trade desks and given that, bad is the new 'good' because bad news increases the likelihood that we get the rate cut the Fed funds futures markets are pricing in.

    I do also agree that there is some new headline risk out there as a result. Surely it's more important than Wal-Mart (WMT) having a decent month (second most read story on Bloomberg).

    Run around and a Rundown - Me - 1:06 PM

    Meow Mix (aka Adam Katz)-

    First, congrats on your pending nuptials next weekend--I'm looking forward to sharing the occasion with you.

    Second, in all fairness, Bloomberg was the first to report the Venezuela news (and Scotto Reamer deserves credit eying it).

    Third, I'm not so sure I agree on "bad is the new good" although, as you're the one who taught me that purple was the new pink, I respect your opinion.

    In all seriousness, I'd be more inclined to agree with you if the market was on its heels and the tape was severely oversold. It's not (and notter).

    Further, while I agree that the knee-jerk would be higher on a rate cut, I'm unsure 1) where we get it from (we might need more meltage for them to cut, making the cut itself bittersweet) and 2) if it'll stick (I don't believe it will, a la January 2001).

    Be that as it may, and consistent with my last Buzz, I have cut my S&P puts in half as I begin to leg into out-month paper. If we rally, I'll start nibblin' anew and if we fail, well, I'm there.

    Either way, there won't be any corks in my forks. My buddy, going through a tough time in his marriage, recently said to me "I can't decide if I'm more miserable with her or more miserable without her."

    I told him that he's looking at his situation in a way that sets himself up for failure no matter what happens. Instead, he should be asking himself whether he's happier with her or happier without her. That way, he's a two-sided winner.

    The same can be said for trading.


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