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Worst. Christmas. Ever.

By

Shaping up to be black December for retailers.

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Hello from New York, where I'm eager to share a letter I sent to the producers of Squawk Box (CNBC's morning program, which I guest hosted last Friday).

Other than the fact that I dumped my General Motors (GM) Monday morning - not because I saw this sell-off coming, but because I spent the weekend muttering "I'm long GM?!" to myself in a self-abusive way.

Not all of the below made the air, but I thought it would be fun to get a glimpse at the behind-the-scenes prep which goes into making TV - and, frankly, the bullet points pretty well sum up where I stand (the sidelines, mostly), and why I'm there.

Dear Squawk People,

Couple thoughts/ questions for those of you (like me) silly enough to be at your computers on Thanksgiving morning:

Pete is fired up (even by Pete Najarian's standards) for Black Friday at the Mall of America. Having been to the Mall (I'm a Minnesotan), it's a target-rich environment with regard to shots and what we can have Pete doing. It has every retailer, every form of appalling food (most of it on sticks or in cones and 99% of it fried), every restaurant chain (provided it serves chicken fingers) and a theme park called Camp Snoopy. They don't put it on the marketing material, but I believe the Mall of America also has more kiosks selling tacky crap under one roof than any other mall in the world.

What I'm saying is, it's Freak City, and Pete's going to be the Mayor. So far, all I know about the segments is that you guys want them to be "Snarky and Punchy." Pete and I are that way with one another, both socially and on camera, so I wouldn't worry about that being a challenge. Pete genuinely does the Mall of America with his (gorgeous) family every Black Friday.

Regarding the other 2 hours and 50 minutes of the show, I'm all good. My market stance (and some graphs that would be useful) are as follows:

  • I'm almost entirely in cash and have been making fast trades all year. I believe, and have said often on FM, that 2008 is the year "Buy and Hold" officially died.

  • Even after the biggest rally since 1932 (which came in August, a little over a month after the biggest 2-day drop ever), the market is trading where it was in August of 1997. Inasmuch as it spent most of the intervening 11 years above these levels, the vast majority of folks who have been involved with the market since the mid-90s are underwater. Take a look at 10 years of the S&P 500:


    Click to enlarge

  • The banks are utterly unknowable in terms of valuation, even without the government's random but aggressive involvement.

  • Including the government bailing out everything, the banks are still impossible to value. In fact, the valuation challenge is exacerbated, because you can't know any of the rules from week to week.
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Positions in UUP, MCD, WMT

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