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Random Thoughts: Chewing Through the Morning Dew


Check your positioning into the Wednesday ticks.

  • Overnight news? Hmm, let's see. The FT is reporting that sources close to Lehman Brothers (LEH) are "convinced" that the it's the target of an orchestrated campaign by the short sellers. Perhaps, but if a franchise can be brought down by rumors, we must again ask how strong the foundation is to begin with.

  • Please note that I bought an odd-lot of upside Lehman calls on yesterday's opening for a pure trade, predicated in part to 1) it was a green bean in a red sea, 2) it was likely purged into quarter-end and 3) it seemed awfully negative out there.

  • Deutsche Bank (DB) and UBS (UBS) both issued sanguine statements with regard to their capital, helping to put a bid under the beleaguered sector. On a separate note, Pequot's Byron Wien said the S&P 500 and financial stocks are bottoming. Could be, for a trade, but longer-term, I humbly offer that I disagree.

  • Remember the argument that NYC real estate was insulated from the downturn? Manhattan apartment sales dropped the most since 1998 (-22%) and unsold inventory is at an eight year record (+31%). Meanwhile, median prices are up 15% (can anyone say "hope mode"?).

  • Where are we and where are we going? Glad you asked!

  • Woof! If you thought $12 million to a pooch was outrageous, it turns out that Leona Helmsley, who passed in August, left her entire trust, valued between $5-$8 billion, for the welfare of dogs.

  • In my effort to supplant Television's JeffMacke© as the resident media trollop, I filmed a slew of videos for Yahoo TechTicker this morning (coming soon to the 'Ville), which isn't to be confused with the two MV Buzz TV hits I'll film for Fox Business today or, for that matter, Happy Hour tonight.

  • More importantly, I've been in constant contact with Jeff and he's asked me to pass along his sincere, heartfelt gratitude to all ye faithful who are sending white light on the passing of his pop.

  • Better lucky than smart indeed! I shared on the 'Ville yesterday that I layered in to some Yahoo! (YHOO) calls as it filled the pre-Microsoft (MSFT) gap yesterday. The stock is up 9% this morning on renewed takeover chatter. In the interest of full disclosure, my motivation was technical (the gap) and fundamental (their eyeballs) but either way, this is a pure trade and I'll be treating it as such.

  • Thanks Coops De Ville-Minyans reading the Buzz & Banter were alerted to S&P 1269 as a near-term inflection point yesterday afternoon. I'm still not sure what an Orb is but I've followed Jeff long enough to respect his approach.

  • We asked the question yesterday morning whether General Motors (GM) was a bounce candidate into the new quarter. I didn't pull the trigger (grrr!) but I was watching it as a tell. If that dog can rally despite the fleas, it'll speak volumes about just how much muck the tape has priced in.

  • Take the high road. It's less crowded and has a better view.

  • Wanna see me single-handedly stop this rally? Click here.

  • "My brother" and I were pinging each other yesterday near the opening, openly wondering if we need to see hard press lower (yesterday) before a meatier rally could take root.

  • When we reconnected late in the day lamented that he bought 'em right but sold 'em too soon. I responded that I had General Motors calls cued up, hit the buy button and A.D.D.'d the order. When I finally saw that it didn't go through, the stock was lower but I... well, I chickened out given my eyes (yes, it happens to the best of us).

  • What did I tell him? "Dude, get over it. Go out with someone else." After all, he is the one who taught me never lament when you make money. Invariably, that is a recipe for losses on the next few trading stabs.

Dude, that's Crude!

What should/can actually be done to make a dent in $140 oil? That was a question posed to me recently as we jimmied up the slippery slope. My thoughts:

A confluence of factors is behind the action:

  • Global demand
  • Supply constraints
  • Speculators (chasing performance)
  • Technicals ($140 is a big level)
  • Geopolitics (Iran/Israel).

What can be done? Let the markets do what markets do.

If you look at the last ten years, NASDAQ, Homebuilders, China and Crude have the exact same charts, with oil now at levels where other bubbles burst.

Click to enlarge

While we must allow for an uptick in geopolitical tension, I have little doubt that crude will follow in the same path.

It's always a new paradigm-until it isn't.

Minyan Mailbag!


You would be doing your Minyans an immeasurable service if were you to sketch out the available avenues for a 100% cash nest egg -- replete with measured precautionary tags, and in your inimitable fashion. Out here in the international lurking area, you've become a reference.

-Minyan L


Sure. My nest egg is in a money market account backed by T-bills. There's no commercial paper, as a few basis points of potential return isn't worth the "other side" of toxicity (if, in fact, it comes home to roost).

Cash is king when it comes to long-term savings-only trade with what you can afford to lose.

Best of luck,


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