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Freaky Friday Potpourri: The Circle Smirk!


Sniff the story under the surface.

As we ready ourselves for a three-day respite, the only thing missing from today's headlines are the outright giggles.

"Banks Set for Record Pay," announced the Wall Street Journal as the top 38 financial firms paced themselves for an all-time record $145 billion in bonuses.

Intel (INTC) earnings were "great news for the industry," said MarketWatch, citing a prominent analyst after the company reported one of the most profitable quarters in their history.

"JPMorgan (JPM) Earnings More Than Quadruple on Fees..." began the top story on Bloomberg, before digging deeper into the billion-dollar revenue miss and cautious comments from CEO Jamie Dimon.

While the hasty retreat of the pre-market futures synced with JP Morgan earnings, I'm reminded of three market axioms as we settle in for a Freaky Friday.

1. News is always best at the top and worst near the lows.

2. The reaction to news is always more important than the news itself.

3. Earnings are rear-view.

One could correctly argue that news these days is far from good. Under-employment (those out of work, not looking for work or working part time in lieu of a job) is close to 20%; that's one in five people you see on the street, my friends. The government I.V. drip is still very much in play, proof positive that the patient is yet unable to walk, much less run on her own. And the state of the states, as touched on in my ten themes, is tenuous at best, and a massive trap door at worst.

I would offer that news, as with most other things, is relative. If you're of the view that we've embarked on a new bull market -- which, seeing both sides, is what credit markets are suggesting -- the aforementioned concerns are building bricks in a wall of worry. If, on the other hand, you believe we've seen a cyclical bull in a secular grizzly -- supported quite nicely by the chart in this column -- take what you can get on the upside, smile kindly and excuse yourself from the party while you're still having fun.

Now, it's not really that simple. There is the overarching context of social mood, which along with risk appetites, shape financial markets. That's amorphous and ever-present, creating a dynamic that stretches from the corner store to the other side of the world. From societal acrimony (I saw someone verbally abuse a coat check girl last night) to percolating protectionism (the Google (GOOG)-China Syndrome being the latest example), the underlying tension is thicker than thieves.

Be that as it may -- and it may not "matter," until it does -- we'll continue to take our journey one step at a time. First blush thoughts today include layered resistance in the S&P, the downside gap lurking below (S&P 1127-S&P 1115), a stronger dollar (potentially asset class negative) and a three-day weekend full of football.

That -- and a profound sense of gratitude -- are paving my way through the fray today.

It's Just a Jump to the Left

Talk about a time warp; I'm having all sorts of flashbacks!

There's 2003, as the market continues to follow the credit carrot higher, befuddling bears in the process.

There's 2006, when we foresaw many of the dynamics unfolding today.

There's 2007, when the modern day witch hunt wandered to Washington.

There's 2008, when we touched on social mood, risk appetites, unintended consequences and moral hazard.

And there's that Show in '88 when I lost my...wait, wrong flashback!

The irony, of course, is that historical precedent need not apply in today's day and age. The heavy hand of the government, coupled with cumulative imbalances lurking beneath our feet, makes for a daunting duopoly with which to trade.

That doesn't mean we can't hit 'em hard, it simply means we should keep our right hand up as we rack up the points.

Random Thoughts

  • White light to Haiti; horror, pure horror.

  • Remember in Memoirs of a Minyan when I spoke about the difference between having fun and being happy? There was a chapter about "Shagababy," a "twisted tale of revelry that could have been called 'The Top of the Market.'" Speaking of flashbacks -- Page Six recently reported that the home sold for $14 million.

  • Is this the last bubble left?

  • Lest you think the economic trickle down is limited to the working class-or the US, for that matter -- this article about a potential meltdown in British universities is an eye-opener.

  • When European Central Bank President Jean-Claude Trichet says they have a "major debt problem" in Europe, does he mean debt, on the aggregate, is too high or there's a major debt problem in Europe?

  • The upside to the economic downside? Entrepreneurial spirit and innovation. If invention is the mother of necessity, a phoenix will arise from this rubble. More likely than not, the leaders coming out of the crisis won't be the same as those who enter it and the ability to add capacity in the downturn will define the winners on the other side.

  • Hey, Mercury Retrograde -- See ya, wouldn't wanna be ya!

  • This is a tricky year for the NFL; a month ago, the Saints, Colts and Vikings looked like a lock. My gut is that Indy will pay the price for pulling the plug on the perfect season and I'll be rooting for the Ravens in support of my brother and his family in Baltimore.

  • Have you seen Minyanville's take on the Apple (AAPL) Tablet? (It's required viewing and I rarely, if ever, say that).

  • Three little birds?

    • MV Tee's are TEN BUCKS on Main Street, along with brand new Bobbleheads and snazzy new hats.

    • Minyanland is a fun, engaging and free way to teach Mini-Minyans the building blocks of earning, spending, saving and giving.

    • Our MV Facebook "fan" page is up and running, as is our corporate website for those looking to learn about what we do and how we do it.

  • Have a GREAT weekend, Minyan; I'll see YOU on Turnaround Tuesday.


Position in s&p
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