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Randoms: Of Truth and Trust


Are bad loans the next wave of this crisis?


It's Freaky, it's Friday and it's almost over. Does anyone else feel like this has been one of the longest weeks evah? Hand raised's the gift that keeps on giving. Deep breath as we tie up July and reach for the sky. Here's what's top of mind.

Josef Ackermann, CEO of Deutsche Bank (DB), was early on the "credit" train (or, his name and word as it pertained to the financial crisis).

Speaking in Zurich, he just offered, "This crisis has consisted of a series of earthquakes with changing epicenters. Bad loans are the next wave. Banks that have fared relatively well so far will also be affected by this."

His stock is currently off a deuce--14% this week--and for what it's worth, in the immortal words of Mona Lisa Vito, I think he's dead-on-balls accurate (it's an industry term).

That doesn't mean it's today's business--or that he's right--but you know where I stand and how I'm positioned. The tricks to this trade are two-fold and familiar, time and price. In that vein and through that lens, I continue to waffle and wade with the tides of the tape, trading around a short bias under yesterday's highs (which coincide with all sorts of serendipity).

Toss in Professor Jeff "Coops DeVille" Cooper's cycle work and you've got a recipe for some serious slippage. That's most certainly not set in stone--heck, we could rip through those levels today--but as discussed yesterday, the mechanics of the swing trump the results of the at-bat.

When I was explaining the risk to a friend (who isn't in the business) last night, I spoke of my entry levels juxtaposed against the technical construct. "It's sorta like risking a buck to make ten," I told her, "even if you lose the buck, that's a bet you wanna make 100 times out of 100."

I don't want to lose a buck, of course, but some things are out of my control. I'm just a squirrel, baby, trying to find a nut.

In other news:

  • Do you have any light reading? Why yes, I have this pamphlet on Jewish sports legends! Snaps to Minyan Dougie Kass for passing along this tribute to Sandy Koufax, who is actually his second cousin. (settle down, it's a quote!)
  • How would I describe today's action in a word? Belabored. I would venture to guess that I'm not the only one who's tired.

  • Wanna hear a secret? Last September, while doing a TV segment, the producer yelled CUT! I asked what was wrong and she told me to be "more upbeat, more positive." I promptly told her that my opinion wasn't for sale (and you know what the markets did from there).

  • Today's tea leaves? A mixed bag with a slight bovine skew. Internals are 9:5 positive, the financials are laggy (yet Bank of America (BAC) remains buff) and the greenback is off 60 bips (as you know, a lower dollar is a necessary precursor to--but no guarantor of--higher asset classes).

  • Guess what I'm NOT doing this weekend?

  • And finally, this missive wouldn't be complete if I didn't thank ye faithful for being part of the Minyanville community. We'll set an all-time traffic record this month, smack dab in the middle of the summer no less, with upwards of 10,000,000 page views. That's awesome--and humbling--and I would be remiss if I didn't express our gratitude. And we've only just begun...

  • As always, I hope this finds you well.


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