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Random Thoughts: Perception Is Reality


Don't assume bailouts are a given.

  • Boy, this market sure trades like a couple of twins, eh?

  • In this morning's opener, I mentioned that I want to be more constructive for a sustained upside schnitzel ("a" low, not "THE" low in the context of a secular bear market) but the grabby greenback is Jeff Goldblum in this movie.

  • The golden rule of trading is that "bid wanted" situations are phenomenal entry points. When someone can't get, er, paid with a fistful of dollars in the red light district, can bank on the currency staging a strong rebound.

  • I don't profess to know when the phantom of deflation plays out-the government seems intent on socializing the markets and they've got deep pockets (ours!)-but the bar tab will eventually come due.

  • The horse race certainly becomes more interesting when the jockeys are sniffing glue, eh?

  • As Aunt Fannie (FNM) continues to rip, I'm starting to sniff for some defined risk shorts (into $41ish perhaps?). I buried a LOT of $70-line puts a few years back-a moment of silence please-but each trade has a life of its own. As Pep, Succ, myself and others have said, nationalization, if and when, won't be in the best interests of the shareholders. Shocker there!

  • And you don't think times are tough?

  • There was a time when news that CIT Group (CIT) is drawing on a $7.3 billion credit line would have punished the tape. Now, it seems, folks are thinking "Hey, no biggie, if push comes to shove, the Fed will bail 'em out."

  • Big picture, that's a very dangerous mindset with which to operate. Given the magnitude of debt and the maze of derivatives, nobody-not even the WWF tag team champs Ben and Hank-can stem the tide or stop the ride.

  • Near-term, it's an entirely more difficult dynamic as perception is reality in the marketplace. Thus, it's not a question of whether or not they can bail us out, the market will trade as a function of whether investors believe they can.

  • Forever joined in fate? My brother's pooch of 14 years will be buried tomorrow before they pick me up at the train station. I have a strong sense that Justice and Zoë are enjoying each other's company as we speak.

  • So it's said, I think gold bugs will be able to pick up the yellow metal with a seven handle at a point.

  • Given everything going in the world (mine and otherwise), I had to stop everything to get my NCAA brackets in by the 11:00 AM deadline. I've never been so clueless about the college hoops tourney as this was literally the first time I've looked at the pairings since they were announced.

  • Where did I net out? Tennessee, Jed, Georgetown, Stanford and UCLA with the Bruins beating the Vols in the title game.

  • Thank you. Thank you. Thank you. And thank you.

  • The top story on Bloomberg this morning? "Dollar Advances Against Commodity Currencies as Oil, Gold Extend Declines." Geez, wouldn't it be great if there was a financial platform that expressed that dynamic before it happened?

  • Man, when we said Baidu felt "sick" on Tuesday, who knew it was the bird flu? That was a mighty quick fifty points.

  • In honor of Zoë, I must share that laser pointers are the single greatest toy ever invented for cats. The irony of ironies is that I picked up a new one on Tuesday just hours before I found the bird curled in a corner. At the very least-which is a lot-Phoebe enjoyed the full benefits of it last night.

  • Fare ye well into the bell and enjoy the three-day respite. You've most certainly earned it.


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