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Monday Morning Quarterback: Remember Deflation


Watch price levels as the year plays out.


Good morning and welcome back to aces wild. For the first time in history, the four top seeds have advanced to the final throws of March Madness. One week from tonight, UCLA, Kansas , North Carolina or Memphis will claim fame as the best team in the land as Minyan Steve Voigt of Honolulu cheers loudly from the stands.

Closer to home, Ben Bernanke's bank shot bracket has much higher stakes. After a bitter battle in the Fed Chief's head, Deflation outpaced Foreclosures to claim the prize of primary concern. With March winding down and Fool's rushing in, we would be wise to remember this epic event as the 2008 season plays itself out.

For my part, after attending a wedding south of the border and arriving home late last night, I'm scanning the land and shaking the sand. As such, I humbly submit the following thoughts as I ready anew for a five-session set:

  • We asked the question last week whether Bear Stearns (BSC) was "A" bottom or "THE" bottom after the bulls bum rushed the upside following the Fed-backed bailout by JP Morgan (JPM).

  • That debate remains as the S&P traces out a seemingly endless series of lower highs on one side against a double bottom on the other. Technical analysis is a context not a catalyst but in the absence of clarity, reactive rationalization tends to manifest.

  • Policy makers to shift an alphabet city of regulatory bodies into one big brother. I would be comfier with this process if the same folks responsible for the problem weren't also trying to solve it.

  • I appreciate the need (at this point) for artificial drugs to dull the patient as the medicine (time and price) takes hold. The question is how many drugs and what type of medicine? There are only so many syringes in the hospital.

  • Mr. Practical continues to allude to the potential for the creation of a massive trust that will "buy" up the mortgage debt that nobody else wants. While that would be a short-term boon for the markets, the ramifications for future generations (and the notion of free markets) is mind-boggling.

  • Schering Plough (SGP), which has been a money trade each time it dipped into the teens, is getting hammered on the heels of the Vytorin news. I own some defined risk calls in this name and will watch how it trades once it opens in New York.

  • Quarter-end, Minyans. Right hands up.

  • Barron's asked "Who's Behind the Commodity Boom" over the weekend. Minyan Jeffrey Kornezik asked the same question in his Op-Ed the week prior.

  • Congrats to Minyan Tom Klempay for sitting solo atop the Minyan March Madness Leader Board! The winner of will scoop a snazzy bag of Minyan shwag while the "non-winners" will have the right-but not the obligation-to do the right thing for alotta kids!

  • I know three things from my brief weekend trip. First, surfing is one of my new favorite passions (although my ribs be hurting). Two, the dollar looks a lot more like a Peso than what I remember. Third, there are a whole lotta people out who aren't fixated by the flickering, bickering ticks and enjoying each and every day. Food for thought.

Have a great week, Minyans, and GREAT luck Pepe and Lila!


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