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Randoms: What Does Chrysler Mean for the Market?

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Bankruptcy looms for troubled automaker.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also 2009: The Year of the "W".


While I have a face for radio, I spent the better part of this morning filming a few segments for our friends at Yahoo TechTicker. I managed to work Jack Bauer and C.T.U. into the mix, which is always nice. Those muse and view will be coming soon to a 'Ville near you so stay tuned.

Some Thursday thoughts as we kick start the session:

  • As discussed in my opener, my sense--and this is one man's humble opinion--is that 2009 look a lot like a "W" by the time we kiss baby new year. While we're somewhere near the middle peak, we must allow for perception (of a breakout above S&P 875) to shape reality. I do believe, for what it's worth, that any push higher would be an exhaustion rather than the birthing of a brand new bull.

  • We shared this chart yesterday but I will do so again because I think it offers awesome perspective. The S&P has put in 17 lower highs since the 2007 top (clearly negative) and we're still 44% off those highs (there is room for further retracement higher in the context of the negative trend). Please see both sides, Minyans, and trade 'em with discipline.

  • FAS Times at Minyan High? Remember that upside gap in the trading crack (FAS ultra-bull binge)? That will "fill" at $9.25 and it'll be interesting to watch the price action in the financials once it does.

  • Lotsa chatter on Chrysler this morning and I'll offer these vibes. Debt holders seemingly wanna take their shot in bankruptcy court rather than accept pennies for their pound of flesh. THE risk, from where I sit, can be summed up in three words and one hyphen: "Counter-party risk."

  • In a finance based derivative laced global machination, we're only as strong as our weakest link. If Chrysler serves as a precedent for General Motors (GM) or Ford (F)--not to mention troubled financial institutions--unintended consequences could conceivably manifest in a wicked way.

  • And yes, as debt destruction is the only true medicine for what ails us, one could argue that failures are a necessary evil. It's just that, given the DNA of this marketplace, infections tend to spread quickly. Hence the conundrum.

  • Keep half an eye on JP Morgan (JPM), which is noticeably not participating in the early morning liftage.

  • Like the 'Ville and want more astute analysis? Take a free test drive of some of our subscription products.

  • Please be on the lookout for incoming Professor Branden Rife, who has one of the better trading feels I've come across. No mushin', just tellin', as we continue to build the thrill of the 'Ville. In fact, here's his first column: Value Dilution Shows No Sign of Stopping

  • Relax your grip on the handlebars, my friends, as it makes for a smoother ride through the turbulent tide.


And finally, through the lens of perspective and with white light vibing hard, I share this email from Minyan Bill from Coppell, Texas:

Toddo,

As of nightly news time here in Texas 10:00 pm, Fort Worth Independent School System has shut down all grades until May 7th or 8th. The UIL (governing body for high school athletics) called off all events until May 11th. I believe the number of students affected in Fort Worth is 80,000 plus. Lots of working families having to scramble to find places for their children. School board has asked employers to be forgiving while parents make plans for child care for the next seven plus days.

Thanks for all you do,
MB

R.P.



In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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