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Random Thoughts: Tying Together an Uncertain World


Market elements battle for traders' attention.


It's hard to believe it's been seven years, almost to the minute, since that fateful day.

I've already shared my fare-in what was one of the most difficult, albeit extremely cathartic columns I've ever scribed-so I'm gonna turn my attention to the tape.

Life goes on and for that, we're extremely lucky.

Several elements are competing for attention this morning. Lehman Brothers (LEH) tops the list as the stock continues to digest its kitchen sink approach.

Yesterday afternoon, Professor Bennet Sedacca noted on the Buzz that Lehman two-year paper was trading 1000 bips wider than it was the previous day. That was the clarion call that the market wants to see more.

Stocks are thermometers, as we're apt to say, but credit is the backbone.

Lest you're tempted to view the dew through a myopic lens, other elements are jockeying for mindshare.

There's the continued fallout from Hank's Hail Mary, not only through the lens of socialism and moral hazard, but with regard to how many fingers are left to plug the dike.

The government used two fingers over the weekend-presumably the middle digit on each hand-and one's left to wonder what the next shoe will do.

There's the dichotomy between credit and equities, which continues to signal that the former must catch a bid or the latter will hit the skids.

There's the devil of deflation, which used to be phantom but has since taken form. To wit, it was two years ago when I wrote:

"I won't pretend that all is well in the world or that the worst is behind us. I'm simply looking to shake shekels from the tree and pocket them before the Phantom returns to his rightful home.

Who is this Phantom I speak of and what does he want?

For me, it's a simple yet unpleasant answer, the type of discussion that nobody wants to have until we actually see his shadow.

He is Deflation; painful, all-consuming, watershed Deflation. While the mainstream media continues to monitor inflationary pressures-and yes, this exists in some corners of the economy-this particular Phantom won't discriminate between victims."

Indeed, with the CRB off 25% since July, it's hard to argue against the fat lady clearing her voice.

All of this leads to one, simple question: Is the Big One Coming?

Old school Minyans know that I don't pile on. I like to fade conventional wisdom, sell hope and buy despair. Such was the case into the highs in crude, the Bear Stearns abyss and the July 16th trading low.

With that said, I'll continue to preach discipline over conviction, risk management over reward chasing and capital preservation, debt reduction and financial intelligence as core tenets of any approach across multiple time horizons.

The destination we arrive at pales in comparison to the path that we take to get there but make no mistake, once we arrive at the doorstep of the "outside-in" recovery, there will be far few players left on the field to prosper in kind.

Let's make sure ye faithful are among them.

Some Random Thoughts

And Finally, It Must Be Said…

Minyanville was born seven years ago today. As the towers fell, the 'Ville rose like a phoenix from the scorched earth.

It wasn't an easy journey-in fact, it literally took everything I had-to stay on track and remain true to the vision of financial infotainment from the ABC's to the 401(k)'s.

I mean honestly-a cartoon bull and bear as metaphorical representations of market forces? Some people thought I went to one too many Grateful Dead shows.

As Larry Kramer told me in 2004, "I don't know Todd, I love the content and I dig the critters but what is it-a dessert topping or a floor wax? Is it an entertainment company or a financial content provider? The whole thing seems so unconventional"

"If it were conventional," I countered, "Somebody would have already done it."

What's my point?

The only difference between genius and madness is acceptance.

The jury is still out, I know, but one thing is for sure-none of this would be possible without YOU.

On this day, I offer my sincere gratitude that you've found Minyanville.

A dream is only as powerful as those who believe in it.

Our community is growing every day, spreading throughout the world like a benevolent virus.

We've always believed that you're a reflection of the company you keep.

Thank you for keeping our company.

May peace be with you.


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