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Random Thoughts: Summing It Up Into the Hump


A lot of action to digest into the middle of the week.


Editor's Note: The following content was posted in real-time on our premium Buzz & Banter and is being shared here for the benefit of the Minyanville community. See also Answers I Really Wanna Know: Should I Stay or Should I Go Now?, Morning Dew: The World Waffles and Russia Halts, Random Thoughts: Treading Into the Fed and Why Wall Street Will Never Be the Same.

Like a moth in a lightbulb factory... - 2:33 pm

  • The government is trying to administer some tough love but the market is extremely fragile.

  • Anyone wanna venture a guess as to when the emergency rate cut chatter starts?

  • By NOT cutting rates, are they signaling that they'll somehow participate in an AIG (AIG) backstop of some sort?

  • The credit markets are getting worse-not better-and in the absence of an interim solution, equities have room to the downside.

  • To Minyan Peter's earlier point, check out Constellation Energy (CEG), which is down 40%--forty percent--as a function of counter-party risk to Lehman Brothers (LEH).

  • The first move is the false move?* I've added the asterisk for obvious reasons.

  • The counter-party risk at AIG makes Lehman Brothers look like a pimple on an elephant's ass. Something needs to be done and soon.

  • The most likely scenario is a solution to buy time-a conservatory or something similar to Resolution Trust Company. That's why two-sided risk remains-the announcement of that would spark a short-squeeze at the expense of the dollar.

  • Deep breath Minyans--we'll tell our grandkids about this market one day. Well, I suppose I've gotta have kids first. Or a wife. Geez, does Daisy count?

  • Smile--try it, seriously--it'll likely help.

Is the Fed reading Minyanville? - 2:41 pm

In the 2:33 post, we asked if the reason the Fed held pat was because they were preparing a loan package for AIG (AIG).

At 2:38, we got our answer.

This is wilder and crazier than Steve Martin on crack.

At first I didn't have the will to carry on, illusion in my mind... - 3:04 pm

  • If you missed Pep's "Theme" for 2008, it's worthy of a reprise.

  • I love to trade. Lord knows I do. I've made a living on capturing the disconnect between perception and reality. Risk is my friend and danger is my middle name. All that and more.

  • But this tape? It's the quick and the dead, man--it's nuttier than a fruitcake and trippier than Bob Weir on his best day.

  • It's a recipe for doing less and trading smaller, regardless of which way the fray plays out. "Prints" in the S&P are three, four handles wide--you see that, right?

  • If only this were the early seventies, we'd be fine like wine and diggier than Dirk.

  • So, AIG bought itself some time? Two questions---first, can I please have that 25,000 shares at $1.60 back? Second, OK, so that's AIG (AIG)--and it's an incremental positive--but what about 1) Lehman (LEH) counter-party contagion and 2) the next leak that springs in the dike? I guess we'll cross that bridge when we jump off it, or something like that.

  • Holy Guacamole! JPMorgan (JPM) advanced $138 billion to Lehman Brothers after it filed for bankruptcy?

  • Wow, it's threezers already--I've gotta power up for The Truman Show. Looks like that bathroom break (from Monday) will have to wait yet again.

  • Hey, here's an idea--we spoke about what the next-gen Wall Street will look like. Do you think we can petition to have urinals installed in those turrets?

  • Fare ye well into the bell, Minyans--we're almost at the Hump.



No positions in stocks mentioned.

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

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