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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.



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