It's a time for reflection and sticking together.
In what could very well be the most intelligent thing I've done today, I unhooked myself from my turret after my morning television hit to step outside for a breath of fresh air.
And you know what? The sun was shining. Autumn was upon us. I even saw a rather large gentleman wearing a Raider jersey. I walked up to him and shook his hand. "We gotta stick together," I said, and we actually shared a smile.
Truer words have never been spoken.
As I synthesize this historically significant event, a few items have begun to crystallize. I'm unsure if these are value added ideas but as we figure things out together in the 'Ville, I share them without vice or virtue.
- One of the unintended consequences of this latest action to help Wall Street will actually hurt Wall Street. The hedge fund community will shrink considerably and with it, so will trading commissions.
- I don't profess to know how long this synthetic bid will last but it will remove an integral layer of demand in the marketplace. Once the life is squeezed out of the shorts--quite literally--the risk to the downside will perhaps be greater than during any time in history.
- The free market system is officially broken. The powers that be cried Uncle Sam with hopes that this initiative will allow time for it to repair itself. The underlying disease has not been cured, it's simply been (oxygen) masked. As John Bogle said in the segment preceding mine, this will take years to sort itself out.
- Many on Main Street are blaming Wall Street and their angst is understandable. What isn't being discussed is the immediate gratification, consume now and pay later mindset that contributed to the structural imbalances. That's the other side of zero percent financing we've been talking about.
- You say you wanna revolution? Make no mistake, we're a country at war. It isn't a war against short-sellers, it's a war for global financial survival. Expect societal acrimony percolate as people place blame and duck shame, particularly into the election.
- I will again share that I'm not a bitter critter chewing on sour grapes. I wasn't short, nor do I run a hedge fund anymore. My stressful sadness is a function of channeling the world through my heart and wearing it on my sleeve. The stakes have been raised, for all of us, our children and perhaps their children beyond.
- This too, shall pass. As Minyanville's resident elder Charlie Mangano offered this morning, the pendulum of change has swung throughout history. We (he) saw similar government initiatives during the Great Depression and over time--over many years--they eventually self-corrected.
- Yes, we will get through it. No, it won't be easier. It is, however, the hand we've been dealt and we must play it in kind. I will say this--I am thankful we have a community such as Minyanville to assimilate these wicked crosscurrents. I couldn't possibly imagine trying to navigate these choppy waters alone.
- As always, I hope this finds you well.
The doors to Festivus 2008 are officially open! Lock your spot for the critter trot as last year's soiree sold out. This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.
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