Tuesday Morning Quarterback: Gimme A Break!
The destination we arrive at pales in comparison to the path we take to get there.
The second option is that upside inertia takes the tape to S&P 1120, which is its downtrend from the 2007 top and a precise 50% retracement in it's own right. That's a 10% move from current levels for those keeping score at home, and a viable option as we see both sides and manage risk accordingly.
One Way or Another is a great Blondie song but offers little in the way of financial insight. What I can say with a high degree of confidence is that this rally is cyclical rather than secular. In other words, if our government bought the cancer and sold the car crash, it's an intuitive assumption that the cancer victim won't hop off the operating table and immediately run a marathon.
Circling back to the waiting room at the Hospital for Special Surgery, I was asked how much longer "this" could last. My response -- consistent with what I've written on Minyanville -- is that, "the new bull in credit" aside, "it" could manifest in many ways, as it has since the tech bubble burst, triggering a stealth recession masked by the lower dollar and skewed by the spending habits of a slimming margin of society.
Remember when recession was considered anathema and the business cycle "stepped aside" to make way for the new paradigm? Energy isn't created or destroyed, it simply changes form and we would do well to remember it's never wise to mess with Mother Nature, particularly when our financial fate may no longer be in the hands of our policy makers.
Water pistol to head and operating under the assumption that "this" started at the turn of the century, I would venture to guess we're half way there. That doesn't mean there won't be monstrous rallies and massive opportunities along the way (as 2009 has aptly demonstrated) but in terms of the BIG picture, my humble view is that we're 5-7 years away from truly fertile fields where those who exercise financial staying power will be in a position to scoop dollars for dimes.
That doesn't make it right but on my name and word, it makes it honest.
A quick note to the corporate boards of each of those chocolate companies: If you would like an adviser who is willing to be paid in kind, please contact me directly.
Snaps to everyone at MVHQ and the entire Minyan community at large for winning the First Amendment Award for Outstanding Journalism: Best Financial Media Outlet. That'll look quite nice sitting next to Hoofy & Boo's Emmy Award.
We did make it to Red Rocks before the bumpy ride home and for those interested, this was the splendid set-list from the CSN show.
It's nonsensical but true: fund managers would prefer to lose money on an absolute basis rather than relatively under-perform. Keep that in mind as we edge towards year-end.
Markets are no longer natural; they're managed. The question thus becomes, if it's in the best interest of the collective, will it be allowed to continue? And if that's the case, can it still be called free-market capitalism?
So, lemme get this straight--banks either have to raise another $300 billion in capital or drop $5 trillion in assets?
A lower dollar is a necessary precursor to -- but no guarantor -- of higher asset class prices. With that in mind, please keep an eye on the greenback as it again probes critical support.
Gotta get this puppy out before thy opening bell tolls. It's good to be home, Minyans, let's get this party started right.
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 firstname.lastname@example.org.
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