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Randoms: January Crosscurrents


Could 2010 be the mirror image of the 2009 scrimmage?

  • Credit watchers are quick to draw parallels to 2003, which provided ample fuel for companies to enhance shareholder value. Still, even the most ardent credit bulls note the financial system is wrought with fragility and are allowing for violent equity swings as perception and reality align.

  • Virtually everywhere I look and everyone I read is looking for the upside momentum to continue into 2010. The first two thoughts that popped into my crowded keppe are:

    • Could 2010 be the mirror image of the 2009 scrimmage (strong first quarter then watch out!)?

    • Do we need to see a ten percent correction before that comes to pass?

  • Pizza and chocolate may not be the only reasons I'm 25 lbs overweight-the lack of exercise, for instance, may contribute to the fact I can't see my feet-but it most certainly is a factor.

  • To that end, Ben Bernanke is either in abject denial or is a serial fibber if he believes free money" wasn't a causal factor of last decade's Bubble-mania.

  • We've previously discussed this. If we were ever allowed the business cycle to follow its natural progression -- and if "recession" wasn't considered anathema -- we would already be on the road to (real) recovery.

  • I caught up with my good friend Bill Fleckenstein for a schnitzel in Maui and we talked about his view (the same one we shared a few months ago). "We've already seen the crash," he said, "As long as the government has a printing press; the next question becomes the full faith and credit of the United States."

  • He picked up a dollar bill and a twenty and said, "These are both pieces of paper, yet we're conditioned to believe one is worth twenty times more than the other. There will come a point when that perception comes into question." As there are few people whose views I hold in such high regard, it was most certainly food for thought.

  • If Nike (NKE) drops Tiger, will it be a boon to its bottom line?

  • After fumbling this effort in November, I'm on a one-month cleanse -- no alcohol, sweets or bread -- with an eye towards 200 lbs (T-minus 28). Wanna join me?

  • If you trade or invest with ETFs, I highly encourage you to take a look at our Grail ETF & Equity Investor newsletter. Ron & Denny have made some nice picks and do a great job of explaining their strategy with each trade. And, hey, there's a free trial so no harm.

  • After an awesome and healthy respite, I was up all night sneezing and wheezing. I knew that kid sitting two seats to my left was carrying some sorta transmittable airborne infection. Either that, or I'm just pissed he kept beating me in trivia the entire flight.

  • I was burning the midnight candle at MVHQ working on my 2010 Themes, which we'll unleash tomorrow. One of the topics is the State of the States, which is admittedly a variation of last year's (shockingly early) muse.

  • Wanna coupla' cold hard facts? The Center on Budget and Policy Priorities estimated state budget shortfalls could reach $180 billion this coming fiscal year and the US public pension system is looking at a $2 trillion miss (or $2,000 billion according to the FT).

  • The tidbit that caught my eye? No, not Jennifer's Body -- I refuse to watch that movie cause it just seems silly -- it was the comments by Orin Kramer, the chairman of the NJ pension fund, who said, "If you factor in the reality of these unfunded promises, [their] deficits will rise exponentially" and "Public pension funds do not use mark-to-market accounting, relying instead on actuarial numbers that average out value of assets and liabilities over a number of years – a process known as 'smoothing'."

  • Can you imagine what a one percent variance would be on $600 trillion dollars of notional outstanding derivatives that still use mark-to-market?

  • It's Turnaround Tuesday in the 'Ville, although it remains to be seen if the 2010 sugar rush will allow that nonsensical notion to again play through.

  • With S&P 1120 underfoot, Hoofy has the hall pass to pad some gains but it's worth remembering that we're technically overbought and tactically vulnerable, with layered resistance on the S&P and the trendline in place from the bubble highs in technology.

  • The question, naturally, is whether this will be a repeat of 2009 (an initial 6% gain followed by 30% pain) or 2004 (following the 2003 hot popper, a 4% rally, minimal slippage, and sideways migration that crushed volatility for several years, frustrating bulls and bears alike).

  • Y'all see gold tickling the 50-day moving average (1121)?

  • Greece Lightening? Don't be surprised to see the EU start to distance itself from the weak links.

  • Does "As go the piggies, so goes the poke" still apply? If so, we would be wise to note the rounding top that's been quietly unfolding the last six months. Maybe something, maybe nothing--maybe a pterodactyl--but I would rather you see it and then choose what to do with it.

  • Isn't it ironic that after making it to the final 35 people, the Raider win at Denver knocked me out of a $30,000 suicide pool?

  • What if the government really is buying stocks?

  • Will you help me support a fellow Minyan as she cycles for survival on behalf of The Memorial Sloan-Kettering Cancer Center?

  • Note the relative lethargy in the high beta complex -- Amazon (AMZN), Google (GOOG), Baidu (BIDU) -- which may be under distribution after serving as bang-for-the-buck year-end performance anxiety plays.

  • As we edge into the New Year and realign our bearings, I'm operating with a relaxed grip on the handlebars (makes for a smoother ride) and a conscience effort to respect both sides of the current construct. I got away from that a bit on the back half of last year but as is often the case, some time away from the fray did wonders for my perspective, market and otherwise.

  • Join me and 30 of the best and smartest traders I know as we share our trading ideas and insights in real-time on the Buzz & Banter.

  • Fare ye well, Minyans; it's nice to be home.


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