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Randoms: Perspective Directive!


See the world with your eyes wide open.


Following one of the wilder wire-to-wire 24-hour stretches in recent memory, I return to my turret with a few thoughts in mind. As there's a lot going on, lemme share them in no particular order.

First, mea culpa to ye faithful for my fragmented feel of late. In addition to the twists and turns and market burns, we've been furiously working on massive Minyan initiatives, projects that will help shape the next-gen iteration of our community. We don't make excuses in these parts--my feel has been chillier than Willy--but truth and trust are our core ethos and a little communication goes a long way, or at least that's what my therapist tells me.

Second, yesterday's day away from the tape--which, while slammed with multiple meetings--was a welcome respite from the flickering ticks. Often times, while constantly sitting in front of (eight) screens, it's easy to get sucked into the forest while trading the trees. For those feeling the heat or just generally stressed, I highly recommend it, particularly if you haven't taken a true vacation in a while.

What were some of the vibes behind my eyes when I wasn't hanging with dogs and ponies? Glad you asked...

In the digital sphere, traditional networks are channels and the new networks could be the portals, be it AOL (TWX) (Tim Armstrong is on a mission), MSN (MSFT) or Yahoo (YHOO) (bite size video nuggets are digestible and easily monetized). The word "convergence" has been floating around for some time but we're not far from the day when consumers will construct a customized content portfolio on the television screen, sourcing both online and traditional media. Agile content--not Jaffe Joffer--will be king for a mighty long time.

In terms of the tape, the chase for performance is on with quarter-end a scant few days away, and Shallow Hal has offered little in the way of two-sided trading. While my risk has been pared, I continue to operate with a raised eye and underlying gamma, as I foresee out-sized volatility into year-end. "Respect don't defer," has been ruminating in my crowded keppe, particularly given the lesson learned in 2003.

Which brings me to my final point---there have been many analogies of late, comparing this market to either 1930, 1932 or the 1970's. For me, perhaps because I actually traded through 1999 and 2003, I respect the potential for further upside (that's what credit markets are telling us) but steadfastly maintain that the DNA of this market is vastly different than either of those years.

Why? In a word, the imbalances are cumulative and the lessons have been fleeting.

Risk, as Minyan Peter has written, hasn't been eliminated; it's simply changed shape as it shuttles between the public and private sector. Whether we've "successfully" transferred those obligations to future generations or foreign holders of dollar denominated assets throw a flag remains to be seen, but the underlying tension is thick.

As I recently wrote
, if they could extricate themselves from the tangled 3-D web (debt, dollar and derivatives), they likely would have already done so. The obvious question is therefore begged, how will this manifest? My fear is that it won't be measured in plus ticks or 10-Q's, it will be entire That's not today's business but it's something to file away for a future day; it will matter.

S&P 1120
is the next tangible resistance level but be wary of trap doors into quarter-end, for it's a scenario few folks are allowing for. Expect the unexpected, think positive and remember to maintain perspective. As a close friend of mine (who is going through a difficult stretch in his own right) told me last night, as I checked on his well-being, "It could be worse--there's famine in Kenya." True dat.

Some Random Thoughts:

  • FOMC days are notoriously a tale of two tapes, with 2:15 serving as a toggle. Also, please remember that the first move is typically the false move following the announcement.

  • MVHQ is nestled a block away from the Waldorf Astoria, where many world leaders, including our president, are staying this week. The words "police state" come to mind as hundred of policemen, secret service and snipers litter the landscape. I "get" the need for security, of course, it's just extremely tenuous.

  • You remember the word "cumulative," don't you?

  • The question I wrestle with is when investors wake up to the fact that they're lugging the same risk they purged. Denial, migration and panic, if nothing else, is a virtuous circle, albeit one that often elongates much further than many suspect.

  • The master beta complex-Google (GOOG), Research in Motion (RIMM), Apple (AAPL), Baidu (BIDU), Amazon (AMZN)--remains the best proxy for performance anxiety into both quarter and year-end.

  • Speaking of perspective, if the S&P-after this massive, monster move-rallies another 5%, it will be back a very defined trendline of lower highs. Crazy, right?

  • I haven't touched American Insurance Group (AIG) with a ten-foot pole but I can't imagine that type of volatility is a healthy dynamic, for the stock or the market as a whole.

  • This is a great interview with my buddy Bobby, the dude who "The Philanthropist" was modeled after. His stories are truly amazing and this book--when it hits the stand--comes highly recommended. Never underestimate the power of a positive pebble.

  • T-minus 72 days until our annual Festivus to benefit children's education. With three live bands (Stones, Beatles, Dead), all-you-can-eat BBQ, open top-shelf bar, casinos, choirs and the heart of the Professorship on tap--and the last three events have been sold out--why not lock your spot for this year's critter trot?


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