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Random Thoughts: Weighing the Fray on Turnaround Tuesday


Tough to make odds and ends of this tape.


Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Squeeze or Wheeze?

Gate Sniffage - 10:12

  • Kevin Depew just hit me with this. Man oh Manischewitz, talk about a new world order!

  • Whataya say, Vuja De? State Street Bank (STT) (-5%) is creeping back into the collective consciousness.

  • Don't we need to see the hard press lower (again) before the specter of sustainable jig enters the probability spectrum?

  • Do you think it's a problem that I've now had more cups of coffee than hours of sleep last night? We're not talking models and bottles, baby, it's pure focus on our mission in the rain at the precipice of pain.

  • Market breadth? Even Steven in the NYSE and NAZZ. Nice.

  • Note the relative strength in the consumer non-durables such as General Mills (GIS), Coca Cola (KO) and Proctor & Gamble (PG). While we were high on this horse at the beginning of the year--before they sprinted to 52-week highs, mind you--I'm actually sniffing out the short side (as a function of the spike in input costs (which will negatively impact margins).

  • What's clear is that few, if any, policy makers understand the depth of the derivative dangers.

  • Hey, maybe we should start a new party? Democrats, Republicans and... Minyans?

  • Holy Cow, I feel like Magda on crack running on a hamster wheel. Lemme hop to chew through the dew and shape the clay that is my weekly, syndicated column. Good luck today, Minyans, and let's be careful out there.

Bullets over Broadway - 11:03 am

In what was my only two hour respite from reality since Sunday morning, I snuck to physical therapy last night to tend to my post-surgical knee. As I was warming up on the bike (checking my BlackBerry), the gentleman to my right laid into his trainer for a full ten minutes because he was five minutes late.

It was a nasty expletive-laced tirade, one that continued far longer than it should have, and I pretended not to notice as I glanced out the window to see the SWAT teams and police barricades in town for the U.N. I couldn't help but think to myself that societal acrimony was no longer percolating--it officially arrived like a clap of thunder.

I, for one, am taking extra care to be pleasant to those around me. I walked up to a cop this morning, shook his hand and said "thanks for all you do." I smiled at an elderly lady in the elevator last night and asked her how her day was (it wasn't good). I sidestepped a snarky swipe an hour ago, choosing to let it go rather than escalate it with a response.

I don't claim to be a saint and I make plenty of mistakes (just ask my ex-girlfriends). Still, in both the markets and life, it's never too late to make changes that will positively impact yourself and those around you. I offer these thoughts as I listen to policy makers place blame and investors point fingers. What's done is done, my friends, we must now focus on the process of price discovery and future recovery.

We will return to the nuts and guts in short order but I thought this was an important point to make. Social mood and risk appetites shape financial markets and both are under siege. Remain lucid, operate with balance (yes, I'm a hypocrite) and remember above all else, this too shall pass.

As always, I hope this finds you well.

Nuts? Guts! - 11:21 am

  • We've seen some "natural sellers" of seven-figure blocks of EEM (emerging markets).

  • Gansta Gangsta? Did Hank Paulson really just say he "shares our frustration" with regard to CEO compensation? The dude sold half a billion dollars tax-free when he joined the Treasury. We don't do acrimony in the 'Ville (see the last Buzz) but I'm throwing a flag on that one.

  • Back to life, back in reality, the tape can best be described as tenuous as the financials lead the downside speed (Wachovia (WB) -10%, State Street (STT) -9%, Citigroup (C) -5%).

  • I would offer "as goes the piggies, so goes the poke" but there are numerous wildcards in the equation, including structural influences (short sale list, hard to borrow), faith in the system (foreign and mutual fund sellers) and the credibility of our leaders.

  • I cannot overstate the magnitude of the two-sided risk. It's a recipe for doing less--if anything at all--as we find our way to better trades and easier days. That's not to say we can't play and prosper, it simply speaks to the need of risk-management over reward chasing as a central tenet of operation.

  • Hey, if nothing else, we can always rely on Hef as a source of stability!


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