Random Thoughts: Keep Your Dogs on a Tight Leash
Can you imagine what happens when the credit mess isn't as stealthy?
The following took place on the Buzz & Banter earlier today and is reprinted here for the benefit of ye faithful.
Gate Sniffage - 10:06 AM
- Please read Mr. Practical's take on the Citigroup $58 billion SIV swallow. It's smart reading, as you would come to expect, and maps the risks, not only for Citigroup but as a broader proxy of what ails our finance-based economy.
- If you see that, respect it and still wanna trade this puppy from the long side, you might wanna use the recent lows ($29.60) as nice and tight defined risk. You can do anything as long as you're disciplined and never to rationalize your risk. I'm trying that side, so you know, with that level--along with BKX 90--as my risk definition.
- Watch Google, RIMM and BIDU as performance anxiety plays. Please and thank you.
- After Duran Duran and STYX, I'm fighting for my pop cultural musical reference credibility today. This, I know--I won't let you down.
- Back to the financials for a moment, I foresee hedge funds absorbing investment banks over the next five years. Full circle, in many ways, and a deeper delve for another time.
- HGX 140 remains the ripcord on my Pulte Home call attempt. I've got April paper, so you know, but I also have more discipline than conviction.
- Good luck Minyans, let's end this freak with some jingle in our jeans and a smile on our puss.
Alone, listless, breakfast rally in an otherwise empty room..... - 10:56 AM
- Mr. Greenspan needs to take two classes: Geography and accounting. Indeed, Denial is not a river in Egypt.
- I mean, come on sir, YOU pushed adjustable-rate mortgages into the mainstream consciousness. Take responsibility for your role in this mess. You'll feel much better in the morning.
- Note the greenback as it slaps on a percent and remember that, through the lens of "asset class deflation vs. dollar devaluation," this doesn't help Hoofy's holiday plans.
- Cliff Branches today? No, not Randy Moss. Grrrrr! Goldman, Lehman and now, Citigroup. The cyclicals also trade 'aight, as does select tech, including DELL, CSCO, MSFT--holy cow, old school!!!!--and Apple, BIDU, Google and RIMM.
- The not-so-hot trotters? The homies (O-Dog must still be hungover from last night), energy, metals and pharma.
- Is it me or was the whole Seattle grunge movement short lived? I mean, stepping back to Black for a moment, they forever changed the face of music. If more of us just came as we are, the world would likely have a lot more soul.
- Crazy how BKX 90 held, eh? That Citi Schnitzel, so you know, is a PURE trade. I have no interest in holding these names over the long term and, further still, think funds will wanna get 'em off their sheets into year-end. So...why am I long it? Oh yeah, just trading (and gonna feed ducks as a function of discipline).
Answers I Really Wanna Know - 12:51 PM
- Aren't CIEN and CKE proof positive that the ripples of a finance-based economy run deep?
- Can you imagine what happens when the credit mess isn't as stealthy?
- You know, when all that zero-percent financing comes due?
- That's sorta what Bank America said when it messed its bed this week, right?
- That auto loans and credit card delinquencies are part of the inevitable progression that occurs during a debt unwind?
- Is it time to start paying attention to that dandruff in the metal shares?
- Particularly as the dollar continues to pick up some upside mo'?
- Top-line closing performance aside, is anyone else monitoring the deterioration we've seen in market internals?
- And isn't that a warning flare for as long as we "churn" under S&P 1490?
- So why am I trading Citigroup and Pulte Home from the long side (through calls, with defined risk)?
- Because, as traders, the destination isn't as important as the path that we take to get there?
- Given the potential for a not-so-hot trot lower into the close, doesn't it make sense to lighten or tighten the pure upside trading tries via rolling up stops or reducing position sizes? (Yes.)
- Who rapped Going Back to Cali better, Biggie or LL?
- What's the most embarrassing moment of your life?
- Should I share mine during Christmas week, just for those who are sticking around?
Buzz in the Afternoon - 1:59 PM
- I'm a rebel Dottie! How else can I explain the bacon cheeseburger, crispy fries and strawberry shake that are now hanging over my belt?
- Woof! I've tightened the leash on my trading risk as the combination of A) market internals, B) the southbound soiree under S&P 1490 and C) "As goes the piggies, so goes the poke" is making me feel funnier than that rope in gym class.
- Did I mention D) the dollar is at session highs and I feel strongly that the dollar AND asset classes can't rally in synch?
- How bout E? He's always running in Vince's shadow, the poor guy. I really hope his talent management company works out. Maybe he'll hire Turtle?
- Interesting Op-Ed this morning through the lens that the reaction to the news is more important than the news itself. So yeah, the fact that we're only 5-6% off all-time highs in the S&P could very well mean that we've got a heckuva rally coming.
- Or, it could mean that the powers that be have been very active.
- Whatever it means, I will say that there sure is a lot of tension, agnst and acrimony considering that we ARE 5-6% from all-time highs. Imagine how tense everyone would be if the markets were actually down on the year?
- Welcome to the finance-based economy, Minyans, where we're ALL only as good as our last trade.
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 email@example.com.
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