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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.

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Position in C and PHM.
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