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Random Thoughts: It's Greek to Me!


Sovereign concerns emerge anew.


I edged into work this morning after my (former) trainer blew me off for the second time this week and began my daily ritual of assimilating the global landscape.

As I absorbed the headlines -- Portugal and Spain and other Eastern European markets are getting hit on Greek contagion concerns -- and nose-scrunched the futures ("good" earnings news from Cisco (CSCO) is being sold, much like Intel (INTC) and JP Morgan (JPM) before it), I meandered to The Exchange that followed my Random Thoughts yesterday.

As we're a transparent community, and the thoughts were shared in a Minyanesque manner, I would like to quickly address a few of the comments. In particular:

"The bent in Minyanville that we just need to put [this] behind us I believe short circuits the corrective process.

That, in my view, is a far greater problem with much more dire consequences than anything Todd and the others imagine would result from holding their Wall St. brethren accountable."

Spoken like a gentleman and it deserves the respect of a candid response, which I offered in kind and summarized below:

"To be perfectly clear, my message has never been to "protect" my "Wall Street brethren." I've LONG said that the lens of culpability extends through Wall Street, as well as Main Street, K Street and Capitol Hill. To those who transgressed or worse, broke the law or practiced fraudulent behavior, there must be full circle accountability; there must be a price to pay.

That is a VERY different discussion that tossing an entire industry into a pile of kindling and lighting a match. While we can agree there needs to be a more austere compensatory curve, we cannot forget that there is quality human capital in the financial sphere and they need to lead a progressive charge, not collect acorns and squirrel back to the safety of their tree.

Please let's not forget that I--and MV as a whole--was "wary" (to put it mildly) of Wall Street in the years leading up to the crisis--in fact, I don't know of any other media outlet that
called out the worlds largest financial institutions as we did, going so far as to labeling them insolvent (should level III assets move back on their books).

MV is a unique community in that we operate, by and large, sans acrimony. I can assure you that's not the case elsewhere; in fact, the "tricky trifecta" from societal acrimony to social unrest to geopolitical conflict remains on track--and that's in NOBODY'S best interest.

Alas, I digress; I wanted to clear up any mis-perceptions there may be. It's not always easy, this "voice" thing. Folks didn't wanna hear that a storm was coming when the DJIA was at all-time highs and they shoot to kill at any semblance of optimism after the first wave of crisis arrives (and yes, I believe more waves will follow).

Thanks for your time, sincerely; we'll find our way together."

Some Random Thoughts:

  • Remember the "financial dike" analogy we used yesterday? Sovereign wideners overnight include Switzerland (+13.6%), Netherlands (+13.22%), Portugal (+11.74%), Norway (+9.98%), Germany (+9.94%), and France (+9.9%).

  • Why does that "matter"? You mean other than the $500 trillion+ of derivatives that are tying together this fragile world? Issues in the EU will likely (should) trigger a "flight to safety" in the US Dollar, which could force an unwind of the crowded carry trade and pressure risk assets such as stocks and commodities.

  • We're always early in the 'Ville, but keep an eye on the "" dynamic we spoke of months ago. One could argue that political bubble is a "credit card" of a different sort and once that faith erodes, the next phase of crisis will have officially arrived.

  • That's not to say I wanna see that, mind you. There's optimism, there's negativity and there's realism. See it for what it is, void of emotion.

  • What's not to like about Jack Bauer? He's tough, caring, and attempts to save millions of lives every single day. My concern is that he doesn't eat... or sleep... or have any semblance of a social life (balance). Come on, JB; Teri would want you to be happy.

  • If you haven't already, take a read through Jeff Cooper's column The Market Hits a Point of Recognition, as we published it from his subscription newsletter for free this ayem.

  • Keep an eye on the Nazzy which, as it stands, is tracing out a third lower high.

  • We've got the good (CSCO), the bad (sovereign default concerns) and the unknown (Beeks tomorrow). That's the three-dimensional crosscurrent that'll set our sail today.

  • Green beans include American Express (AXP) (off a strong Visa (V)?), Amazon (AMZN), Home Depot (HD), Research in Motion (RIMM), and Broadcom (BRCM).

  • Prius: Justice or veiled protectionism?

  • Initial jobless claims popped higher than expected this week and that's garnering some headlines. For what it's worth, I don't pay much attention to this weekly report as the trend is entirely more important.

  • You say "jobless recovery," I say "chocolate diet."

  • S&P 1080-1120 remains the range in play. I lightened some exposure on Monday's pop through the former and put it back out yesterday into strength, as discussed in real-time on the Buzz & Banter. I'll continue this process today as a function of price and with an eye towards defined risk above.

  • Good luck Minyans; let's do this.


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