Stock Market Crash Shakes Market Credibility
While psychology is amorphous, it's paramount to our increasingly fragile global construct.
There are alotta smart folks out there trying to finger the culprit behind yesterday's Scary Mary 1000-point drop. I scribed a pretty detailed vibe that was supposed to post last night when out of the blue, I got a call from Bloomberg asking me to appear on their "Crash Special" at 6pm. "I'm wearing jeans, sneakers and a tee," I said as I rubbed my fingers through my disheveled hair, "and I haven't shaved this week." "No worries," was the response, "come on over!"
I've got mad respect for Bloomie -- I've said it before and I'll say it again. When it comes to the integrity of mainstream financial content, they're best in breed from where I sit (and Minyans know my opinion has never been for sale). Long story short, there are certain things you don't say no to (peanut M&M's, a back scratch, Petty tickets, the top dawg at Bloomie TV) and the article that was set to post -- and the attendant traffic, which woulda been snazzy -- was pushed to this morning. Here it is, for those who care about such things.
Of course, it may be as simple as a five-pound former kitten. As posited early Tuesday morning:
The Crash Index! In mid-January, "Crash" the cat was adopted and the S&P dropped 5% in three short days. This morning, "Crash" went to the vet for his 'snip & clip' and the market is responding in kind. Coincidence? I think not...
Yesterday afternoon, as the schvitz hit the fan, we offered the following vibes:
If we rip rally higher tomorrow after "Crash" returns home, we may have to throw that young lad a parade. The "Crash Index" will secure a spot alongside the Sleep-O-Meter, Out-of-Office indicator, First Move-False Move (after the FOMC), contra-hour, and Turnaround Tuesday in the Nonsensical Idioms That Actually Work Hall of Fame.
I kid you not, when I walked into my apartment, the S&P futures were off five handles; this morning, they're indicated up eight (don't blink). It -- and, by extension, he -- is a bit freaky but then again, he's mine... are you really that surprised?
Some other top-line observations, in no particular order:
The nuts and guts of my "what, why and how?" column? It doesn't matter, the market, by definition, crashed yesterday. It stopped working. That brings to bear credit of a different kind -- that of credibility -- which we've long maintained is the issue at hands for markets at large. While psychology is amorphous, it's paramount to our increasingly fragile global construct.
With the pre-market S&P futures "in and around here," (up 8 handles) the easy trade today could be the first fade lower. From there, there will be a LOT of noise; if (and this is the biggest IF of the year) Hoofy and Stella can't get their groove back by midday, it'll set the stage for some late-day rage (if the markets trade free, of course).
I heard some pundits proclaim that yesterday was a capitulation with the Dow down 1000 and the VXO spiking to 40+. Silly rabbits; nothing traded down there and what did trade will be taken off the tape. That's not capitulation; capitulation is when you know you're selling in the hole and you just don't care.
Overnight sovereign spreads were -- anyone? anyone? -- wider, by and large, with double-digit widening from Denmark to France to Ireland to Sweden. (But you're wearing Lederhosen?)
Lest you had any doubt politicians and speculators are in an all-out war, check out the 'tude of German Chancellor Angela Merkel, who offers "speculators are our adversaries" and "I am firmly resolved--and I think all my colleagues (read world leaders) are too -- to win this battle."
I'm back to Bloomie TV today at 10:38 EST. Don't they know I have a face for radio?
I'm hearing from a LOT of Minyans who still haven't heard back from their online brokers where or not their orders "stand" from yesterday. Once upon a time, "uncertainty" was unequivocally bearish; keep that in the back of your crowded keppe as we together find our way.
Please join our Facebook Page, point your mini-Minyans to Minyanland and sport some critter garb proud (or pick up some Critter Bobbles!). Not sellin', just telling; the first two are free and critters tees are an eye-popping ten bucks each!
Today is the last day in our midtown digs before we move to the fifth iteration of MVHQ. Fokker and I started in a single room at 399 Park Ave, the critters moved to a small cubby on the 10th floor of 800 Third Ave (Fish, Bill Meehan, and myself), migrated to the ninth floor (a larger space, where we spread our wings) and shuttled to the third floor, which we've now effectively grown out of.
Starting Monday, for the first time in nine years -- since those fateful downtown digs -- I'll no longer be a stone's throw from Chez Harrison. Park Avenue South here we come; the next phase of the critter craze. Thank YOU for being part of our journey; we aim to make you proud.
Good luck today.
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