Random Thoughts: Can You Rinse and Repeat a Bubble?

It’s a busy stretch for the world at large as we ready ourselves for The Most Important Week of 2010. Given the information overload, I humbly offer these random thoughts for those who prefer to consume media in such a manner!

In no particular order:
 

• Imagine what happens to free trade -- and the cost basis of shipping -- if borders are forced to scan all commercial cargo?
  
  
• I read a tremendous missive written by Paul Tudor Jones II titled, A Tale of Two Policies. It offers insight on the benefits and ramifications of QE2 vs. a two-year bilateral 30% revaluation of the Chinese currency against the dollar.
  
  
• Remember in June when we asked, Is Quantitative Easing the Last Gasp Bubble? I will offer that even if we're about to blow the blow-off bubble, we should see a shake-out first, given the anticipatory run-up.
  
  
• The interesting thing, at least to me, is there are few folks in the 'middle ground.' On one side, you've got the Bubble Boys and on the other, the Depression Heads.
  
  
• With respect to our stair-step approach to the market, S&P 1188ish has been a level bandied about by market technicians. Please keep it on ye radar as we tickle it this morning.
  
  
• Ambac Financial (ABK) missed an interest payment on a 2023 note and hasn’t been able to raise additional capital as an option to bankruptcy. The company has announced that it is pursuing -- with an ad hoc committee of senior debt holders -- a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding, according to Bloomberg. Why might this matter? Three words and one hyphen: Counter-party risk.
  
  
• A snapshot of today's tape finds positive breadth, a tame dollar, and a few Debbie Downers (Wells Fargo (WFC), Deutsche Bank (DB), Amazon (AMZN), Texas Instruments (TXN), UBS (UBS)) littering the November landscape.
  
  
• Are strategic defaults the manifestation of the unintended consequences of moral hazard?
  
  
• Remember when Bennet "Blue Steel" Sedacca had that discussion in 2007?
  
  
• What company will be the modern day Microstrategy or American Home Mortgage?
  
  
• How many times can you rinse and repeat a bubble?
  
  
• Under-employment is roughly 20% and the chasm between the haves and have nots continues to grow. Why wouldn’t the well-heeled host the most expensive party in the history of the world?
  
  
• Do you see 2010 chart of the S&P forming a potentially bearish double top? In particular, please note the "Mini-Me" pattern that took place in June and August. That worked out nicely for a trade as we spied it at the time.
  
  
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• There's always risk, my friends. If there wasn't, it would be called "winning" not "trading." Case in point, the NDX was tracing out precisely the same pattern -- a long-form double top -- and blew through it like a hot knife through buttah.
  
  
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• While Boo might choose to fade (short) the tape with a stop on the other side of the spring high (defined risk is our friend), Hoofy can conceivably lean against the N's on a retest of the previous top and play for the year-end performance anxiety ramp.
  
  
• Different strokes for different folks. We're not here to tell you what to do but quite hopefully, we're helping you do what you do better (if that makes any sense).
  
  
• I found myself standing outside Brother Jimmy's BBQ in NYC yesterday as I walked two Shipoos named Truffles and Fudge. There's something oddly askew about wearing silver and black and mouthing encouragement to my beloved Raiders through a glass window as two lap dogs patiently wait to walk home. Given Oakland outscored their last two opponents 92-17 (not a typo!), I would repeat the same scenario this week if I wasn't gonna be in F-L-A for the Maven's 90th.
  
  
• Festivus 2010 is 32 days away! If you dig the Beatles, Petty, Journey, and Dead, all-you-can-eat BBQ, top-shelf libations, blackjack, silent auctions, thought-leaders, and a great community -- all in the name of helping tomorrow's leaders lead a better life -- please join us on Friday, December 3rd in NYC. It's a stone cold groove!
  
  
• Is the entire QE2 debate more about timing than consequence?
  
  
• Can I share that we finally circled a title for the skeletal structure formerly known as Memoirs?
  
  
• Does anyone find it amusing that Wall Street hones in on a singular "event" that is the most important thing ever... until the next one arrives?
  
  
• Are you still watching Apple (AAPL) $300?
  
  
• Where specifically is the weirdest place you've gotten the urge to make whoopie?
  
  
• Do you think News Corp (NWS) that the Yankees didn't make the World Series?
  
  
• If gold is a modern day JDS Uniphase (JDSU), what price would it currently be trading at?
  
  
• Minyan (and friend) David has been riding gold higher since around $500/oz. My advice suggestion to him? To sell a third of his holdings, ride the balance for "free" (trailing stops are always smart, depending on time horizon), and let your first sale be your worst sale!
  
  
• How do pharmacists fit those little bottles in the typewriter?
  
  
• If sovereign lifeguards saved corporate America in the first phase of the financial crisis, who is gonna save the lifeguards?
  
  
• If I announced a 10:1 reverse split, will I only weigh 22 lbs?
  
  
• QE53 anyone? The Globe and Mail takes a peek at The State of the States.
  
  
• If I were a Hussman, yada dada dada yada dada yada dada yee...
  
  
• Wanna see a video of me at the gym at 6am this morning?

R.P.

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