Random Thoughts: Petty Differences

"Minyanville has monitored these cumulative imbalances since 2006 and discussed The Writing on the Wall last summer.

"To be sure, the credit crisis has already infected the economy, starting with the homebuilders, spreading to the financials, engulfing financials in drag such as General Electric (GE), General Motors and Ford (F) and will eventually phase through retail, technology, credit card companies and commodities.

"That’s the orderly scenario, a stair-step through industries until debt is destroyed and a more sustainable economic foundation takes root. It’s akin to credit cancer and once it spreads through our entire financial body, we’ll be in a position to enjoy the globalization-themed “outside-in” recovery that awaits.

"The other option is an outright car crash, a collision where credit seizes, capital markets freeze, price discovery permeates and social mood shifts as we come to terms with the new world order.

"Neither of these options is something one would wish for but hope has never been a viable investment thesis. Indeed, my stylistic approach has always been to sell hope and buy despair.

"By some measures, the gloom and doom is palpable. Through a short-term trading lens, that could prove bullish, particularly if credit markets improve.

"Through a big-picture secular lens, however, denial is prevalent as most market prognosticators believe the worst is behind us. Heck, there are still debates about whether or not we’ll enter recession and that, in and of itself, is disturbing.

"As the owner of a small business and someone who shares your journey through life, it’s my sincere wish that we’ll navigate these complex times and look back at this column as the turning point of a multi-year, economic expansion that benefits us all.

"Until we’re able to view that process with the benefit of hindsight and a dose of humility, capital preservation, debt reduction and financial literacy remain core tenets of my particular approach."

• I’ve been trading some S&P exposure over on the Buzz. For that real-time content (along with 30 folks who are smarter than I am), join us for a gratis sniff of what we do on the other side of the fence.
  
  
• The internet is the single most deflationary invention of all-time; think about that.
  
  
• Do you know who we are?
  
  
• I believe the commodity volatility we’ve seen will precede equity volatility.
  
  
• Professor Peter Atwater's excellent missive on the willingness and ability of the sovereign lifeguards to dive back into the choppy seas of the next perfect storm is a must read.
  
  
• Thank you Minyan Alex—the runner-up for the MV Summer Soiree auction for the Ruby Peck Foundation—for scoring tickets to tonight’s Further show in NYC. Bobby and Phil, Phil and Bobby...it’s all good.0729&utm_
  
  
• Each and every session, we simply have to clear the mechanism.
  
  
• There are some constructive dynamics in play—decent rear-view earnings (70% of the companies in the MSCI World Index have reported better-than-expected profits so far in the second quarter, according to Bloomberg), a strong tone in credit (important), an up-tick in M&A, dividend increases and stock buybacks—and those positives must be respected.
  
  
• Trading hokie pokie (one foot in, one foot out) is a recipe for disaster.
  
  
• I love my new iPhone but I can’t help wonder if Apple (AAPL) will be targeted in societal crosshairs simply as a function of their success?
  
  
• Think about the companies that have fell pray to the Robin Hood Economy—Goldman Sachs (GS)—watch that $150 level—BP (BP) (for obvious reasons), Toyota (TM)…the list continues to build.
  
  
• Lemme hop; I’ll see YOU over on the Buzz. Fare ye well...