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Market's Believe It Or Not

By

Surprises from Washington Mutual, Layne Christensen and FCStone.

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I'm slowly becoming desensitized to "Wow!" moments in the market.

  • The WaMu (WM) recap is definitely one: 100% dilution at some 30% discount. The broad media rationalizes that "that's good news" because the company won't go out of business: That's another "Wow!" moment.

    The WaMu news is about as good a reason in many moons - and there have been many over the last few years - to short Capital One (COF) as any. This is not just a credit card company: it bought two mortgage heavy outfits, Hibernia and North Fork Bank just about at the top of the market, because COF wanted to juice its lagging credit card business. So much for the best laid plans.

  • It took a bit of waiting but water equipment maker Layne Christensen (LAYN) has suddenly awakened from its slumber. With a current average cost of $37.25, I am bidding sub $40 for more. The conference call is ongoing.

  • My wife holds a bi-annual trunk show of wildly over-priced children's clothing made in Portugal (it sounds like the beginning of a joke, but it's actually true). The company-provided invite list is generated by data-mining those parents who never balance their checkbook because they really don't care how much money's in it, other than the fact that there's plenty.

    In four days she usually sells $22-25,000 worth of stuff. Yesterday was the first day and she sold $3,300. I'm not sure whether the "Wow!" factor was that she sold that much before or that sales plunged this much this time.

  • FCStone (FCSX) is moving up today on a Bank of America report that customer margin balances appear strong.

    FCSX, GFI Group (GFIG) and MF Global (MF) have been acting like death warmed over because of concerns of "margin" issues, and the overall market rebound's not helping either - never a good sign. That said, if there's any whiff of good news in this group, even the mere notion that they won't go out of business, these names could give Hoofy a "Wow!" moment.

    Bear that in mind regardless which way you might be leaning.
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Positions in FCSX, LAYN, COF.
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