I may have a tough week.

Jim Cramer flips out on CNBC. Priceless video (via Barry Ritholz).

Actually, I am worried. Friday’s NASDAQ close was ugly, Bear Stearn’s conference call about how they have no money to buy back stock, they need all their capital to weather the worst corporate debt market “in 22 years” freaked out everyone. Credit where it is due, The Dealmaker’s doom-laden canteen gossip turns out to have been a bit closer to the mark than Felix’s sanguine theorising (and er, mine, but let’s see what happens). However of course, there is no new credit, the debt markets have shut down, (which is the problem) so TED will have to wait to get his.

Some random thoughts, in the order thrown up by the stream of consciousness:

  • Do not dismiss Jim Cramer, as Barry’s commentators seem to. He might seem like an idiot but he is not. This man made himself rich picking stocks. I’ve followed him for 9 years and he has been righter on the big things than anyone else I have read. He is the anti-Lex.
  • My colleague picked a great time to go on holiday. I’m supposed to be fucking relaxing. Bugger.
  • Thank god we’ve been adding a little bit of index put here and there as we went up. But is 35% hedged in puts and cash enough?
  • We’re so oversold! VIX is so high! I bet if I add any more hedge we’ll rally bigtime and I’ll get my butt kicked. I’m not paid enough for this.
  • I hope Taleb’s fund starting trading already. If so, I hope this is not true of his current positioning: to generate short-term returns during times of low volatility, he also sells options very close to the current price of a security
  • Am I worrying too much? I picked a great time to start reading the Bookstaber book on imminent, regular financial crises, which TED himself refers to here. Sort of like reading a medical textbook in the first throes of a cold or flu — do you know how many fatal diseases start out with simple flu-like symptoms? Ebola, for one. 
  • Perma-bears are STILL NOT WORTH LISTENING TO, even if we drop 20% from here; remember, stopped watches are right twice a day.
  • It might be a great time to be a selective short, even after the reflexive puke of stock which I fear this week, and into the inevitable sharp rally at some point to come. If debt markets really have shut down for corporate issuers, the “private equity put”, which has foxed the shorts on a ton of crap companies, will have gone away for a bit. This likely also means bad news for companies with activist investors who have taken, or were planning to, major stakes with borrowed money. Motorola, this means you.
  • Is Xanax addictive?

Bento, are you alive, have you been kidnapped by the Cartesians?

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5 thoughts on “I may have a tough week.”

  1. All intraday moves since the 1987 crash have been meaningless. An intraday move accompanied by screaming from JJC is actually *more* meaningless, if that’s possible. I never theorized about the future direction of intraday moves, obvs. But if I had, I would have said that very large intraday moves are much more likely on the downside than on the upside, as ever.

  2. Felix my dear fellow, you said that the subprime meltdown would be contained. I agreed with you. We both seem to have been wrong, but you should be pleased; you couldn’t be in better company!

    Anyway I am not sure what constitutes an “intraday”move in the way you mean. Or in fact what constitutes “meaning” in the stockmarket. An intraday move that is not eventually reflected in closing or opening prices would qua that interpretation of “intraday move” be “meaningless” on a daily price line chart (GPL on Bloomberg; does Condé Nast pay up for one for you? They should!), but for a technical analyst the intraday candles (GPC on Bloomberg) can be important signals and would carry “meaning”. Look at CIEN today. Down 5% at one point, and closed only -0.68%; on high volume that would be a buy signal. I was selling over the day, schmuck that I am.

    I would consider a “meaningful move” in the market as a move which allowed you to make money. And had I been smart enough to cover my QQQQ puts when the index was -0.75% today (it sems to have closed up 1%) I would have made some.

  3. I said that the subprime meltdown would be contained? Ah, bugger. Probably one of those long days at RGE when I’d spent too much time hanging out with Dr Strangelove and felt a bit like JJC. Ever since I started pulling up charts on my Conde Nast Bloomberg (ahem) I’ve been much more informed & sensible (cough).

  4. Dear Baruch — Now that the credit manna is flowing again from heaven, can I get my credit? I have a nice little pied-a-terre in Cap Ferrat I have my eye on, but the current VIX shenanigans are cutting into my cash flow.

    No hurry, though. The seller is too busy considering alternative forms of suicide if I do not buy, so I have some time.

    Doom-ladenly Yours,
    TED

  5. Dealmaker, sorry, all the wonga we got from the ECB today seems to have disappeared into the maw of the looming collapse. May I suggest waiting a bit before you buy your little pied-a-terre? You may find yourself able to pick up the Grand Hotel instead.

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