So, what the hell was yesterday about anyway? It lends credence to the idea of heavy
liquidations in Galleon's hedge funds since there don't appear any other
credible ideas—but, I'm open to suggestions.
The rally today was led by earnings from McDonalds (
MCD),
Travelers (
TRV) and 3M (
MMM). The 2:15 PM Buy
Program Express arrived on time to squeeze shorts from yesterday's closing
debacle. The buy programs were
stimulated by little follow-though selling from yesterday and the LEI coming in
"better than expected". Ignored in the
enthusiasm was a lowering of the previous LEI report.
We finally got big volume today on an up-day with dip buying
and earnings optimism. Breadth was quite
positive.
Those $1
Happy Meals are just what the doctor
ordered for contemporary America, right.
Sorry, I just couldn't resist the image and metaphor.
I did promise in the financial comment
a
link to Philip Greenspun's blog (must be a contrived name…if not, my
apologies). Herein he describes just how
our big banks make money with your money.
It's called fixed-income leverage.
And did you happen to see that twice failed (LTCM) John Merriweather was
launching a new hedge fund to trade bonds with leverage? You'll no doubt be ringing him up.
We sheeple have no idea what yesterday's big sell-off was
all about but evidently no one else knows either so the dip buyers
entered. It's definitely a strange
environment with valuations sky high as they were back in 1999-2000. But with cash yields this low and plenty of
liquidity sloshing about combined with peer performance pressure, it's a combustible
situation.
Again, in after hours trading AMZN and others are doing
quite well.
Often, perhaps like you, just before sleeping I ponder what
tomorrow will bring in the markets. All
I have is the current news and believe to have a pretty good idea as to how
things will open the next day. But then
I'll know the news cycle will continue while sleeping and perhaps things will be
dramatically changed. They often are.
