Ratatouille Friday…..

Posted on 09/09/2011


My mind won’t permit a cohesive narrative today, so in it’s place is Ratatouille Friday….. a hodge podge of thoughts that have been running around in my head lately.

Greek/Euro is a problem again. The Equity markets (unenviable) ability to forget about the SYSTEMIC risk that is percolating on the other side of the Atlantic is crazy. It’s akin to believing somebody is an alcoholic or drug addict ONLY when they are drinking or high. The reminders are becoming more and more frequent lately. Credit Default Swaps on your periphery countries (Usual Suspects – Greece, Portugal, Ireland, Italy, and Spain) continue to blow out. Greek bonds are all but assuring you of default. Big/smart money plays in the bond market. Forewarned is forearmed.

Low end/support for the VIX (cash) is 30 until otherwise notified. 40 (where we’re back to right now is high end….UNLESS….bondholders are forced to take haircuts and the other shoe finally drops).

Why should I care? Why should I care?

If I have to cut my hair.

The Swiss Central Bank’s decision to peg the Franc to the Euro may go down as one of the worst decisions in the history of fiat currencies. The race to the bottom is officially ON – get your boarding pass because the Lusitania is setting sail.

The “Put America Back to Work” speech was more direct and ambitious than I expected. There is a greater probability that the NBA season tips off as scheduled than our recalcitrant Congress passes it in anything like it’s current form. I’m a probability guy – what can I say?

The other day I listened to Bruce Springsteen’s Nebraska album. I’m not to be confused with a big ‘Boss’ fan. I was a bit too young to appreciate his heyday and now I’m just too cynical……but that album is stark and incredibly powerful. I hear Woodie Guthrie, I hear Billy Bragg, I hear Bob Dylan…. I like what I hear.

Speaking of jobs, or the lack thereof I give you the last verse of  ‘Atlantic City’ :

“Now I been lookin for a job but it’s hard to find

Down here it’s just winners and losers and don’t get caught on the wrong side of that line

Well I’m tired of comin’ out on the losin’ end

So honey last night I met this guy and I’m gonna do a little favor for him.

Everything dies baby that’s a fact, but maybe everything that dies some day comes back.”

Or maybe not…………

I believe the song was written in the early 80’s during some other dark economic times. I fear that far too many hard working, but long term unemployed Americans have a similarly conflicted internal dialogue. Thinking about all the jobs that are gone forever is scary shit.

The FOMC appears intent on extending the duration of their quantitative easing at the 9/21 meeting by targeting the 10 year (READ: trying AGAIN to recuscitate the floundering housing market) – AKA Operation Twist. I’m not a bond guy, but I did read Bonfire of the Vanities and I do know that it doesn’t matter if mortgage rates are published at 5% or 4% or 3 3/8% IF NOBODY IS WILLING TO LEND (creditworthy). Same story…..different year.

Anybody else notice that popular/new scripted television: Mad Men, Boardwalk Empire, and now Pan Am/The Playboy Club (as opposed to Jersey Shore, or The Bachelor, or Bret Michaels Used to be in a Hair Band and Wants to find a Wife, or My Armenian Father had something to do with OJ Trial and I’ll do ANYTHING to remain relevant) harken back to some point between 30-60 years ago? If tv holds true to form – what type of programs will we be watching in 30 years? Poorly dressed underachievers hanging out? Doesn’t Judd Apatow do strictly that right now? Misinformed Misadventures in the Middle East- a comedy for those with no sense of history. Just wondering.

[T]here are known knowns; there are things we know we know.
We also know there are known unknowns; that is to say we know there are some things we do not know.
But there are also unknown unknowns – the ones we don’t know we don’t know.
Former Secretary of Defense – Donald Rumsfeld

I couldn’t have said it worse myself.

While we’re not really on the topic, but because it’s (understandably) ubiquitous…… I’ll NEVER forget where I was on September 11, 2001. It’s difficult to believe that 10 years have passed and equally difficult to comprehend that those tragic events were manipulated to justify a war of choice at almost incalculable expense – but I digress.

24 year old kid. Crystal clear autumn morning in Chicago. I had been trading “off floor” for LETCO and learning from the firm’s risk manager, but on that day one of the guys who worked on the specialist post for us (on the CBOE) was out, so I was headed down to the floor to trade. Watching Mark Haines and CNBCs coverage after the first plane hit. Hearing that the exchanges were all being evacuated shortly after the second plane struck. Standing outside between the Options Exchange and the Board of Trade in stunned disarray. Waiting at home for the rest of the week to find out when they would reopen in New York, knowing without a doubt that the world I had known for the past 24 years had been irreversibly altered.

God bless the Fireman, Policemen, Transit Authority, and all other first responders. I quite literally have the chills writing this – bless the innocent men and women who had their lives cut short on that horrible day. I simply can’t imagine what your families have been through. The world has never been the same.

Enjoy your weekend……we will NEVER FORGET.