Sunday Morning Coffee

A few quick items this morning.

I haven't really said much about the whole naked short selling situation primarily because I don't have too many thoughts on it and I don't really care that much about it.

I can believe that has mattered a little more in the last couple of months than it usually does but this issue doesn't make it onto list of things that have caused the bear market.

To paraphrase something I read somewhere, naked short sellers did not create cheap money, did not create Fannie and Freddie's business plans or create liar loans.

Joe Kernen made an interesting comment about the financials the other day. He said something about Bank Of America (BAC), which I own for clients, not going to $18 again unless something is really wrong. He was talking about BAC as a proxy for the financial sector, not so much about BAC.

The action that caused that panic low for most of the sector on July 15 was a transformation of a very long, mostly gradual decline into a V shaped panic and we all know about the massive bounce the group got off that panic.

While I generally agree with Kernen's sentiment (more so about price than the really wrong notion) a reversion back to less panicked declines like from earlier in the year not only makes sense but may have started an hour into the day on Wednesday. Many names in the sector are down 6-8% in the last 2 3/4 days but everyone is still thinking about the bounce from the week before. I doubt the downside is over even if the panic is.

On my Friday greenfaucet post I made the following comment;

The simple decision to allocate to foreign may be the single most important decision someone could have made this decade (either that or allocating to commodities).

Think about this decade for a moment. Anyone who got three very big macro decisions right has probably made things much easier on themselves over the course of this decade. Those three would be buy foreign, buy resources and heed the yield curve inversion (the curve also inverted during the popping of the bubble). Just doing that got you into the two things that have had close to normal bull market returns and got you to lighten up on financials. I don't think this is the tallest order imaginable.

And about greenfaucet; I have started writing a daily post for them. I will be focusing mostly on foreign investing. You can access the content here. It will be unique content and I hope you will bookmark it and check it out every day.

The little guy in the picture is a chihuahua that Joellyn found at the local animal control (the dog pound). Joellyn arranged for our niece (one her side) to pick up the dog from us next Thursday so he's ours until then. The picture shows how skinny he is and how skinny strays can get. For people who really know their dog stuff, we will be getting him checked for worms on Monday. Apologies to any dog breeders but hopefully when you get your next dog it will be one that you rescued.