Here's a cumulative look at how this stance has performed versus  the stock market since 1974:

An amusing bit of data mining to be sure, head over for more info on how this works...

"Secret Sauce" Makes a New High (EconomPic Data)

Riggio was trying to say that, whatever becomes of books as physical objects in this new age of digital distribution, he is certain people will still pay for the pleasure of reading. Assuming he’s right, the more pertinent question is whether they will be spending their money at a Barnes & Noble.

The Barnes & Noble ($BKS) story reminds me of those pictures where they show a big fish swallowing a small fish only to be itself swallowed up by an even bigger one.  Barnes & Noble founder Len Riggio built the largest bookseller on earth by putting thousands of mom & pops under his sword across the country; now he himself is facing his own possible destruction from the twin threats of shareholder activist Ron Burkle and the disintermediation of the digital age.

New York Magazine gives it all the saga treatment this week in a story loaded with juicy quotes, discussions about the future of content delivery and the reasons why sometimes a man just wants to pull a book down off the shelf and not read it from a plastic screen.

Recommended reading for sure...

The Billionaire and the Book Lover (NYMag)

Barry's smackdown of Dick Fuld's Lehman Brothers revisionist history is not to be missed.  With his testimony this week before the collapse commission, the obviousness of Fuld's "strategy" of blaming the government has already become apparent.  Everyone's saying indictments are to come in September, read this first at The Big Picture:

Dick Fuld's Fantastic Revisionism (TBP)

I just loved Tom Brakke's analogy of this current economic moment being the culmination of dramas that are now coming to a head.  His Blanche DuBois revelation is perfect and a great prologue to the epic economic blame game we will witness in the mid-term elections this fall:

A Street Named Desire (Research Puzzle) 

It probably feels good for the providers of tools and platforms, it may even have the feel of an awakening or a renaissance.

It isn't.  It is a Fool's Goldrush and will end horribly for most, my condolences to the real currency and forex market pros.  As someone who lived through the disintermediation and disillusionment of an asset class mania firsthand, I can tell you that the currency volume bubble (can't be a price bubble, after all) will lead to the pulling forward of a few decades' worth of health and prosperity.  This will lead to some innovation but even more new industry participants.  This will result in a nasty bout of price-cutting, middle-man slaying and industry reputation tarnishing.

The bad news is that it cannot be stopped at this point.  The good news is, you can take the cautionary tales of the stock game, the mortgage game and the real estate game and figure out how you want to be positioned when the inevitable boom-bust-hatred cycle shifts into high gear.

The story begins, like it always has, with a inkling of abberant interest in a twinkling "new" game of speculation.  The Wall Street Journal sets the scene with some numbers:

Currency trading volume around the world has hit $4 trillion a day, fueled by investors in the wealthiest nations looking to diversify beyond their home markets in a time of economic turmoil.

The $4 trillion mark represents a 20% gain from $3.3 trillion in 2007, the last time the global foreign-exchange markets were surveyed, according to the Bank for International Settlements.

Our story continues with some sense of large corporations looking to bring this activity to the mainstream via new offerings and access paths.  Oh wait, what's this?  A press release from TD Ameritrade touting their new Forex trading offering from August 24th?

TD AMERITRADE Holding Corporation today announced that futures and spot forex (foreign exchange) trading capabilities are now available via the firm’s thinkorswim from TD AMERITRADE trading platform, joining the recently introduced complex options functionality.

And who will this product be aimed at ultimately, both barrels cocked and loaded?

Same people who were offered the chance to become overnight real estate tycoons, like, ten minutes ago.

"'Our mission is to provide the trading platform of choice for active traders and investors,' said Steven Quirk, senior vice president, trader group for TD AMERITRADE"

Allow me translate for the spokesman of a company that once featured Jackie Chan kicking in stock trade orders on a flying laptop whilst fighting off bad guys in commercials circa 1999 - "Our mission is to get the hoopleheads of the world to, at the very least, give us a cut of their losings as they learn about the ferocity and profundity of global currency".  Or something like that.

They will make this a game, you will be the little pewter steamiron game piece -  manipulated around a board of plastic hotels that everyone owns but you.

Pain is coming to the currency trading markets, some for the pro, a lot for the individual.  Cost cuts as the industry gets overgrown and crowded out are sure to follow.  Then everyone loses interest and no one wins.

Remember I said it.

Here's Michael:

I got a bunch of feedback from my recent post on the bull market in bonds the other day, and much of it was of the disbelief variety.  Anyway, from regular Peter F in NYC comes this interesting bit of speculation on what some in the The Business think may have actually gone on over the last month to propel government paper to its recent peak:

Just putting it out there, responses encouraged:

OK, back to the regularly scheduled programming.  Let's start with the Sept/October/Fall market meme...

I see that the "September is the Cruelest Month" linkbaiting posts have already been arriving in droves.  I'll shred them to pieces real quick typing with one hand and only about a tenth of my common sense.

Let's start here with a bit from Minyanville:

The month of September gives equity investors a sinking feeling and for good reason: Historically, this has proven a bad month for the stock market.

Oy vey, when it starts like that, you already know you're reading filler.  Allow me to deconstruct the genre of "month/season/timeframe" articles and posts so that you never waste your time on another one again:

1.  Timing - designed to coincide within a few days of the beginning of the new time frame (September in this case, post date on this example is Aug 30th)

2.  Post Title - The title will mention the month and within a descriptor or two attempt to scare you into to clicking on it.  It will work, you will click, because we were all conditioned by the same commercials as kids when Duck Tales came on after school.  Cereal was purchased, let's keep it real.

3.  Data - They will steal all the data from either the Bespoke Investment Group or Ned Davis Research so just set your feedreader to grab both of those for the raw numbers minus the ex-banner ad salesman's "contextualization".

4.  But wait! - About halfway through the post which has just given you all the historical reasons you should just blow your brains out rather than be invested, a White Knight shall come galloping up over the crest of the hill, banners aflutter, with a reason to live, dammit!  The White Knight will be the Chief Investment whatever at an asset-gathering operation whose prima facie mission is to keep you invested, read his commentary accordingly.

5.  The non-conclusion - the last sentence will be exactly the evidence you need to tell you that you've just read something with almost zero value to anyone other than Scottrade, who have had the 1 minute-and-15 second opportunity to flash banner ads at you like a 42nd Street vagrant.

The point is this, it's all unprecedented.  What the markets did in September over the last 11 years or 6 years matters as much as the hair styles of this year's top ten American Idol competitors.  The variables are too large, too unknown and too unbound from historical calculation.  The context is always different also, especially now in our era of roadside attraction-sized superlatives.

Investors should try to incorporate historical quantitative stuff in their search for probable outcomes, but should never live and die by it.  Monthly market machinations make for good headlines but stupid fodder for helpful forward thought.

And it's Knives Out when they do.

Because the post-Lehman crash period was maximum fear and the spike to 120 was the manifestation of that.  What we're looking at now is different, it is a moment that is more about apathy than fear.

That 20% bulls to 50% bears sentiment number in the AAII survey this week was built up to steadily.  The drumbeat that helped sentiment get to this point has been an even-keeled rhythmic apathy and the dawning mass recognition of the futility of it all.  One lost decade down, a third of the way or so into another even lost-er decade - "Screw it," says your neighbor, "sell all my stocks and just buy me some bonds until this blows over."

And guess what...his neighbor on the other side of him said the same thing, and so did his dentist and his brother-in-law and the dentist's brother-in-law, too.

And this is what you think will continue indefinitely?  It never does.

My pal Ex-Wirehouse nails it best:  "You only need $16 million in the 10-Year to retire on $100,000 a year."  Laughable, and moreover, unsustainable.

So yes, they're coming for that TLT booty, even if they come in slow-motion and take their time in getting here.  Treasury bonds should not be expected to collapse like stocks, but in the context of what most holders think they're doing with them (sidelines?), it may end up feeling exactly like a collapse when the unwind begins.

The market is as lethargic as Kirstie Alley after being locked inside The Cheesecake Factory overnight.  And the newsflow is too. 

So here's some stuff to do in the meanwhile:

This site let's you turn any website into a horrific looking Geocities page circa 1998.  Try it with your blog or my blog or NewYorkTimes.com.  Just put the URL into the white box, this will easily kill an hour of your day:

http://wonder-tonic.com/geocitiesizer/

Also, I came across this picture of a cheetah ripping a duck out of the air. 

Yeah, I don't know.

Anyone have the new Arcade Fire album?  Love the band but was underwhelmed by Neon Bible.  Convince me to go buy it, somebody.

Awright, you guys.  Let's see how this suckfest closes, Dow down 25 as of this post.  I'm gonna go get a Twix bar and a diet ginger ale.

A slightly better than expected reading on weekly Jobless Claims has the market feeling bouncy this morning.  We also just got AAII sentiment numbers that are as negative as you get (20% bulls, 49% bears!).

Combine these two data points and a Dow that just barely managed to keep itself above the 10,000 level yesterday and you have the recipe for a nice bounce.

I'm planning to use it.  I'm planning on bringing out my dead for the cart man to carry away.

Sunlight is the greatest disinfectant known to man, so with this morning's early rays of sunshine I will cleanse the house that is my long book.  I'll be scouring my portfolios searching for the stocks that have become corpses during the correction's long night.

This is not because I don't believe that the bounce could be sustainable (I'm willing to give it the benefit of the doubt for now).  Rather, my expulsion of these stock market casualties has more to do with my desire for liquidity and my wish to be rid of that awful stench of death.

When the cart comes by, I'll be heaping it with the bodies of a few nat gas stories that are going nowhere, a huge retailer that seems to have no bottom and a financial name or two.

I don't give specific financial advice here on this site, but it certainly wouldn't hurt to use this opportunity to accept some of the mistakes of the summer and prepare your portfolio for the fall.

Bring out your dead.

Weekly jobless claims fall 31,000 to 473,000 (MarketWatch)