The talk today is not about stocks but about Jimmy Cayne selling his Bear Stearns stock for $60 million.
Yes, he sold it for only $10 and change, far below the $175 peak and its $57 price just a few weeks ago, but don't kid yourself. This was bad timing. One trader wrote to me: "If you are a blue collar worker in Pennsylvania or Ohio in fear for your job or your livelihood you don’t give a tinker's damn if he sold for $10 or $170 and you don't view $60 million profit in one day as a bad day..."
He may be right. When you hear Hank Paulson talking about regulation of investment banks, you know the regulation train is coming to town. And it will hit when Congress returns next week. And, as several traders have already pointed out, Jimmy Cayne...who has also moved from Park Avenue to the Plaza...will likely be the poster boy. It doesn't mean the Bear deal won't get done, but expect a lot of rhetoric.
Elsewhere:
1) Futures weakened as JC Penney
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] slashed its guidance for the quarter to $0.50 (from $075 to $0.80); sales for Easter were well below expectations. CEO Mike Ullman III noted that "consumer confidence is at a multi-year low." Down 12 percent pre-open. This is going to revive the central bear thesis on the stock market: a) that estimates for retailers and other consumer companies are too high, and b) that consumer balance sheets are damaged and the Fed can't simply wave a magic wand and fix it. Macy's
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] , Kohls [KSS 44.52 --- UNCH (0%) 
] down about 5 percent. Bulls argue that retailers have already corrected more than 20 percent. 2) Like Lennar
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] , KB Home [KBH 25.79 --- UNCH (0%) 
] reported a loss. The comments are very similar to Lennar's remarks yesterday: "Until prices stabilize and consumer confidence returns, we believe inventory levels will remain significantly out of balance with demand. We do not anticipate meaningful improvement in these conditions in the near term..." Steelcase
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] , the world's largest manufacturer of office furniture, missed and guided below expectations for the first quarter. They too complained about inflationary pressures. Bear Stearns' Jimmy Cayne: Stock Sale "Bad Timing" - Trader Talk with Bob Pisani - CNBC.com
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