iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,703 Blog Posts

FUCKKKKK: VIX PRODUCT RIPPED ME OFF AGAIN

Fuck off CNBC. I don’t care what Jim Chanos is shorting. Also, I don’t care, at all, what Coca Cola is doing. I hope that company dies in a fucking fire.

I thought I was being edgy when I bought TVIX today. I made it a large position and two hours later sold it for a 4% loss. This is an ordinary routine of mine, losing large sums of money in VIX products. God knows why the fuck I keep doing it, when the odds of winship is effectively zero.

My GE position purchased today — DOWN.

Most of my tech stocks purchased yesterday — DOWN.

My only respite was gold and gold miners. They did well, but I’m getting impatient and I am sick and tired of being led by the nose into vats of acid. I am sick and tired of trading poorly and limiting my experience to small sums of dollars. I’ve been heavy cash for more than a month and it has saved me countless dollars; but for the love of Christ — I am built to trade fast and with energy, and without fear. I need a direction. Listen to me now — I NEED OUT OF THE FAGBOX now.

The small caps are below trend line and on the precipice of a large leg lower.

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Hedging in Case of DISASTER

I’m hemming and hawing a lot, meandering about the house in search of inspiration. I bought some TVIX, a 10% position, here, in spite of being constructively optimistic here, eagerly awaiting market grandeur.

The hedge is for complete and total breakdown of this trend, back down to the lows. It’s a fair trade, but not if you’re naked. I have clothes on and plenty of cash left (25%) and have bountiful gains to cushion this nonsense I’ve recently partaken in.

My rationalization is end of year trickery coupled with an asinine tape. Up, down, up, down, down, down, up, up, down — a recipe for disaster.

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Markets Give it Up, Chop in the FAGBOX Persists

What a frustrating market to be in, right lads?

WRONG!

This is a wonderful tape. Get the losses out of the way — humble yourselves upon the altar of a market in flux. It’s never easy to trade the chop, especially at the bottom of a channel. It’s possible we blow thru and fade into oblivion — but it’s not likely — fuckers.

Here we are, important men of industry, rich and thin, beautifully BARRELING towards Xmas festivities. This isn’t the occasion, nor the time, for a market crash. Check in with me in January and I will side with your bearish bets. I do believe markets are near disaster and only a miracle can save it.

If you’re shorting stocks now, after the action of the past three days, you deserve to die.

If you’re heavily long stocks here, after the action of the past two months, you deserve to die.

What is a gentleman to do?

Trade with both honor and decorum. Do it small, like the size of your cocks. I am in a 35% cash position, 15% TLT, a bunch of gold. Only ~30% is allocated towards stocks and I intend to increase that level, should technicals improve.

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JP Morgan Upgrades $GE — Merry Fucking Xmas

This is a very, very significant upgrade. Steve Tusa from JPM has been bearish on GE since $30. He nailed the downside in the stock and has now upgraded it. Enough of the negativity. It is time to purchase shares of GE, barreling fat and greasy into the Xmas season.

“We are upgrading GE to Neutral and removing it from the Analyst Focus List as a short idea as we now see a more event-driven, balanced risk reward at current levels,” Tusa reasoned. “Key to the story, in our view, is the outcome of the “known unknowns” in near term, which are better understood and around which the debate is more balanced, as opposed to being overlooked by most bulls in the past.”

The stock is surging in pre-market, which should bode well for bond holders and the fucktards worrying about high yield. Separately, I bought some GE in the pre-market at $7.50.

Let the squeeze begin.

Related:

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HOW DARE HE! Trump Says He Might Intervene in Huawei Criminal Case In Order to Broker China Trade Deal

Futures have reversed lower this morning — for reasons that are a bit opaque to me at the moment. While reading the morning news, this little fucking gem caught my attention.

When asked about the CFO of Huawei being detained, brought up on charges against the state for violating the sanctimonious Iranian sanctions — Trump, with all his gall, said this.

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary.”

And the response is outrage.

Back in the U.S., Senator Richard Blumenthal said at a Senate hearing on Chinese espionage that he was worried about Trump’s comment as it made it look like U.S. law enforcement was “a tool of either trade or political or diplomatic ends of this country.”

In response, Assistant Attorney General John Demers affirmed that the Justice Department is not “a tool of trade.”

“What we do at the Justice Department is law enforcement. We don’t do trade,” Demers said.

With those comments we can conclude that Trump probably had no idea this was going to happen. The actors involved here at pretending like this is just another criminal probe, no fucking big deal. It sounds to me, frankly, like there are elements inside of the government interested in fucking with China and preventing a deal.

The rule of law is an ass, subjective, and changeable — wholly political and disgusting. You can go back to pretending we’re not a banana republic, no different from the shithole countries around the globe — only with a lot more pomp and pageantry.

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NEWS FLASH: THE FLY WINS AGAIN

Just shut the fuck up.

The comments section always gets stupid whenever markets dislocate. I’ve got a new crop of fucktards, a generation of spoiled rotten reprobates who’ve never seen a bear market before trying to tell me, the man in the fucking time machine, how to comport myself during periods of crisis.

HELLO — I was fucking born for these days, having toiled in the sewers of Brooklyn before it was gentrified. I’d walk to school in the coldest weather imaginable with a broken book bag, and holes in my speakers, into the horse trails of shit, mud, and wild animals. My life has been a series of incidents and accidents of the biblical scale, only bemused by periods of excess, but uncomfortable with success.

Down markets are my forte. You’ve only read about them in books.

Futures are sharply higher this evening. We’ve got follow thru underway on the reversal hammer from two days ago. The close this evening was just fine and STFU about the weakness. The market has crashed in recent weeks. Accept a +165 day as a good alternative to -500.

I allocated 25% into tech stocks before the bell. Expect winship in the A.M., followed by a stern chastising to never offer me financial advice again.

NEED A XMAS PRESENT FOR A LOVED ONE OR MAYBE A NEIGHBOR?

How about buying them financial literature from the good Dr., as well as RARE ART on the covers? I’ll probably raise the price to $1,000 one day to ensure limited supply of these works of art support absurd prices. I imagine one day these books will be traded at auction houses for EXTREME prices. Act now and become a better person for it.

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Bought into the Bell — God Have Mercy on My Soul

I bought MU, PAYC, TWTR, APPF and ZEN into the bell — all 5% positions. Couple that with an earlier purchase of EXK and I’ve now allocated 70% of my cash. My portfolio is most unusual, centered around the idea that bonds, gold, and SAAS can rise at the same time. While this might appear to be an odd mixture of complexities, it is well thought out and a cowardly approach to a potential melt up.

Markets did nothing from the opening tick, but drift and fade a little. I’m comfortable with that opaque and haunting benevolence in the tape — because it brings with it a certain verve and demeanor that requires aptitude and a relentless spirit to chase it down. This market isn’t for old men and if you’re not careful, you’ll be burned down to as cinder.

My position is simple: 3-5% directional lift higher towards the top of the range, and then failure after the New Year. My gold positions should cushion any shock to the system and my bonds will hedge. While I’m still 100% long in my Quant portfolio, it is also 50% allocated into a defensive structure. I hope that I’m doing right and have properly analyzed the environment. I’ve been hemming and hawing plenty and vacillating between success and failure, all amount to not much. Not much at all. I’ve prepared and highlighted my thoughts and have been reviewing them in person, LIVE, inside of The Capstone Programme. If you’re confused, unable to invest with honor and for profit, let me teach you what you need to be told. Get into the Capstone.

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Worst Year for Credit Since 2008

I don’t want to pawn off the good work of Tyler as my own — so here’s the link to his story.

The importance of this narrative cannot be minimized. We have a situation that is very reminiscent of 2007 playing out now, with rates increasing into a slowing economy, wrought with dangerous amount of debt. Corporate America has $10 trillion in debt, most of it used for the purposes of buying back shares. By doing so, they leveraged into their business models. All is fine and good when earnings are bountiful — but what if those earnings became losses?

During the previous recessions, earnings for the S&P 500 fell by 65-75%.

Losses will be increased, much greater than 2008, and debt covenants shattered to pieces — write downs and bankruptcies will ensure — at a pace unseen before. This is the bearish narrative, woven with the cloth of burlap. You can never escape this fate, believe me.

Via ZH:

Prices for bonds rated CCC or lower (the weakest high yield credits) have dropped about 8.7% since the credit selloff started in early October, according to Bank of America Merrill Lynch Indexes. And as prices fall, yields on CCC-rated bonds have climbed to 11.5% – well above the current coupon around 8.1% (meaning dramatically higher refunding costs).

As about 34% of CCC-rated bonds come due in the next four years, up from 20% in 2010, according to Citigroup, Barrons notes that these companies will need to decide whether to pay down debt or refinance at higher rates. Either way, they will need to focus on cash.

All of which perhaps explains why, as The Wall Street Journal reports, bond investors scrambling to protect themselves from losses are increasingly using bets against the largest junk-bond ETFs.

The value of bearish bets on shares of the two largest junk-bond ETFs hit a record $10 billion in recent weeks, according to data from IHS Markit .

A record 59% of shares outstanding of the largest junk-bond ETF have been sold short, up from about 35% in September, according to data from S&P Global Market Intelligence.

WSJ reports that appetite to short the ETF, operated by iShares, has far exceeded the number of shares available to borrow; ETF brokers have created an estimated $2 billion new shares to meet the demand since the start of October, said IHS Markit analyst Samuel Pierson. Short sellers of stocks and bonds are constrained by the amount of securities they can borrow. But ETF brokers can create new shares specifically to lend them out, allowing for much larger bearish positions.

Additionally, negative bets (or hedges) on indexes of credit default swaps, or CDS, for junk bonds hit a four-year high in November, according to Citigroup .

“There’s been increased interest because people are concerned about the credit market as we get closer to the late stages of the credit cycle,” said Calvin Vinitwatanakhun, a Citigroup credit-derivatives analyst.

And, as we recently detailed, Morgan Stanley strategists now expect this bearish turn in credit to continue in 2019.

The tricky handoff from quantitative easing (QE) to quantitative tightening (QT) that is under way is central to the cracks that have appeared across risk markets and credit markets in particular. Global QE provided the necessary conditions for corporations to lever up, which is exactly how they responded.

Outstanding US corporate credit market debt has more than doubled from US$3.2 trillion in 2008 to well over US$7 trillion today, with the biggest chunk of it coming in the BBB portion of the credit curve, the lowest rung of investment grade ratings. High debt growth has translated to high leverage – BBBs with 31% of BBB debt leveraged at or above 4.0x.

Lower yields driven by QE had important consequences for investor behaviour as well. The search for yield became a driving force which led to substantial inflows into US credit, particularly overseas investors. Also thanks to the Fed emerging as a large non-price-sensitive, programmatic investor of agency mortgage-backed securities (MBS) as part of QE, fixed income investors became progressively underweight MBS and overweight corporate credit. As the cycle got extended, the net result of these flows into credit investments has seen the manifestation of late-cycle excesses in credit markets. High debt growth has led to high leverage and weak structural protections for credit investors.

With the transition into QT, these flows are reversing. We have a marked drop-off in 2018 of foreign investor flows into US credit investments.

The laymen can watch this unfold in HYG, JNK, and later on LQD.

 

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SILVERFAGS GET IN HERE: The Orphan Metal is On the Cusp of Breaking Out

Remember when I said I would wait until the end of the day to buy?

I LIED.

I stepped in and bought EXK, not because it’s a good company or because people like it — but because silver, FUCKERS, is on the verge of breaking out.

We’ve got a BIG ASS CANDLE lit up on EXK today. I’m looking for a 10% move in fairly short order.

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Superb Xmas Rally Inside of the FAGBOX — Continuation is a Foregone Conclusion

Listen to me now, as if I was Santa Claus sitting inside your house eating cookies. Yesterday’s chicanery is all but a bleak memory. In its place, pure joy and ebullience. I sold out of my SQQQ position and it crushed my spirit for 6.5%. I am doing fine, since all of my gold positions are up. Net, net, on the cash invested, I am up 0.6% for the session.

But more important than that is for you to understand that my trading account, the foolish thing that I broadcast out to the world is nothing more than 25% of my overall account. My quant account is higher by 1.5%, without a care in the world.

Here is what I am going to tell you, so listen closely. Barring some sort of perverted reversal spawn from hell, we are, in fact, going back to the upper boundaries of said FAGBOX.

Observe.

Today’s big ass candle (BAC) give the subtle nod to candlestickFAGS everywhere that all is well and good with stocks.

That being said, given my recent foray in trading intra-day assumptions, I’ve restricted myself from trading until the end of the session. This way I remove any uncertainty that might arise from intra-day chicanery and black plans designed to fool smart men like me into tomfoolery.

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