Chalk One Up for the Bears

How can these morons draw a parallel between the collapse of Long Term Capital and Bear Stearns?

Hey assholes, when LTCM fell, the economy was on the precipice of furious economic expansion, ala dot com bubble. Things are quite different now.

Look you, I do not have time to intermingle with retards from the internets. “The Fly” is a very busy man, with loads of work and construction projects to oversee. As you know, when the weather gets warm, I employ many “illegal Mexicans” to build shit for me.

I’m looking for a sharp decline in many of the financials. And, I am confident we will see the “ag plays” become a “source of funds,” once again.

Off to dinner.

This should offset any negative effects my “FUCK YOU LONGS, YOU”RE DEAD” post may have on my short positions.

Fly wins, again.

UPDATE: Maria Bartiromo has just pissed me off, with her excessive “we’ve rallied significantly off the bottom” rants, I just made an EMERGENCY call to my VooDoo Physician.

He told me: “Soon enough, the markets mon will be swimming in blood, mon.”

Developing…

I just wanted to gloat a little bit, in order to piss off some of the more superstitious/paranoid type.

I will tell you, with 100% conviction, [[LEH]] is an ass and should be sold indefinitely.

In addition, on the long side, I like [[RIG]] here and [[DGP]]. Without a doubt, gold is going higher.

So, to sum things up, being longs stocks is for asshats (until I decide to go long). Moreover, LEH and other banks (think [[SKF]] have significant downside left.

By the way, the JPM-BSC deal was a fucking bailout. No excuses. I’m sure the fuckers from Enron would have loved $10 per share, no?

Much to my chagrin, Vale pulled out of the Xstrata deal, which would have fetched 90 billion. As a result, a bunch of asshole basic resource names are jumping off my screen, in anticipation that Vale will direct their guns at someone new.

From [[AA]] to [[FCX]] to [[CENX]], the sector is on fire.

Also, it appears the downtrend for the wheelbarrow dollar has resumed, following a small consolidation. With that, “ag plays” are on fire, led by oil.

Basically, today’s gains are due to takeover speculation and the “inflation story” being placed back on the front burner.

Although I am being flame broiled on my [[SMN]] position, I do have minor hedges, via [[DGP]].

Both [[MON]] and [[POT]] continue to steam ahead, thanks to the crap mentioned above.

In short, the bulls are making lemonade out of today’s poor tape, by running up the commodity plays. This is very good for their case and it may spill over into the general market, by 4:00.

Fuckers.

I sold 1,500 [[RIMM]] @ $117.

NOTE: This is my last piece of RIMM, after holding it for years. All done.

[youtube:http://www.youtube.com/watch?v=9Kl9tdu7qRA 450 300]

The durable goods numbers were plain awful, particularly for machine tools. Businesses are not spending like the do-gooders think they are.

Keep your eye on dollar weakness versus the yen, via [[FXY]]. So far, the move to the downside is significant. Should it continue, I will be buying more gold, via [[DGP]].

One thing to keep in mind: municipalities who plan for construction projects, by raising money via bonds, are in for a giant surprise. In their infinite wisdom, they peg expenses to the CPI index, which, as you know, is utter bullshit. Inflation in construction, which includes steel, concrete, copper etc, is running at a 9% clip per annum— up 50% since 2003.

What does this mean?

For one, it means municipalities will be forced to raise more money to finance construction of infrastructure projects (bridges, tunnels, roads) or be forced to cancel them.

Possible short plays off this dilemma include:

As for today’s trading:

Look out for the asshole dip buyer. He’s back in town, with his stupid mustache and bag of depreciating dollars.

I really like [[SMN]] here, which is down due to gold strength. Again, long both DGP and SMN is a good pair trade.

Finally, it appears [[C]] is in the middle of all sorts of problems. Today, they settled an ancient Enron claim, for close to 2 billion dollars.

You have to be kidding me.

And, they own a truckload of [[CCU]] debt.

Top pick: [[SKF]]

UPDATE: Paulson says Bear Stearns ‘found itself facing bankruptcy

Yeah, instead they ended up getting 10 bucks per share, which in my book, is a fucking bailout. The deal was NEVER structured for $2. They used that $2 shit for public relations, in order to say: “see it’s not a bailout.”

Fast forward one week, they upped the buyout to $10. Plus, [[JPM]] is paying out the nose to retain Bear brokers, all with Fed money aka tax payers dollars.

Keep in mind, in bankruptcy, [[BSC]] goes to zero.

29 billion @ 2.5% for 10 years.

Not a bad deal for Dimon and Co.

Federal Reserve equals U.S. Sovereign Wealth Fund.

[[JPM]] is busting the bank to retain top producers at [[BSC]], while telling the pikers to go fuck themselves and run, not walk, to Merrill.

For brokers generating over $500,000 in revenue, Dimon and Co. will pay them a 100% up front bonus, which includes 25% of JP Morgan stock. And, those lucky fuckers will get additional bonuses of 50% cash and 50% stock, based upon production numbers, over the next three years.

For lesser producers, in the $250k-500k bracket, they will receive a 50% bonus, split evenly between cash and stock.

For losers making less than $250k, they get nothing. Moreover, they probably get to hand in their books, to bigger producing brokers, and look for a new job.

Essentially, a broker making $1 million in gross commissions stands to make over $4 million in bonuses, over the next three years. Anyone in the industry knows that is an incredible deal, for basically doing nothing but go to work.

For JP Morgan: I believe it is a terrible deal, as they try to fend off shark-like recruiters from taking Bear Stearns’ best brokers.

Basically, JPM is taking on one fuck of a money loser.

NOTE: One of my recruiter friends said other firms are willing to payout more than 200% in upfront bonuses, for top producing Bear brokers. This should be interesting.

China Life [[LFC]] takes the wonderful premiums from their core business and invests them in the stock market. Can you say “moral hazard”?

With the Shanghai down more than 30%, year to date, something tells me the fuckers from LFC have some rough sledding ahead.

[youtube:http://www.youtube.com/watch?v=ZsCvtCr0RAE 450 300]