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
23,445 Blog Posts

The World is Ending

Get your hand grenades and sand bags ready; we’re about to endure some pretty awful times, young man.

I remember back in the 90’s, coming up in the business, feeling all optimistic and shit. The internet revolution had just begun and I was fucking annihilating short sellers, in egregious ways that only God himself could explain. The order flow was so overwhelming; I was unable to execute all of my trades.

Those were the good old days, when people would sun bathe during lunch in Bryant Park, then go back to work and make $100,000 from 1-4pm.

This shit we find ourselves in right here, is unadulterated hell, if there is such a thing. Market participants are stunned and will remain tepid/homo hammered for a fucking generation, all thanks and praise go out to our banking and regulatory exec’s for making it possible, of course.

You need to understand something about me: I don’t fuck around, when it comes to managing money. I am a fur coat wearing “space alien magician” with the buy/sell tickets. You can try to compete all you want; however, at the end of the day, I am simply bowling on you stupid bastards.

As for today’s tape:

I am no longer bearish on gold. There is some fucked up fuckery taking place in the flight to quality trade. It appears the gold bugs are correct in asserting that gold is a “safe haven” asset, during times of duress. In my opinion, gold is trading up due to its inherent safety characteristics, not due to inflationary concerns.

Once again, we are in a deflationary vortex.

One of my “Reverse Four Horseman of Certain Death” caught a downgrade today, based upon stupid earnings. That company, in case you are wondering is ESS. In addition, an old favorite short of mine, KIM, ate a dick, according to this mornings earnings report.

As a reminder, my four “Reverse Horseman of Certain Death” for 2009 are FRT, MAC, ESS and SLG, with KIM as a notable 5th.

Finally, XOM is still trading at historical levels. As a matter of fact, the stock is trading at a 50% PE premium to its peers, which represents the biggest premium since Exxon merged with Mobile.

Just know this: XOM is purposely manipulating its stock price, via oversized share buybacks. Like the banks, XOM is wasting shareholder money through idiotic buybacks. Last quarter, they bought back $8 billion in stock. This quarter, they are scheduled to buy back another $7 billion. Understand something, that is more than their entire quarterly capex budget.

Are they fucking insane?

Taking a closer look at their earnings report, you will notice a great deal of ambiguity around their asset sales. Call me a banana salesman if you must, but I believe XOM is just begging for a steel pipe beat down.

Top pick: Short XOM, long SRS,

UPDATE:
I sold 2,000 FAZ @ $58.35

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60 comments

  1. MOOBER

    The Zombie is Undead!

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  2. DEVILDOG

    Good morning Vietnam! I SEE DEAD BULLS!

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  3. j

    yep, You’re right, Fly, The market looks like hell on wheels.

    I bought gold here in the Asian time zone and I sold Aussie and Euro. I wanna mortgage the house and sell the piece of shit Euro, but I won’t 🙂

    The thing niggling in my mind about gold is that if stocks fall far enough it reduces the money people have to own the crap and the corrections are fucking fierce and totally unforgiving as every one is trading with scared money.

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  4. CAP

    OK FLY , you convinced me. I shorted XOM @ 77.5x .

    GE to zero as well. GE will be under $5 in 3 months. People realize GE is nothing more than a fuckin’ bank selling commercial paper at 2% and financing anything from real estate to appliances. Does anyone realize how big GEs exposure to commercial RE is ? Its huge.

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  5. j

    Moe

    GS has almost as much market cap as citi and Bac combined.

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  6. DEVILDOG

    BTW, j my scenario would be perfect if the SPY bounces back to 840 this morning. Please buy something for the rally to 1100. TIA.

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  7. T MOE

    Fly-
    I agree with you on XOM, but I refuse to fuck that bitch again. Burned one too many times.

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  8. mrkcbill

    Fly sorry about your pay cut….now what do you take down between 1-4 $25k ?

    I think it would be cool if we could get some of the big hitters on IBC …to bid for that BAC hellycopter for “The Fly”
    a gift if you will….Hell Bruce or Lady G could probably buy it with their monthly dividends.

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  9. TheArtist

    CNBC or the “RIFT” is now making excuses for the DOW….. I have heard it all now, those asshats are now trying again, to paint a rosy picture that “even if all the financials were to be remover from the DOW it would only equal one IBM, is that so bad”

    well fuck yeh it’s bad you RIFT asshats, what the fuck do these overpaid asshats at CNBC think is the engine that “finances” all the “other” DOW components?

    So Fly, pay attention to CNBC, now the new fuckery from them over the next week will be trying to uplift people by lying about “the DOW won’t be all that bad if C, BAC, AXP, JPM were removed and replaced with 4 other companies”…….

    well duh, you stupid asshats at CNBC, on a numbers game on paper no, but on a “FUCKING REALITY” basis (which no one at the RIFT lives in), if the 4 were removed the entire DOW would slowly collapse.

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  10. DEVILDOG

    j, just read about your gold buy. Now you are a confirmed stupid cow. I’ve raised my SSF to 888 in your honor. Gold DOWN to $600. BTW, please buy some SPY.

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  11. j

    There must be a lot of private jest out there selling on he cheap?

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  12. MOOBER

    Long FAS, for a gamble. WHy not?

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  13. The Contractor

    If gold goes up and the dollar tanks won’t oil follow gold?

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  14. The Fly

    Selling some FAZ on GS strength here.

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  15. The Contractor

    Unless demand destruction and credit contraction will outpace it.

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  16. T MOE

    j-
    Don’t give up on the gold trade just yet. My buy of GLD last Tuesday at 88 is looking quite golden indeed! Pun intended

    And yes GS is fucking me. I covered at 85 from a purchase at 88 when she started moving and hit my indicator to get out.

    Then I decided to jump back on her short at 88 and now she won’t crack, but there is one thing about about being a short seller that rings true!! Patience is key

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  17. dude with common sense
    dude with common sense

    xom is the same thing as gold just a safe haven for now to park money

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  18. CAP

    Shit. My short GS is kicking me in the nuts. BAC and GS moving in very different directions. What gives ? Is the Govt. going to appoint GS as the Overlord of the New Financial World Order ?

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  19. mrkcbill

    CAP….hasn’t that already happened?

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  20. T MOE

    Cap-

    They are already in charge of the New World Order and have been for years

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  21. j

    Okay dog.

    the killfile didn’t work. But if keep trying that shit I’ll buy one.

    Listen up fuck head I don’t lose money in commods or currencies. I don’t make money on every trade doofus but on the whole as I’m really careful and pretty good.

    I bought gold at 915 ish and I have my stop now at the entry price.

    I sold Euro at 1.2880 and I’m Aussie short around here.

    the only pos I would lose money on is the aussie as I’ve a stop below entry.

    Hey, you can raise your limp dick in my honor too, bud.

    And just remember, fuckface last Friday you predicted gold would sink and it broke up through important levels like a rocket.

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  22. T MOE

    WTF BAC vs IBM
    That is a no brainer-
    BAC loses money, IBM makes money
    Now that was easy!

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  23. DEVILDOG

    Fly, I just got around to reading your lead story. You are a FOOL for buying GOLD here. FOOL’S GOLD…get it? Very unimpressive. Now I have to raise my SSF to 999 in your honor.

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  24. MV

    https://admin.minyanville.com/assets/FCK_Aug2007/File/Theale/020509~1.GIF

    Kevin A. Tuttle

    10:19:16 AM

    The SPX is forming an inverted Cup & Handle with a Stochastic Divergence in its base. Given the height of the cup (140 pts) if the neckline at 804 is broken the drop could extend the markets downturn another 17% to 664!

    If this occurs the 2003 low will be broken and it is of our opinon that if not reveresed quickly, it could enter “The Abyss” we spoke about in our year-end report.”

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  25. JakeGint

    It appears the gold bugs are correct in asserting that gold is a “safe haven” asset, during times of duress.

    It appears that bowling ball was made out of spun sugar.

    _________

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  26. blues

    Yup FLY, we are fucked… either hyper inflation or massive deflation (make Great depression look like a walk in the park)… shit, America as we know it is nuked…

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  27. j_remington

    why is GS still smelling good amongst the garbage?

    anybody know?

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  28. TheArtist

    Here we go again, CNBC candy coating reality. All we need today is for asshat Krudlow, and asshat of the century Dennis Kneale to come on in a few minutes and start telling us to buy stocks and everything will be fine…..

    Fools Gold by the way is Pyrite, the classic…..some people think it is Mica, but it is pyrite, we have tons of Mica here in NC…..my property is loaded with Mica.

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  29. MV

    Mr Practical

    09:33:12 AM

    No positions in stocks mentioned.

    Don’t Blame the Free Markets
    For those of you who haven’t read Atlas Shrugged, there is a mini version of it in today’s Wall Street Journal front page describing Ken Lewis’ saga of buying Merrill Lynch and the government’s role. Government always begins acting in naive good faith, but over time winds up acting in fear of reprisal.

    Economics cannot be managed from the top down by bureaucrats. It is about production from companies, regulated yes, but free to fail and thus free to seek more efficient production.

    Those blaming the free market for the bursting of the credit bubble still do not understand government’s role in allowing and fostering it to be created in the first place: Mr. Greenspan’s continued lowering of margin requirements at banks and supplying the fuel for the bubble to exist in conjunction with Mr. Geithner’s lack of backbone in enforcing proper capital constraints on money center banks in the creation of off-balance sheet liabilities, the role of the GSEs in encouraging banks to make riskier and riskier loans, and finally Mr. Bernanke’s and Mr. Paulson’s faith in a lower currency as not the problem in the first place, but the solution.

    All in the name of economic progress.

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  30. E*TradeBaby

    I want my Mommy!!

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  31. Atlas Vicious

    Something interesting on gold – as the price got Whacked last fall, it was almost impossible to get your hands on physical for anything close to spot. Spot price would be 7xx, market price would be 900 – 1100.

    Everyone should have a box of it, and 3 boxes of silver. IMO

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  32. T MOE

    looks like we will have a wild ride today. Be quick and nimble if you are a day trader

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  33. mdawsz

    Nice call on FAZ!

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  34. blues

    @TheArtist, fuck CNBC, bunch of wall street cheerleaders… soon they will be crying…

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  35. The Contractor

    edit:double post

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  36. The Contractor

    A clear sign to me that Gold is set for another big run is the ridiculous amount of television commercials and small 1 owner shops opening up offering to buy gold. Get it now while it’s still relatively cheap and folks are hurting for cash and hold on.

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  37. Braveflaps

    Hey J, where do you see the pound going if BOE cuts to zero?

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  38. Jim Cramer

    Fly,

    How many days do you think it will take GS to hit 95 and then 100?

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  39. T MOE

    Short covering causing the bounce from 820

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  40. sniper6

    looking to take down a child size portion of BGZ @ $68

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  41. Braveflaps

    And Fly, awesome point on XOM buybacks exceeding capex.

    The douching banks did that, too – buy high, go bankrupt.

    In this case, the stock will eventually tank, and then one day we will wake up with $200 oil.

    Lather, rinse, repeat.

    And thanks for KIM! She got the special Braveflaps flytraps this morning.

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  42. j

    BraveF

    the pound is a piece of shit, but I reckon the euro is even shittier. If you see up at 1.50ish or close start selling that crap. But I think the Euro is the one that’s really in trouble.

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  43. GeneralWestmoreland
    GeneralWestmoreland

    Good Morning Vietnam.
    Bears are going to get napalmed.

    Hello Walter Cronkite. You are a VC Red.

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  44. gappingandyapping

    I bought a lot of FAS at 8.00. Stop goes at 8.07 for me now. Worth a shot.

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  45. 308

    Un-frickin’ real, who remembers that whole ‘six degrees of seperation’ thing with Kevin Bacon ?? Where you could connect him to just about everybody … well that just grew by leaps and bounds now that he’s in the Madoff pool…

    http://finance.yahoo.com/news/NY-court-document-reveals-apf-14260542.html

    crazy world

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  46. TheArtist

    Fly, who won Asshat of the month for January?

    you should officially crown each month at the end of each month, with the reason for what each winner did for the award….

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  47. crude_oil

    Long GSI 2.60 for a swing.Longer term China play.

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  48. dave

    ‘six dicks of separation’

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  49. MOOBER

    just sold 3k FAS for .50 gain, holding 2k from 8,58 from yesterday

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  50. T MOE

    WTF I get up to get a cup of coffee and this bitch skyrockets

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  51. gappingandyapping

    Note: The same people who wear leather jackets buy Vermont Teddy Bears.

    People are truly fucked, if you think this is a good idea to get someone this you should be removed from this site.

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  52. T MOE

    Turning off CNBC going with Fox business while that idiot Kudlow is on
    I hate the fucker

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  53. Braveflaps

    Thanks, J. I’ve been chasing the euro for a week as I’ve been too cheap. Have to wait for a pull back, but I am one with your thesis. Good luck with it-

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  54. JakeGint

    308 —

    Did you see Sandy Koufax got bitten by Madoff too (through his relationship with Mets owner/asshat Fred Wilpon)?

    I don’t think there’s a wealthy Jewish dude in the country that didn’t have a couple of bucks with that freak. I was on the phone the other day with a private equity guy in Minneapolis who said half of his country club got wacked by Bernie. Lives ruined, houses needing to be sold, the whole works, some $300 mm from that club alone. That Madoff hasn’t offed himself by now from the shonda is a credit to his mental toughness, at least.

    _____________

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  55. TheArtist

    Devildog, Colt or Rock River Arms? 1 in 7 twist or 1 in 9 twist?

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  56. John Malkovich

    Madoff got me too, quite unpleasant.

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  57. Don Drysdale

    I kept telling Sandy to wise up.
    I also told him to tell Walt Alston where to go.
    But does he listen to me?
    Noooooo!!!

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  58. Atlas Vicious

    DevilDog: The revolution is coming, the world is crashing, you really do have a bunker….yet you believe in Shorting Gold?!?!? You’re just not a card carrier of any kind, are you?

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  59. go2mars

    The contractor-

    Yes. Oil will follow Gold. But not yet. I’m shorting the hell out of oil for now. Okay, I admit I’m not a gazillionairre investor. I’ve been learning and investing on the sides for a few years though. I work at one of the oil majors, have degrees in geology and engineering, and can assure you that the longer term price of oil will bitch slap the world into an energy revolution. (High global declines). $200 oil will be a longed-for distant memory. But all things in their time. For now, I’m balls deep in DUG, and shorting oil companies that I think are a lot crappier than Exxon. Most small-medium cap companies with big debt who isn’t hitting production targets will do fine.

    But short term prognosis is a glut of supply that is almost all getting sucked up by China. Soon they’ll have their storage full, and when that happens, the short term oversupply will send oil prices to the low teens. $12/barrel is coming. But it won’t last. After a few months of oil below $30, enough companies will have gone belly up, and enough guys like me will have been layed off, and enough production will be shut-in, abandoned, overlooked, and critical infrastructure will have rusted a bit more. Add high oil field decline rates to that, and the commodity will become scarce. The perfect storm is coming. When I see oil below $25/bbl, I’m going cash. It will fall further, and then I’m going to try and buy a physical well. Or maybe a few.

    End of transmission from Mars. (A Space Geek in Calgary)

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  60. Cuervos Laugh

    And here I was feeling morose about my fondness for shiny metals for so long.

    By the way, Perrito Diabolito – gold and silver are the only commodities that are also considered equivalent to currency.

    Unless you’re in China, in which case it seems to be diamonds.

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