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
23,466 Blog Posts

A Whole Flock of Black Swans

The rumors are turning into truths by self fulfilling prophecy. I know this is a controversial position, but I know for a fact companies like Lehman and Bear Stearns were forced out of business. Sure, their assets were devalued to the point of insolvency and their managers over-leveraged in a bad market. But, ask yourself, where are those same assets trading now?

Answer: significantly higher.

When markets panic, things get sold down to absurd levels. The problem we have now is leverage. We have leverage at the banks, hedge funds and for the love of second hand sneakers: ETF’s. The retail investor is long fucktarded super charged upside ETF’s, in the midst of crisis. That is a recipe for disaster. Don’t get me wrong, they can be good for a trade, but never part of a core investment plan.

So here we are, three years removed from the biggest credit crisis since the great depression, and it’s happening again. For the love of dead dogs inside 5 star hotels, we’ve been crashing since 1997, continuously, without abatement. There are great values and eventually investors will pay attention. You need to stay in the game.

Today’s decline was God awful (no Jesus). However, we are still +1.5% on the nazzy since yesterday. Small gifts.

With my money, I am not buying anything other than WNR, for the moment. My cash position is down to 20% and my core positions performed admirably today, despite the panic. As of 3:50, I was down 0.75%. Considering I was +8% yesterday, I consider myself lucky.

The recent spate of rumors needs to be squashed immediately or they will become truths. The dicksuckers over at S&P can toss this market into a 1,000 point decline with a French downgrade. There is nothing redeeming about France, not even the cheese.

With gold shooting to new highs and treasury yields at new lows, you know where the money is flocking. There are black swans everywhere and every Tom, Dick and Harry is calling for a grande collapse. It’s so predictable, it’s almost a forgone conclusion.

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117 comments

  1. The Equalizer

    FIG

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  2. Johnny2time

    This is brutal. We need a backstop on all major Eurozone banks.

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  3. pedro

    Such a great post. Crashes don’t occur in slow motion, waiting for everyone to climb aboard. I’m so sick of hearing about the world ending that the contrarian in me refuses to sell a damn thing. And why should I sell? I was up on the day, thanks to my WNR. We pretty much gave all of yesterday’s gains. Does the Chuck Bennett pre-Fed meeting bottom hold?

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  4. go2mars

    Most of my positions are up higher than they were a week ago! Sweet! I was getting nervous yesterday.

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  5. Testicules

    ….and over night we will see a shift to positive

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  6. ckalt

    And who pushed the morons in congresss to revoke Glass Stegall…….come on put the blame where its deserved.

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    • TeahouseOnTheTracks
      TeahouseOnTheTracks

      Sandy Weill & Bob Rubin

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      • ckalt

        Yes, those are two names but there are many more. The process started in the 80s.

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      • TeahouseOnTheTracks
        TeahouseOnTheTracks

        hahaha … laughing at the “loser” that gives me the thumb down regardless of what I post …. Go Blow Yourself!

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      • Po Pimp

        Phil Gramm was a contributor as well.

        Bitchez.

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    • lol

      It was planned. Robert Rubin was pressured in it by Larry Summers and Timothy Geihner, just as they all had the south korea, indonesia and thailand bailout followed by the LTCM bailout, theyneeded to create a risk free trade again, just as the european union bailout is about protecting the banks that hold the bonds.

      The legislation with Fannie and Freddie requiring them to lend was all about generating a more liquid derivatives market and the repeal of glass steagall act went along with it. They didn’t think the risk would be so systemic perhaps, but they knew they would profit or get bailed out, or bailout those who owe them money (like AIG owed Goldman). It’s practically the same crew as the 90s during clinton administration.

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      • lol

        that is, Robert Rubin, Larry Summers Tim Geithner in combinations with many of the CEOs such as Jamie Dimon, Jon Corzine,Dick Fuld,etc that were all a part of the whole thing

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        • DEVILDOG

          They will be killed in the REVOLUTION along with many others. Dumbest, arrogant fools in the room.

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  7. Bullish

    I like the graveyard pic.

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  8. genghis khan

    Fly- undoubtedly, governments are not able to do enough. The US has its own currency and can’t print its way out of deflation, what are France’s chances? We’re just going to have to take the pain. Scott might be right, we’re going to give back a significant chunk of QE1 & 2. This is not 2008, and banks are stronger, but then, we have no bullets left either.

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  9. Apocalypse Now

    STFB (Sell the f***ing bounce) has replaced BTFD

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  10. yxd0018

    “The retail investor is long fucktarded super charged upside ETF’s, in the midst of crisis. That is a recipe for disaster. Don’t get me wrong, they can be good for a trade, but never part of a core investment plan.”
    Is that because ETF increase volatility duing upside and downside movement?

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    • pedro

      No because 3X ETF’s rebalance daily and thus decay over an intermediate to longer range time horizon.

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  11. JTU

    Fuck this! I’ve been buying and selling good names like WNR and CVI twice a day!
    Bought the dip 3 times today and sold twice. I bought positions in both at the end of the day!
    This market is so volatile due to programmed buy and sell orders. I’m just trying to profit a little of the volatility.

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  12. Alvari40

    Liar!

    Bordeaux – the one good thing about France.

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  13. Cloris Leechman

    Actually I believe it’s called a “murder” of black swans

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    • Thunderpup

      Correction: A “buttload” of black swans.

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      • action jackson

        plethora of minoras (labias that is)
        so hold your sac
        give your WNR a whack
        and “for the love of second hand sneakers” get in the black

        *Fly guy that quote is clutch

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    • Gerald Myers

      It’s a ‘murder’ of crows…

      ‘bevy’ or ‘herd’ of swans

      None official, but I propose a ‘unknowable’ of black swans

      Gerald

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  14. Thunderpup

    Having black swan soup for dinner – mmmmm.

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  15. CAP

    Chuck Bennetts Bottom just went from ( . ) to (0)

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  16. Montana Grizzly

    Your welcome for the headline Fly.

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  17. theedge111

    It’s time to throw giant slices of pizza in Chuck Bennett’s face!

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  18. JTU

    Until we see a revearsal on Gold, it will be hard to get a rally. Everyone is panicking to Gold!
    The momentum in Gold is telling us that everyone is scared shitless!

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    • federalist

      Then they’ve been scared shitless for the last 10 years. Gold has been going up that long.

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  19. panamaorange

    RUSL , and/or RSX long options

    Russia looks to come out of this with the least damage. They are just too empty, and filled with resources, not to thrive over the next 3 years. They don’t have the poverty liability of Brazil, India, Or China.

    Plus, they have the best national anthem

    http://www.youtube.com/watch?v=JdcowE5qpxU

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  20. Dracula

    Awesome !!!!!!!

    Thanks man ; saving my butt .

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  21. lol

    hilarity ensues! this stuff is funny! the market is resuming it’s act in standup comedy and it will be performing on a daily basis.
    http://finviz.com/screener.ashx?v=211&t=GLD,SLV,TLT,UUP,UDN,SPY,BAC,XLF
    There’s jokes all over the place.

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  22. AlphaBetaBanjo

    Markets desire stability and security, in hunting for this it succumbs……….causing more instability. I am not looking for security here just the big juice moments that become Hall of Fame trades.

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  23. lol

    someone threw a rock and black swans flew by. Really nothing new happened but when one swan moved the rest panicked as if there was a legit threat.

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  24. lol

    nothing to see here, they weren’t swans, just crows. CAWWW!

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  25. CAP

    Yesterdays rally was the last chance for trapped longs to get off. Now the real elevator down begins. Like I said Dow under 10,000 by next week. The problem is this is NOT 1998 or 2008 . This is 2011 and we have never seen shit like this before. The worlds largest economy the European union is on the verge of collapse. Greece, Spain, Portugal Italy, France its spreading like wildfire. Tomorrow it could be the UK. The final domino will be Germany. Who is going to step in and save these guys ? China with their $3 trillion reserves ? Until the picture clears up people will be selling. Its too dangerous out there and uncertainty and risk is just too high.

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  26. ruggyup

    Listen up twerps. If you weren’t trading in OCT 1987 you don’t have the experience you think you do. Fact is, you don’t know jack. Devildog will leave more of his droppings on your burned out lawns. Some of you won’t be back.

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  27. RealLife

    Isn’t this starting to get more than ‘a bit worrying’?

    Panic, wholesale collapse of confidence, armies of black swans goose-stepping down Wall St, banks reeling – I’m really beginning to doubt the safety of bank deposits. After all most banks are rotten at the core by design.

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    • yxd0018

      I thought Fed still own printing press.

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      • TraderCaddy

        Too many tourists (especially Chinese and Japanese) to go goose stepping down Wall Street.
        Last time I was there I almost got swept into Trinity Church by the tourist mobs.
        On top of that I didn’t even get to feel the Bull’s testicles because there was a line for the foreplay.

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  28. Alvari40

    Fly,

    What has a higher probability of happening first: (1) super flush, or (2) Fed/Treasury surprise?

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  29. TMoe

    Ratigan’s rant is great

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    • razorsedge

      i agree, it was a rick santelli moment, but i thought it was kinda rehursed, but i feel he is right,

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  30. drummerboy

    the miners kicked major ass today. there may have been a 512 pt,flock of black swans,but the first time and the last time prolly that i’ll ever see everything i’m holding be green on such a sick red day. what a feeling.

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  31. Hugh Hendry

    Fly, I have to disagree with your analysis. Lehman and Bear assets were sold down because they weren’t being guaranteed. An asset insured by Uncle Sam is by definition worth more than one which isn’t. But the issue is how much guaranteeing can conceivably be done?

    All that is happening is a shift of losses from the private sector onto the debt burden of governments. Eventually governments themselves become insolvent because they cannot insure every bullshit business that really should exist in the first place. We don’t want Uncle Sam insuring against all those bullshit McMansions that were built. That means the burden of bad businesses which should never have existed will eventually be put on the tax payer, which will kill the economy in its own unique way.

    So while I have agree with pretty much all of your analysis thus far, I think you’re straying from the truth a little here.

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  32. razorsedge

    earth is broke, we will have to find another planet to borrow from.

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    • razorsedge

      found a planet, we will b borrowing from uranus

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    • funnyparanoidretard
      funnyparanoidretard

      I already tried, that’s why they’re after me! and the aliens already did that which is why we don’t have any monies!

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  33. So tell Mrs Fly ...
    So tell Mrs Fly ...

    Market Red, but Fly Green.

    The Fly is losing even though he appears to be winning.

    WNR of today = MVIS of yesteryear

    So Surry.

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  34. Ruben the Cuban

    That’s three separate days where the DJIA dropped 500+ points in just the last week. In the words of the character Frank from Everybody Loves Raymond……Holy Crap!!!!

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  35. History Speaking
    History Speaking

    Today–the World; tomorrow–Germany.

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  36. DEVILDOG

    Added to my SHORT position against GOLD in DZZ by getting 700 shares SHORT of GLD @ $174.80. Had to call in a favor at my broker to get them.

    The $ is ready to soar. Everything else will plummet. I think tomorrow will be a HUGE CRASH day. Also, next Monday and Tuesday. Hint…check history for the pattern.

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    • funnyparanoidretard
      funnyparanoidretard

      You forgot that in 2012 the aliens will come back willing to pay ?ÄY6upæ§10,000ƒ, the alien’s currency, which can be traded throughout the planet, give you access to eternal life, and allow you to teleport anywhere in the universe to use it! You think people won’t want gold then! haha, I just hope when I teleport it works and my tin foil hat doesn’t interfere!

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    • Aristotle

      Aaaahhhhhh Devildog, the famous prognosticator from 3/2009 to 7/2011. He’s heavily short with his remaining $5,000 ……….

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    • The Fly

      I do love DEVILDOG. He’s my favorite bear of all time.

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    • j

      Dev

      I fucking hope you haven’t nixed my position you clown. I really fucking long the US dollar against the euro and I don;t want you fucking talking about it.. for obvious reason.

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  37. IMABADAZ

    Sometimes the best way to evaluate a market is to exit all your positions first………………….

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  38. Aristotle

    Do french woman shave anywhere?

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  39. London

    Can’t help but notice on the day France guillotine’s its banks… Gold closes at 1789.

    What is the ECB saying? “Let them eat euros!”

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  40. Hermes

    wondering if the real issue are dark pools with extensive EU exposures

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  41. Wilco

    This is how stupid things are…I am a municipal bond dealer and have been showing a block of state zero coupon bonds out for the past 2 days at a 5.25% yield,not one phone call…This afternoon I put the bonds out on the wire to get bids so I can just unload them. The high bid came back at a 5.10%! If they wanted they could have saved thousands buying on the offer, but they didn’t want to that in this market so they went looking for bonds to bid on and ended up paying more. The stock market is acting exactly the same way.

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  42. Steak

    CME upped margin requirements.

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  43. Yabollox

    Maybe remove or reduce the gambling element from our financial markets? The leverage, margin, options, shorts… or at least reduce the whipsawing those elements can have on capital formation. This should be serious stuff, not gambling casino stuff. We are trying to build companies, plant, equipment, employment…. not making booty for Slick.

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    • ruggyup

      Well now lad, why don’t you learn to live and excel in shit whirlpool we have. Don’t expect some rule maker make your life cool and decent. Acquire some cojones and work your ass off in what you believe in. If you don’t have the stones to believe, get the fuck out, just like a whole bunch of your fellow bloggers will sooner than later.

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  44. Cheesetrader

    WTF is with the dis on French cheese, man? Sure it’s smelly and runny and funny colored and…ah hell, never mind

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  45. Danghomo

    Gold is way the fuck overbought, but keep running. Crazy!

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    • Taco

      The US dollar is way diluted and QE 2.5 is already in place. Not so crazy. Just the news.

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  46. razorsedge

    india just came out w/ a new game show.. its like love connection, its called connect the dots.

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    • Cheesetrader

      Totally saving that to tell to my dud, Apu – he’ll dig it

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  47. razorsedge

    before anybody gets hostile a friend of mine from india told me that…

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  48. Raise taxes, Cut spending
    Raise taxes, Cut spending

    Government finances are a complete mess but business out in the bigger economy is doing actually pretty well. Manageable debt levels, good cash flows and profits, excellent balance sheets with tons of cash in reserve, plus major inflation in China will help keep the dollars here.
    Once governments accept the tough medicine that is required hopefully some of the panic will subside and share values will start to reflect the true values of the businesses.
    I have no faith that the US will fix its finances because the process can be hijacked by anybody, as became painfully obvious last month, but politics in Europe is different. Over there, leaders have much more power between elections. You almost have 4 year dictatorships so it is possible to actually get things done.

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  49. JakeGint

    Some thoughts on a very special Cuervo.

    And not even my birthday!

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