First, anyone who says “part deaux” should be fired upon on spot. “The Fly” doesn’t make believe he speaks French, despite being a household name in Bordeaux, known as the invulnerable Le Fly.
I want you to get your heads out from the asses of German finance ministers. Look around and see the vices tightening. Interest rates are at record levels, yet credit is tight. Well, guess what, shit is about to get tighter, as the housing meltdown in America dumps bricks onto the balance sheets of your favorite banks. Add onto that, Europe is shut down. Nothing is getting out and soon enough you’re not gonna be able to go in.
I view this market like the tab attached to a pepsi can. You keep turning that fucker back and forth and eventually it’s gonna fall off. By the time the market bottoms, Rick Ross is gonna look like Eddie Murphy, famished from the great credit crisis, part two.
The obvious thing to do is sell short banks; but it gets better. In a tight credit environment, any company saddled with debt, maturing near term, will either fold tent or dilute the fuck out of shareholders. Think of FTK back in 2007 when it was trading at $20. Sure, I picked the bones off that company, buying in the $1-2 range. But they got lucky. This time around, the credit crisis is for keeps. Companies like EXH will need to sell their souls to the devil, or do PIPES, to raise cash.
Providing you can withstand the overwhelming volatility of this market, there is a great deal of money to be made as the crisis goes from 2nd to 9th inning.
NOTE: One of the side effects of hedge fund liquidations is monstrous drops in commodities and commodity related shares, since those fucktards are overweight the sector. I added to my ERY position earlier today.
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Also, EXH’s lines of credit are with BNP Paribas and Credit Agricole- 1.8bill due within two years.
their latest quarterly filing says they have a new credit facility for the 1.8 billy due in 2016 now, no?
In July 2011, we entered into a credit agreement providing for a new five-year, $1.1 billion senior secured revolving credit facility (the “ 2011 Credit Facility”), which matures in July 2016. The 2011 Credit Facility replaces our former senior secured credit facility, which consisted of an $850 million revolving credit facility due August 2012 and an $800 million term loan facility due June 2013.
you’re right.
EXH aside, the point is still valid.
EXH is an abomination
Also, it’s still with BNP and Agricole if I’m not mistaken.
2012-2013
When is Horatio going to reemerge? Inquiring minds are wondering.
what do you think of shorting MET or LFC right here?
Love LFC short. MET will gap higher on Greek bailout news. But I am eying many shorts in the insurance sector. I posted list in PPT
Also, is this downturn all the more disconcerting given the fact that TLT is also RED?
just one day
Re shorting banks – not a great idea for the uninitiated. Lyle Lovette Geithner & crew will not hesitate to stuff you in a shower & take turns on you prison style if things get bad & it looks like a TBTF is in trouble.
In the ’08 fiesta of fun they outlawed shorting of financials & insurance names and anything else deemed important and took those hard earned profits of yours (mine)and made them into losses overnight.
Remember that you are playing against folks who can change the rules as the cards are dealt. The worse it gets the more likely they will change the rules mob style and leave you dead.They are taking out all the stops so play w the proper level of respect your opponent warrants.
Just my thoughts.
and as I write it, this comes accross: http://blogs.wsj.com/marketbeat/2011/09/28/short-selling-bans-extended-stocks-fall-harder/?mod=wsj_share_twitter
I agree. I’d rather focus on cash strapped basic material names.
Your post reminds of this guy. Funny stuff
http://www.youtube.com/watch?v=lqN3amj6AcE
It is unpatriotic to sell short the United States Stock Markets.
I will be buying all the way to 1300, which is in my sights at the moment.
rofl!
I am from the French Ministry of Culture in charge of protecting the French Language from brain clawhammers and clown rapers. It is my duty to point out that you have misspelled “deux” and that in Bordeaux you are known as “La Mouche”. Merci
metals and the commodores are signaling the second coming of lehman, no?
they are signaling the fall of the china man. especially copper. gold/silver will not be spared, either.
I have the distinct feeling I should re-read this post Fly.
You sound very bearish.
But as I have Herculean duties to perform, I will leave, for now, that a fine Bordeaux wine is worth time.
I pointed this out on my own column some time ago, but for those who don’t read it…
JPM has an offer out right now for customers to open a $10,000 savings account with a 3 month deposit minimum lockup, and receive $100 in return.
It seems innocent enough, until you realize that calc’s out to a little over 4% annualized return on investment.
Stark evidence of financing needs in the banking sector, no?
Maybe if you tweeted more…
lol
naaa just customer acquisition costs….its not just simple financing.
HEY FLY WHEN DO WE GO FULL BEAR-SHITTER MODE?
IT FEELS LIKE ITS ALMOST TIME
Listen for the masses…then do the opposite Constanza style.
Excuse my French but I’m in France (I’m just sayin) — Kanye West.
I’m not a Ron Paul fan, but those of you who are may enjoy these interesting interviews of him:
http://www.businessinsider.com/ron-paul-explains-why-the-media-ignores-him-on-the-daily-show-2011-9
I think Fly shorting FTK would make the universe implode in on itself.
can we use Redux?
Fly and EXH sounds like a ‘pas de deux’ made on Houston Street. Go ahead, fire at me, my Kevlar boxers and Prussian helmet provide invincible protection.
http://www.downside.com/bldgjump.gif
^^ the above dude refused to follow the PPT
ALL IN.
FAZ – 40%
TZA – 40%
ERY – 20%
Holding overnight.
+10% YTD.
God be with me.
Feel free to laugh at me when we rally into the close and open up +700 tomorrow.
all in FAS, triple financial …
Mr. President, I hope one of us will have our manhood intact …
Sir Fly, I know you were worried about me on my trip to NYC but I managed to survive the past few days. I got a bit distracted in the garment district by all models walking around but managed to find refuge in a fine Irish eatery called O’Brien’s. I built up some liquid wit and prepared myself for battle with the Jewish mafia. I haggled quite a bit with the Russian gypsies in the Diamond District but emerged victorious.
Maybe next time you can show me around the floor of the stock exchange and we can throw slices of pizza at Rick Santelli from above.
Santelli is in Chicago. Maybe you want to schedule that for your next trip.
Indeed. Speaking of Chicago, has anyone seen the Bartman special on ESPN?
That was awesome, I just cleared my largest profitable trade of the year. Letting 50% ride.
I think Germany will pass the resolution to give the ECU more power… the markets will rally with the news and the world will be saved… its another kick the can move.. with 300billion leveraged 70 times not to mention the rest of the PIIGS or us for that matter..and the global contagnation that would crash this giant Ponzi scheme of fiat money in grand fashion “they” will not let it happen. As much as I would like that to happen.. so we can start anew…its just not going to.
But will it cause the dollar to weaken or the EUR to crash more.. that is the question.
If the dollar rallies on the news then the comod play is dead. Could get long some of the European indexes as the inflation trade could work again. US markets should stabilize as lower imput cost = more profits.. 80% of the people still work and buy shit.
O yea and FAS should rock… fucking bancksters
the cheapest stocks, should we rally and the economy gravitate towards better growth, are basic materials, insurers, banks. That was also true when I bought my first stocks on jan 5, 2009. Those were also the stocks that then fell the most from there to the march bottoms.
bullish, in one of RCs threads recently, nailed alot of what to buy on this dip, but the big question is timing, and those categories will trade with a beta of 3 or something for awhile, probably.
We sell off to 950? HIG goes to 10. But holy crap is HIG cheap. Similar logic applies to MTL,LNC, blah blah.
I think alot of bearish minds are overestimating the negative impact to earnings of a recession here, however. Businesses are already lean, capacity was not as fully utilized, an ENORMOUS amount of goodwill was already written down in the last crisis, there aren’t nearly as many people left to lay off (severance pay etc). And the changes to m2m accounting will cushion false losses at financial firms.
not that they won’t drop, but they won’t drop to where they were in q4 08/ q1 09