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
16,545 Blog Posts

Recalling the 2008 Financial Crisis

I had just started iBankCoin 2 months prior to the meltdown. You can say iBC was born in the fires of the country, as its financial apparatus crumbled to a cinder. My business was humming along, but I suffered egregious losses towards the end of 2007. If you recall, the market soared to new highs after the Bear Sterns scare in the summer of 2007. I remember being in Lake George, NY–watching the carnage from a low speed internet connection. I even blogged about it, something to do with Important Matters of Mountain Vacations or something.

I knew, with every fabric of my being that the market was in serious risk of going lower. For awhile, I played the game and traded the long side, just to keep my ax sharp and my knife bloody. Moreover, the general consensus of all tabbed bloggers was for a lower, much lower, stocked market. I believe I penned my first bearish piece on 8/14, following Cramer’s retard attack on CNBC.


Oct ’07-Feb ’08

So I had these big short positions in December of 2007 and I was down large. The odd part about those underwater double inverse (triple inverse wasn’t invented yet) positions was that I didn’t have a care in the world about them. I had conviction.

January of ’08 came and hit the market like a bag of rocks upon the heads of disabled old men in wheeled chairs. I cleaned house. I was on my way to making a fortune.

I’m not sure if you know it or not, but Cronkite (the news guy on iBC) and I used to work together. Despite his interests in space rockets and Kennedy conspiracy theories, he has a really good grasp on the general market trends. We’d go over the internals every morning and afternoon, almost in shock by the absoluteness of the decline. But we’re both gentlemen of the first order and always maintained a certain cool demeanor through it all–naturally. I recall the market crashing, literally, and at the same time feeling depressed about the turn of events, despite being 250% short (leverage). I was thinking ahead and felt that the money I was earning by betting against banks and everything else was going to be pointless. It was to be a giant exercise in futility if our way of life collapsed. Clients would lose their jobs and take all of their money back, providing the dollar was still relevant.

Cronkite and I would marvel at blue chip stocks trading in the low single digits, saying “this has to be a bottom or else we’re all going to die.” It felt like the end, especially at the bottom.

Food wasn’t going to be delivered because credit was on the verge of being a thing of the past–vapor lock. I showed a much more jovial face to the public, on iBankCoin, bragging about killing people on my way to work and snatching the purses from old ladies who were trying to cash their social security checks.

It was a dark time for the world and I profited from it. My book of business went to new highs. I stopped accepting new clients and told my small ones “to go play with a bag of marbles” and to leave me alone or else I’d kill them. I had work to do and it had to be done.

Then the government started to intervene, which made shorting stocks very, very dangerous. One day they banned all short selling in banks, because they could, which completely screwed over the inverse ETF racket. That same day, the market was down huge and SKF down 20% too. Go figure. There was a liquidity crunch in the ETF because it was illegal to short. People got mugged that day.

CNBC served as a propagandist network, on behalf of the federal government. They’d leak information to Charlie Gasparino, who’d time his rumor mongering at 3:30, just to cause a squeeze in the markets. It worked every single time and it was never fair.

It went something like this (no large marge).

The market once soared by over 900 points (that’s 11%!) on news that the government would bail everyone out. It was impossible to short the market, which is why the market bottomed out and went speed chopping carrots with balls on the table to the upside in 2009.

iBankCoin took off. Readers all made a King’s ransom and we all lived happily ever after–at least most of us did.

Sometimes I am grateful for the manipulation in the market (sometimes). I’d much rather stay my execution, than suffer from the firing squad now.

Long live Benjamin Bernanke.

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28 comments

  1. bobbin4apples

    sounds good

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  2. fiscal cliffed

    i miss 2008, i was a lowly college student with a book that was very long $LEH

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  3. Charlie

    Do you mean December 2007?

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  4. Woodshedder

    Hell, I made 10% long in 2008, lol…trading mean reversion. Good times, sort of. It was scary.

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  5. Narwahl

    This is a superb piece, reads like a dream. The clean Fly is on fire. Spaced rockets rule too.

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  6. SPEEROTHEKID

    BEST POST IN A WHILE. THANKS.

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  7. Sooz

    They’d leak information to Charlie Gasparino, who’d time his rumor mongering at 3:30, just to cause a squeeze in the markets.

    Serious..sh!t!!
    Charlie broke the story..haha

    He looked as if (possibly in the moment) he had just snorted a pile of cocaine and CNBC makeup could not cover that sh!t up..perspiring intensely.

    give me a break..
    people last a HUGE amount of $$ because of Charlie..truth!!

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  8. Sooz

    sorry Charlie..
    such CNBC Bull Sh!t..

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  9. Grey Poopon

    Very cool, enjoy hearing these stories of the iBC legends

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  10. JV

    BAC was a favorite trade during the ‘ idiot ‘ months . The mega shorts would take any ask at the open and pound away. I would enter buy and sell limits and laugh my ass off while BAC was near $3 headed to the eventual all time low around 2.73. I remember being worried when I had a boatload at 3.13. Lmao. Good times.

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  11. TraderCaddy

    And how about Cramer in ’08 when Bear Sterns was @63.00 telling the folks to stay with it and all is fine. It “was not in trouble.”

    http://youtu.be/HPc16cuQJR0

    PS Nothing will beat the days leading up to and right after 10/19/87. Besides without it you would never have the term PPT for your service.

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    • Jakegint

      Whatever happened to that crazy redneck who was Cramer’s personal gadfly?

      Did Cramer have him stuffed in a suitcase and thrown to the gators?

      _______

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      • BRAVEFLAPS

        Wherever he is, I hope he returns with la voix du M. Le Fly.

        This is just tragic; the point in the movie where the studio exec says “who?”, and the bartender forces you to buy your own drinks.

        May it end very soon.

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  12. JV

    It wasn’t all good times. I also remember being in two Countrywide branches removing funds ( over 5% yield ) when Mazilo started selling shares at $30 – $40. I noticed the hustle of the mortgage side while a few of us in ‘ the know ‘ were exiting. I was also leaving WAMU ( over 5% yield ) and still remember the bank managers face when I wanted ‘ the check .’ And I went to the ATM ( another bank ) one morning around 4am taking a lot of cash out when things were really ugly. LIve and learn.

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  13. JV

    It doesn’t compare to 2008 – but I was on the phone with Schwab / Black Monday 1987 and recall the frenzy in the background.
    ” Market or limit ? ” she asks – and ” I can’t guarantee you these will go through.” LOL… the markets.

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  14. surplusdroids

    Love these stories.

    The financial crisis is contained!

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  15. surplusdroids

    I remember where I was for many of the significant events.
    Kind of like my parents remembered where they were the day Kennedy as assasinated.

    Bear Stearns gone, WAMU, gone , AIG crushed and GS with Hanks approval getting 100 cents on the dollar for some CDS. Watching Congress vote on the bailouts and the markets reaction, frozen and locked credit markets / commercial paper fucked, Fannie and Freddie meltdowns. Mass pandemonium, Cats and Dogs living together, the dead rising from the grave. Judgement Day. (full ghostbusters).

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  16. Razorsedge

    Was completly out tks to cramer

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  17. theedge111

    Amazing post.

    I was one of the pokers that went to all cash before the crash and then missed most of the bounce in 2009.

    2008 changed my spending habits though and I started saving so I am kinda thankful that it happened.

    The sad part is we never took the “hit” from the 2008 crash. We deficit spent our way out of it.

    As the Fly said(and i agree) it’s better to delay the execution and hope that our government comes to it’s senses.

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  18. dvk1970

    FED, authorities, HFT are setting the market where they want. At the moment they got that “big swining dick” feeling, if you traded during the 90’s and were on the right side of the trade you know what I mean. The experienced trader knows that when that happens it wont be long before you will be standing with your dick in your hand. When authoroties and Central Banks want to behave like equity traders fine but hubris will decapitate them in a barbarian way one day…as for HFT, the shake out already started.

    Happy trading

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  19. CRONKITE

    the days of sitting at a desk in a white collared shirt…how i do not miss them except for our in depth market conversations!
    in a office of 150+ you were one of three or four that i spoke with in depth and probably the most respected.
    always looking for the ‘edge’

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  20. The Plumbers Crack
    The Plumbers Crack

    Excellent post. Love reading the old war stories.

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  21. Rollo Tomasi

    I remember in 2005 working on a bond desk, business was horrible and me and my manager concluded if it is bad for us Bear Stearns must be feeling it too. We were buying puts with 120 strikes! But their earnings came out and it was an upside surprise!…They were going all in on mortgages, About a year later I got a call from a friend, he was buying a nice lake home and the day before the closing he said his mortgage lender called him and was frantically grilling him on his financials,saying the bank providing the loan was very nervous about it….I asked if the lender was Bear Stearns and he shouted “How did you know!!”…Pure comedy

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  22. Raise Taxes, Raise Spending
    Raise Taxes, Raise Spending

    My dad died in the beginning of 2008. He had had all of his savings in blue chips and lived off the dividends, but when he went we had to sell everything to crystallize the capital gains. We lost a third of the estate’s value.

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  23. fprex scam

    Felix Homogratus, Dimitri Chavkerov Rules! You pay us we post good about us!!

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