Crack is Dead Too

Anyone who’s been reading me for more than two years knows that I was first to be bullish on the refiners, before all of the fancy men with bowed and floral ties rated them to be “buys” on the teevee box. I was long the WNR when it was a limp adolescent, fixed in a price range of $11 to $17.

Now that the WNR has grown, paid off debts, and become a mature investment, plebs recommend it still. However, hidden in plain view is a significant deterioration of profit margins for the refiners.

321 crack spreads are down from mid 30’s to mid 20’s.

And the spread between WTI and Brent crude is down from 25 to 14.

Ignore these trends at your own peril. The primary reason to be long any mid continent refiner is the WTI-Brent crude spread. Without delving into details, it’s their license to steal from you.

There’s also a reason why refiners, like the metals, are traditionally clad with low PE multiples. They are a classic boom to bust back to boom cycle sector. There isn’t any long term profitability worth banking on in the refinery sector. Once margins turn lower, they tend to exaggerate and crush the equities of the underlying businesses.

The primary impediment to shorting these stocks now are their strategic importance. The big oil and gas companies will not buy them. They’ve been selling their refinery businesses for years. But these bozos will most likely merge with one another, just before the industry blows up. So if you’re short the sector, don’t be surprised of a monday morning rape, with your short +35% on a buyout offer.

Nonetheless, I think the sector should be avoided.

Here are the richest valued refiners, ranked by FPEs.

ALJ
CLMT
CVI
DK
PSX
WNR
TSO
HFC
MPC
VLO

Gold and silver are lower again, compressing the shareholders of miners down to little coins. There isn’t any reason to own a silver miner at a time of little to zero inflation. Pray tell me, where is the inflation? Commodity prices are decidedly lower over the past 6 months. All of the people who bought gold and silver also put money on Intrade, betting that Mitt Romney would get elected.

Speaking of which, do you really think Bitcoin is going to be permitted to just float around as an alternative currency? While you nerds out there keep busy solving mathematical equations, “mining for bitcoins”, the government is planning to shut you down. Like Intrade, Bitcoins will be deemed a regulatory risk. There are AML laws in place, my fellow tulip buyers.

Bitcoin is at $107 this morning, up 300% over the past month. Soon enough, they’ll be worth the same as a Chuck-e-Cheese coin.

Top picks: short Bitcoin, short AG

I’d like to welcome Kong to the iBC family, coming aboard from Forex Kong, who intends to share with you his many virtues and forex market hand–much to the chagrin of the dozens of moribund currency hacks littering the blogosphere today.

We’ve come to a mutual understanding and I look forward to learning a thing or two from his new iBC tab.

The market is in the midst of a correction. Q1 is over and everyone is running for the exits. You don’t see it yet in the Dow; but it will surface soon. Look at former hedge fund hotels, like AAPL and all metals–getting their clocks cleaned cold.

High fliers like CREE are decidedly lower and MDB sponsored scam stocks have reversed lower, killing investors along the way (UNXL, PAMT).

Now is not the time for froth mouthed boat stock investing. Now is the time for discretion. While it’s true, I own close to a million shares of FRO, it’s also true that I have 65% of my assets locked in cash. Plus, I have more than 15% of my book short, leaving me with very little equity exposure. Some of the stocks left in the books are of the old man varietal, like KMB, CHD, WM and PEP.

Ignore the casinos like VHC and hunker down, small plebs., for the month of April brings surprises in the form of Jack in the Box styled punches to the face.

At least you are keen to the plot, all thanks to me.

I sold short moar AG because silver is retarded and heading lower.

Before I get into it, KWK executed an asset sale today, sending the stock up by 20%. Expect more of this to occur in the oil and gas space. I’d be shocked if CWEI didn’t raise significant capital through asset sales over the next 3 months.

With the market trading down, I am building a watchlist of stocks worth purchasing on a dip.

I like RAS, BX, WETF, APO, USG and AAPL. There are other stocks that will make the list, undoubtedly. But none of these stocks will be worth anything to me unless they trade lower.

As an investor or trader, who is smartly in cash, North Korea is a friend. Let’s hope they are able to “sabre rattle” the markets lower. Let us pray to the old and the new Gods that Cyprus devolves into anarchy, sending Europe into a stupefied state of collapse.

We want to buy margin liquidations, nothing more or less. When Wall Street is flooded with the tears of the overzealous, it will be time to buy.

Until then, “The Fly” will be biding his time, maneuvering amidst the fog of war, plotting and scheming his way to unrivaled decadence and hedonistic, pornographic, luxury.

The market is overheated, but do not expect anything dramatic. Over the past 7 years, the market has been up in 6.

The trend for the general market is higher. But there are bear markets within it. Case in point: silver miners, coal,  iron etc.

In short, I am expecting a minor pullback. We might drop 5% inside of the next two weeks, but recover it by month’s end. If your time frame is longer term, these moves are immaterial to you. For now, I am 65% cash, long a few boats stocks, and short AG, CCL, and JCP.

I must admit, deep, deep down, there is a part of me that feels bad about my Easter Bunny/Zombie Jesus post. But then again, I am a sinner. I sin, then sin some more. I try to do good; but always find myself kicking old men down sewer pipes or illegal mexicans into active lawnmower blades.

Look at the President of Cypress. This fine chap, leader of his cigarette smoking clan, transferred tens of millions of personal and family funds out of the country, just days before the banks closed. It’s comedic, really. The gall of this guy to balls up leave his country at a time of extreme suffering and misery. I do not exaggerate or act in a morally insane manner when I say “this man should be executed by his own people.”

The olive oiled people of Cypress need to rise up and roll out the French Guillotines into the city square. Then, they need to hold express court hearings, sentencing everyone who is to blame to a quick and bloody death. For the love of God, the insanity needs to end and bloodshed and mayhem needs to begin.

Now don’t you go involving us Americans with your stupid European financial crisis. Although we are loaded to the gils with bad debt, we are the currency reserve and can print as much as our black hearts desire. If you should, by chance, decide we are NOT the currency reserve, we will send our F-22s to your capitol to blow it away.

This upsets the smallest plebs, the lowest of the low vagrants, who are “invested” in bitcoins. Dare I say, you would be better off traveling back in time and asking Bernie Maddoff to manage your money, than to have anything placed in a bitcoin. The nerve of you.

Don’t even bother asking me about stocks. I am expecting a pullback, but wouldn’t be surprised to see it rise in the face of unimaginable horror.

The market rising amidst bad news is no different from someone approaching you on the train and jerking off in your face.

What are you gonna do about it? Cut off dicks?

Then get short. Start with silver.

http://www.youtube.com/watch?v=a5xqxzjuKxw

Two thousand years ago today, the son of God became a zombie.

Zombie Jesus was pissed off because some greasy Italians had tortured and killed him. Being the son of God and all, he came back as “Zombie Jesus” to exact revenge on his enemies. Rumor has it, Zombie Jesus liked to catch his prey when they least expected it, on fishing boats, hot air balloons and even in outerspace.

One time he parted the sea and ate a Roman solider, who was scuba diving, looking at the pretty fish.

About 1,000 years after Zombie Jesus exacted revenge on the people who tortured and killed him, while in heaven, he created a man-sized rabbit to descend upon his enemies and dubbed it “The Easter Bunny.” Back in the old days, before the Easter Bunny was gentrified, doling out chocolates to well behaved Christian boys and girls, he’d bite off the heads (like a carrot) of the descendants of the original Roman soldiers who killed him.

A long time ago, every Easter, the city of Rome was wrapped in fear, as no one really knew who was related to those original Roman soldiers. They’d hide themselves inside cupboards, amphoras and sewers, to escape the Easter wrath.  For Italian citizens, it was like playing the Wheel of Fortune, with the grande prize being a hideous bunny rabbit gnawing away at your head, like a carrot, until you dropped dead. This went on for many centuries until chocolate was invented.

Jesus loved chocolate so much, he became addicted to it. God would always tell him “to lay off that stuff. It will rot your teeth.” Jesus ignored his Father’s wishes and kept eating chocolate, until one day God snatched away his chocolate cows and sent him to his room to do penance for disobeying him. When it was time for the annual Easter killings to commence, Jesus was nowhere to be found. The Easter Bunny searched for him high and low; but God hid him well.

The Easter Bunny became panicked and started to spaz out in heaven, punching angels in the face and what not. Then he spotted Jesus’ chocolate cow, which was hidden behind the tablets of the 10 commandments. It was at that point that he knew Jesus had been punished by God and this pissed him off. He took the chocolate cow and made millions of pieces of chocolate, in his likeness, with it. After all, it was Jesus’ favorite food.

He then delivered the chocolate to millions of human children, God’s favorite form of human.

When God found out about this, he was pissed off- but could do nothing to stop The Easter Bunny, for he was hidden in Jesus’ old hiding spot, unknown by God. The Easter Bunny sent a letter to God, saying “release Jesus, or else every Easter I will deliver the chocolate cow pieces to millions of human boys and girls, much to your chagrin.”

God replied by making rabbit the preferred protein for the country of France.

To this day, Jesus is tucked away in his room, doing penance and The Easter Bunny is running amok, dropping off chocolate cow pieces to children all across the globe.

Now you know the true definition of Easter.

When I asked you what were your favorite picks, I had no idea that you’d have any. I envisioned most of you finding picks out of the litter or worse, perhaps from Twitter, provided for an audience of chart chomping imbeciles. Bravo! to those of you who think before investing. I have nothing but admiration and respect for those who are able to ignore base instincts and live freely, think freely and wear outer garments befitting of a man mature enough to operate machinery or enjoy the arts.

As such, I’ve been tracking what the “smart money” has been buying/selling for a long time, not because they are better–but because they have more resources than most to isolate good ideas.

The following is a list of the top hedge funds/investment companies in America and their top two picks, defined by monetary value.

The data was compiled by the friendly robots inside of The PPT.

Pershing Square: CP, PG

York Capital: RLGY, HTZ

Omega Advisors: S, SLM

Odey: SIG, PHM

Appaloosa: UAL, LCC

Third Point: YHOO, AIG

Tiger Global: YNDX, GRPN

Eminence: AAP, G

Jana: AGU, QEP

Glenview: LIFE, THC

Citadel: MS, PRU

Viking Global: NWSA, DHR

Pine River: NLY, OCN

Litespeed: MIC, DMND

Canyon Advisers: CCO, CMLS

Berkshire Hathaway: WFC, KO

Fairholme: AIG, SHLD

Redwood: CPF, GPRE

Maverick: RL, M

Silverpoint: DLPH, NXST

Oxford Asset Management: NYX, PXP

Perry Capital: LAMR, NRG

Egerton Capital: WSM, SIG

Greenlight Capital: GM, MRVL

New Mountain: SEMG, ACIW

Elliot Management: DLPH, BMC

Hudson Bay: CVI, SHS

SAC Capital: SHW, SIRI

Blackstone: FSL, NLSN

Apollo: LYB, RLGY

Oaktree: CHTR, FBP

Carlyle: FSL, ALSN

KKR: HCA, DG

Fortress: NSM, BKD

Waddell and Reed: CBS, WYNN

Hayman Capital: NSM, NCT

Goldman Sachs: BHP, MRC

Columbus Hill: MMR, SEMG

Discovery Capital Management: PANL, YNDX

Landsdowne: NKE, DAL

Senator Investment Group: ICE, ADT

Visium Asset Management: WCRX, ENDP

Blue Harbor: CACI, IGTE

AJO: MPC, VLO

Baine Capital: HCA, ST

Icahn: CVI, CHK

Paulson: LIFE, S