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
22,267 Blog Posts

High Yield Blows Out; Stocks Drop Dead

The Fed is wrong and they know it. They’re trying to wreck the economy in order to loosen the employment pool. In other words, they want people to lose their jobs in order to reduce wage inflation.

This stress is now being priced in, in the high yield and leveraged loan markets.

JNK hit hard today.

With this sort of action in the bond market, the moves in stocks are secondary. This is the tail that wags the dog.

I doubled up in my FAZ and DRV positions. I have a triple sized position in DRIP, long a fuckload of TLT, and holding into tomorrow. I sold TWTR for a 9.5% loss and am trying my best to keep the other longs. If they go down by 10%, they’re out.

If you need to be scolded in person, see about The Capstone.

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8 comments

  1. dragun

    LMFAO … spot out my drink on that last sentence

    “If you need to be scolded in person, see about The Capstone.”

    Has to be one of the best lines of the year

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  2. it is showtime

    [Hit me] Baby One More Time – britney spears
    https://www.youtube.com/watch?v=J-DQzsHk114

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    • numbersgame

      I still don’t understand how you can gloat when it is not even clear if your previous 5+ years of uber-bearishness hasn’t wiped you out.

      Do you want to at least try to predict the low/bottom (Dow==0, I guess) and earn some respect or are you just going to continue to Post-N-Ghost?

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  3. Ari Baba

    You failed to note that the VIX ended the day unchanged.

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    • numbersgame

      Yes, but at the same time, it is at the highest *close* since February. Also, we’ve had an elevated risk for several weeks now. We’ve had sevral failed rallies as well, and bonds have been performign consistently defensive. This means that it will be very hard for rallies to ahve any legs, because any sign of weakness will be sold. I’m very comfortabel holding short positions through rallies until the weak hands abandon hope, ala Bitcoin. A VIX spike above 30 would be a good start.

      Also, there are still unscarred investors who don’t understand the first thing about valuation. AMZN, TSLA, and NFLX are evident of this: they are exrememly trendy and they remain relatively unscathed. “Unscathed?” you may ask, looking at the 20% down moves. Yes.

      YTD:
      SPY: -6%
      QQQ: -0.8%
      TSLA: +7% (it is down 10% this week)
      AMZN: +28%
      NFLX: +39%
      :
      NFLX has such a terrible business model, but you don’t realize that unless you look at the numbers. Even a novice should question why NFLX makes so much more money per customer **mailing DVDs** than they do delivering content via the internet. Does that seem at all intuitive? Hasn’t bothered invester for years. It’s a reals emperor-has-no-clothes stock. Or if you look at analyst reports they come i ntwo falvors: (1) they compeltely ignore valuation and just rely on technicals/trend or (2) they perform a valuation with optimistic projectiosn ***and are wrong each time*** (see Credit Suise reports). Of course, as long as the stock keeps going up, bulls don’t cares.

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  4. ferd

    Nice job pressing your bets into the FED Fly …DRIP in particular.

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  5. ferd

    After-work checks on acct balances combined with some “they have NO idea” from Cramer tonight, could make for a nice morning flush tomorrow.

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  6. roundwego

    Moral hazards are everywhere with people with their heads in the sand as the barbarians with yellow vests storm the gates.

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