WALL STREET ENDURES HORRORS ON FRIDAY THE 13th BLOODFEST

The market got absolutely poleaxed this weak, led lower by crude and retail stocks. There is a very tangible concern about this holiday season, after seeing numbers out of Macy’s and Nordstrom. Home furnishing stores also took to the bottle, with big ass losses in BBBY, KIRK and PIR.

Both GME and HGG led electronic stores lower. And there were about a dozen or so retail stores with shares down in the double digits.

Oil and gas was a sideshow, but also lower–as crude threatens to trade with a 3 handle. It’s clear to me, as well as many others, that the Fed is causing a problem with markets. Their incessant obsession to begin a series of rate hikes has people running away from anything that isn’t MSFT and FB.

The only sector, out of 200+ inside Exodus, that was higher this week was brewers–because people are getting drunk as fuck.

Europe is being invaded by zombie hordes of savage middle easterners. America is overrun with bad burritos from CMG. And Asia is a giant spiraling toilet bowl waiting to be flushed.

These are hardly times for us to be celebrating the revival of American exceptionalism, something the Fed seems to be doing.

For the week, I shed an enormous amount of gains. Every down day was worse than the previous one.  The Option Addict has been seeing the market with clear eyes and is giving a 5 day mini boot camp to rehash recent events and provide the content that was given during the iBC conference. For those of you who were unable to make it out to NYC this year, make sure you sign up for our online version, which begins next week.

My only point of hope for today is in my PAH position, one that has been sold and sold again, like a fucking whore in the south of Bronx. It looks like Bill Ackman caught his footing in VRX today. As such, his other positions are responding in kind.

Is that where we are now in this market, watching, tick by tick, the stocks of billionaire hedge fund managers to determine whether or not they will make it?

How many points are we down this week? Seeing markets dive like this makes you second guess yourself about the reasons why you became a trader or a money manager in the first place.  Boundaries aren’t being respected and the Fed isn’t putting up a bid for this market anymore. Instead, those fuckers have offers out.

I hate Friday’s in bear markets; they’re always the worst. Back in 2001-2003, I hated going to work, period. Those markets were similar to this, trends shattered inside of two days. If the market did rally, it was done in a very narrow fashion. It got so bad, I had to give up trading NASDAQS and had to rebuild my business around fixed income.

It wasn’t until we saw some real tax cuts and economic stimulus than did we see markets go higher again.

2003 was an epic year for me. It was the rebirth of Le Fly, career wise. At first, my gains were deliberate and moderated. Then I got the gist of it, sort of like riding a bike, and I was off to the races, throwing up huge numbers at my firm–once again.

Bull markets make you do stupid things, just like how I traded stupidly last year, so heavily concentrated in expensive tech into a bad decline. We all have muscle memory for upward surging stocks, thanks to years of unabated gains.

But we’re closing in on two years of rough sledding and I think it’s fair to say the bull market we grew to enjoy from 2009-2014 is over. It has been over for nearly two years.

The markets have been in free fall mode since the last jobs report. Each and every day, the Fed send a talking head out to make speeches about the virtues of rate hikes. The last time the Fed and Europe were going opposite directions with rates was 1994.

To be clear, the Fed believes the world is in a good place. Perhaps they’re not paying attention to the $628 billion in bad Chinese bank debt, or the deepening recession in Latin America, or the weaker than expected German manufacturing output.

Maybe, instead of looking at the jobs numbers, they should looks at oil, copper, steel, aluminum, and try to extrapolate how the the U.S. might look after 100’s of billions of dollars in petrol debt goes bad, sending oil men to the unemployment line by the thousands.

I think the Fed would be wise to examine the retail landscape and see WMT’s and M’s last quarterly reports. They might even want to take a look at JWN’s today, just to get an idea how the well to do are doing.

The Federal Reserve governors and their chief, Janet Yellen, are living in a fairy tale world with pixie dust covering butterscotched candies, clubbed sandwich lunches, impromptu pediatrist appointments and pearl brooches. They’re all delusional or worse: they might be purposly driving the U.S. economy into the sewers.

Here is a brief summary of recent Fed head comments:

Fed’s Lacker says monetary policy impact on real economy has been limited; inflation figures are not implying a departure from Fed targets.

“We can’t wait until we see the whites of inflation’s eyes; if we did, we would overshoot the mark,” Williams said. “An earlier start to raising rates would also allow a smoother, more gradual process of policy normalization, giving us space to fine-tune our responses to any surprise changes in economic conditions.”

Fed’s Rosengren says it could be appropriate to raise rates in December; has seen real improvement in the economy since October meeting

Fed’s Bullard says rise in dollar has already been priced in; global fears that caused the Fed to delay have largely dissipated; probability of a Dec hike at 80

The U.S. economy is overcoming the “sizable shock” from the dollar’s appreciation and foreign weakness, said Federal Reserve Vice Chairman Stanley Fischer, on Thursday. “The U.S. economy appears to be weathering them reasonably well,” Fischer said in a speech to a conference on rate policy hosted by the U.S. central bank. The dollar has appreciated by 15% since July 2014, and it will remain a drag on gross domestic product well into next year, Fischer said.

All future committee meetings — including December’s — could be an appropriate time for raising rates, as long as the economy continues to improve as expected,” Rosengren told an audience Monday in Portsmouth, Rhode Island.

Fed’s Mester says U.S. economy can handle a rate increase; sees strong case for lift off

In New York, William Dudley said: “I see the risks right now of moving too quickly versus moving too slowly as nearly balanced.”

But New York Fed President William Dudley said that “it is quite possible that the conditions the committee has established to begin to normalize monetary policy could soon be satisfied.”

“While the dollar’s appreciation and foreign weakness have been a sizable shock, the U.S. economy appears to be weathering them reasonably well,” Vice Chairman of the Federal Reserve, Stanely Fischer said.

“The committee has been very clear that the normalization path here is going to be shallower,” than the steady quarter-point-per-meeting hikes used by the Fed early this century or the faster hikes enacted in the early 1990s, said James Bullard, St. Louis Fed President.

These fuckers should be taken to the gibbet, in the city square, and beaten unconscious with a cat o’ nine tails.

I could not have been more wrong about my SHAK diagnosis. After the earnings beat, considering 64% of the shares were sold short, I felt the stock was fixing to go on a gorilla run higher.

Wrong.

I misjudged the risk appetite, again. Truth is, SHAK is still trading 10x sales and the landscape for the restaurant industry is 100% shit, sans MCD. Who could’ve predicted that?

I am sure some cynics did.

So now the question that begs to be answered: where do we go from here?

Considering the stock is down almost 15 points since they last reported GREAT earnings a week ago (FML), I’d say this fucked face stock is bound to bounce off the concrete. The prognosis now is very dire, seeing the shares knife lower on a daily basis, despite a bright future in clogging the arteries of hipsters everywhere.

If it were to come in line with its peer group, on a p/s basis, the stock would trade down to $25. It’s also worth noting, the company is subject to fucked up Fitbit styled secondaries from insiders.

This market has become a dumping ground, a fucking junkyard, for VCs and founders to get rich quick–fueled by out of control private valuations and a complicit investment banking conduit to a naive public.

The two main VC funds, as well as several insiders, including the CEO, are now sitting on billions in profits and are seemingly racing towards the exits.

Truth be told, I don’t blame them. FIT is a steaming pile of shit, who will eventually get destroyed by Apple. News came out this morning about the offering and I found it rather amusing, in a clown shot out from a carnivale cannon sort of way.

In the sale, Fitbit will offer 3 million shares instead of the 7 million it previously planned, according to a filing Friday. The number of shares sold by existing stockholders remains unchanged at 14 million. The price, $29, is 8.5 percent lower than the $31.68 close. The shares fell 6.2 percent to $29.71 at 7:21 a.m. in New York before the markets opened.

Let’s recap. The company itself, in good faith to the existing shareholders, reduced their part of the offering from 7 million shares to 3 million. However, their own CEO and the VCs said “fuck that” and kept their offering at 14 million shares and had the investment bankers price it deep in the hole in order to attract bag holders.

What a nice CEO.

For a broker, this is an easy sale. Clients will gladly take a secondary priced at an 8.5% discount to market, thinking they’ll flip it for a quick win. Brokers are fucking assholes and will buy anything with a sales concession affixed to it.

So there you have it. FIT shareholders fucked again, courtesy of you beloved venture capitalists.

FIT is cratering at the open, down 8%.

So I’m looking over the retail lanscape, trying to find rhyme or reason. I went into this with a bearish bias, seeing JWN and FOSL getting smoked into pig pits this morning. However, I left this study, fully convinced, this is a world fit for a lunatic and only one company is winning.

Here is the YTD performance of many of the top retailers.

Try to find a trend to this randomness. JWN was winning before today’s poleaxing. Macy’s was a great stock last year. Oh, and JCP is up 35% this year. I didn’t bother putting them on the list, however. No room.

As for the sole winner. AMZN is up 114% this year.

Have these people all lost their fucking minds? DB is out with a note today, suggesting the Fed might need to really jack rates up in order to slow down this runaway economy and to avoid inflation. Really?

“While the Fed wants to tighten financial conditions sufficiently to avoid an overheating economy, they also would like to be able to maneuver the fed funds rate as far away from the zero lower bound as possible,” argued Hooper. “Doing so will provide them with ammunition to combat future downturns using traditional monetary policy tools, and allow them to cleanly exit from the extraordinary policies that have dominated the post-crisis policy landscape.”

So, aside from trying to control this beast in a box economy, this fucking moron of an analyst thinks the Fed should move as “far away from zero” as possible, in order to have “ammunition” against a truly fucked up economy.

In other words, hike now to lower later, because shit might get fucked up in a jiffy.

What in the fuck are these pole smokers on?

I can’t fucking wait for this shit to blow up. It’s gonna make our housing crisis look like a rainy Halloween night when all the kids had to stay home and watch Charlie Brown, instead of trick or treating.

God willing, I will see to it to become a local warlord and seize my local water reservoir, holding power and influence over my area, setting up checkpoints to ensure no one enters or leaves without donating dry foods to my cause.

Chinese banks’ troubled loans swelled to almost 4 trillion yuan ($628 billion) by the end of September, more than the gross domestic product of Sweden, according to figures released by the industry regulator.

Banks’ profit growth slumped to 2 percent in the first nine months from 13 percent a year earlier, according to data released on Thursday night by the China Banking Regulatory Commission.

The numbers come as a debt crisis at China Shanshui Cement Group Ltd. prompts lenders including China Construction Bank Corp. and China Merchants Bank Co. to demand immediate repayments and as weakness in October credit growth shows the risk of a deeper economic slowdown.

While the official data shows non-performing loans at 1.59 percent of outstanding credit, or 1.2 trillion yuan, that rises to 5.4 percent, or 3.99 trillion yuan, if “special mention” loans, where repayment is at risk, are also included.

Knowing how the Chinese accounting works, they probably have a trillion in bad loans, emanating from all of those fucking ghost cities that they were building a few years ago.

Dr. Copper has been screaming out in agony that something is horribly wrong in China. Now we’re starting to get a glimpse of what it might be.

You know damned well it’s part of the human culture to go out for drinks, hoping it might lead to an after hours session of the intimate nature.

Having said that, I am not so sure about ‘spiking’ my best friends drink when she isn’t looking. That sounds sort of date rapish, no?

The ad, which was released in Bloomingdale’s 2015 holiday catalog and was meant to advertise Rebecca Minkoff merchandise, features a woman looking away and laughing as a young man looks at her suggestively. The text reads: “Spike your best friend’s eggnog when they’re not looking.”

The luxury department store owned by Macy’s Inc apologized for the ‘inappropriate’ eggnog advertisement on Tuesday.

“In reflection of recent feedback, the copy we used in our recent catalog was inappropriate and in poor taste,” a spokesperson said in a statement. “Bloomingdale’s sincerely apologizes for this error in judgment.”

I’m pretty sure the homo-hammers at Bloomingdale’s outsourced this ad to some fucktard ad agency, who wanted to be ‘cool’, ‘edgy’ and ‘hip.’ The problem with ad guys is they’re inherently creepy dorks, sliming about the office lurking for trends and trying to be cool. They bend to the caprices of a millennial generation who is totally devoid of human decency. As a result, they craft million dollar ads promoting date rape.

Message to Bloomingdale’s: quit trying to promote forced coercive sex and get back to being good merchants of overpriced textiles.

It’s rather befitting to see the market appreciably lower on this fine day, the 8th birthday of iBankCoin.

Stocks smashed lower because the Federal Reserve is hell bent on destroying the capital structure of CHK, which fell by another 3% for the day. I invite all of you to join the ranks of Exodus to get an edge in this sordid affair.

My largest position, COST, faired well. Nothing is able to stop the Costco juggernaught. I do not pretend to have massive upside in it. I am merely content with not fucking destroying myself in it.

Nothing is working. Everything is shit. The world is a wretched placed, filled with goons and goblins. War, pestilence and famine are right around the corner.

Now if the market trades up tomorrow, my animal spirits might cause me to get real bullish again. But, just know, right now I am seeing things clearly and truly for what they are. The scenario that I am going to paint for you is likely to play out, once the Fed begins raising rates.

We will parallel the great fuckery of 2007, when the Fed purposely induced a housing slowdown, which caused the crisis we all know as “The Great Recession.” The amount of oil and gas debt is in the hundreds of billions. Since 2009, Wall Street has been sucking the dicks of big oil, shilling for them, issuing fuckloads of products, financing oil fields in Bumfuck, USA.

All of the chickens are coming home to roost, rest assured.

Credit is going to seize up and the dollar is going to the your albatross, gaining by leaps and bounds, pushing crude to the point of desperation. Bankruptcies, largess, will press stocks lower to levels not seen since 2011.

Forget about 2016. We might mark time here until year end. But if the Fed gets there way, we dive lower by 30% in 2016, led by catastrophic declines in most commodity related stocks.