A Tea Party Awaits

With TEA trading down again today, it’s a full buck below an all cash deal by SBUX. An arbitrage trade is to be had here and I might pull the trigger.

If you can get short shares of TEA, it makes sense to get long calls as a pair. A move from $14.5 to $15.5 in the stock will cause short dated call contracts to explode in price– if the deal happens. On the other hand, should SBUX cancel the deal due to a pesticide issue with Teavana’s tea, the brand will be fucking ruined for life. As a result, I expect the shares will plunge into the single digits. Should the deal close, you lose $1 on your short.

My hunch says the deal closes. Schultz isn’t buying TEA for its organic qualities, but branding and distribution. If anyone is capable of firming up quality control, it’s Schultz. If he cancels the deal, TEA is fucked.

UPDATE: Tabbed Blogger contestant, RHINO, just crushed a Pandora short trade. Well done.

After years of blogging on this site, I am always delighted to ban a discourteous reader or two. Since inception, we’ve banned thousands, countless miscreants, from even accessing the site, via IP ban. And in some extraneous cases, we’ve banned whole countries. Just like the tree of liberty, the soil of free speech must be nourished by the blood of the unwashed, every once in awhile. In this specific case, every single day.

Be careful for what you say here, as you have no idea who I am and what organization(s) I am a party to. For all you know, this site can be a mouse-trap of sorts, to build a database of dissidents for FEMA, for future extraction and liquidation projects. We all like to enjoy ourselves, some more than others. Some of you like to venture off to the Fontainebleau to get inebriated– then mow down unsuspected shoppers at bus stops with luxury sedans. But when you are here, in these great and famous halls, behave as you would inside of a church. Shut your mouth and listen, then ask questions in a dignified manner.

The Blogger Network is humming with people working hard to earn a spot on the staff of iBankCoin. As you know, it will be a probationary position, subject to the strictest minimum traffic standards, which will be monitored at the end of 3 months. To acquire the minimum required traffic of 3% share, you will need to promote your work on Twitter and other social networking sites. Let it be known, we do not allow for cross-pollination on StockTwits, so that avenue is closed for you. Also, in order to attain the minimum required traffic, you will need to post at least 3 times per day. Know this going into the elections this Thursday. If you waste my time with poor quality drivel, I’ll fire you myself straight away.

When stocks look good, they get faded. When they look like hell, they melt up again. I’ve elected to remain put with my positions because moving money around has been an exercise in futility. As I speak now, the market looks like shit. Who knows, twenty minutes from now it might look great?

It all comes down to The Fiscal Cliff and how much taxes are going up. Remember, Wall Street hates higher taxes and companies will suspend dividends in order to avoid them. We are looking at a potential albatross for stocks, one that can sink investor sentiment for good. Let’s face it, Wall Street hasn’t been very accommodating to the average investor, with its fucked up flash crashes, accounting fraud and incredibly corrupt IPO practices. Now the government is going to punish the old man in the wheeled chair, who no longer derives income from bank held CDs because rates are 0%, by raising taxes on dividend income!!?!

Holy shit, I can’t think of a worse way to ruin the market. It’s like they’re doing it on purpose, in order to funnel money out of equities back into real estate.

All I know is this: never trust policy makers. All they do it create and destroy bubbles. Make sure you have at least 30% cash before the year ends, maybe sooner. I am not buying a damn thing without selling something first.

TOL just reported better than expected numbers. This is no longer an aberration, but a trend. Expect to see homebuilders and construction material companies beat estimates handedly. If you’re still living in the dark ages of 2008, you’re missing out on one hell of a housing recovery. Go buy some property and quit with the negativity already; you’re making me sick.

Here is some housing data of some of America’s biggest cities. You cannot argue with the data.

And here is the national data.

I’ve been eying a number of stocks to buy, because it’s my belief housing will continue to do well. I’m so fucking conflicted about the economy, it’s ridiculous. On one hand, the numbers are great and expectations look good. On the other, if they remove the mortgage interest deduction, one has to surmise housing is going to take a hit.

Here are my favorites.

TOL, BZH, PHM, SPF, LEN, RYL, KBH, HOV, DHI, MTH, GFF, USG, OC, SHW, VAL, ANGI and Z.

The question is: will the government fuck up the recovery through onerous taxes?

When the Bush tax cuts went into effect, sometime in late 2002 or early 2003 (I’m getting old), the markets blasted the fuck off. Markets loved the idea of lower taxes, especially on dividend income. I can’t help but think, no matter how AWESOME AND AMAZING higher taxes on the rich are, this is going to fuck markets. Look at what companies are doing now, rushing to pay out dividends before the year ends. The tone is slowly changing right before our eyes and it will crest upon the completion of the tax hike agreement.

The only reason we are not fucked now is because of Santa Claus. The markets are benign, almost catatonic, as is customary during the month of December. We haven’t gone down more than 2% in December since 2002.

I can’t help but believe that January is going to bring hell. This is all very reminiscent of 2007, when I was saddled HEAVY SHORT into the New Year. Stocks were making new highs and everyone was high as fuck on the real estate cocaine train–until 2008 came. I don’t know what it is about year changes, but the market is very sentimental about the calendar. Brace yourselves for a very black January, filled with toxic smoke and chards of metal floating throughout your neighborhoods.

I am so convinced about this eventuality, coupled with the inevitability of us going over the fiscal cliff, I may rescind my promises to “never short the market” and just fucking do it. Stocks will quickly dive lower, as soon as 2013 hits because the forecast is grim.

If there is one thing that is a given, from my reservoir of experience, it is to BEHOLD the month of January, for it brings gifts of volatility and excitement.

http://www.youtube.com/watch?v=U3zW6uRRn3Q

I’ve been transfixed (literally) with some retail stocks, just sort of staring at them as if they were the black abyss. So many of them are interesting to me, knowing that my fellow American’s possess an innate proclivity to shop till they drop. Look at CWTR and CBK, both left for dead, now “zombying” their ways back up again.

Without further adieu, the following retail stocks are flush with cash, stuck on stupid, trying to turn it around. Because of their enormous cash positions, as a percentage of market cap, any material uptick in business with result in an immediate “liftation” of the shares.

BEBE
CACH
WTSLA
HLYS
KSWS
TRLG
BBW
STLY (not a laggard)
BSET (not a laggard)

Out of those names, I favor BEBE and CACH. But the volume is a bit too thin for me.

ISM numbers were horrendous, so stocks sold off–now everyone is worried about The Fiscal Cliff again. I swear the market wanted to roar this morning, when the futures were +7.

I’m getting lit in VHC and SWHC, but nothing too serious. They both trade weird and have longer term stories to the names, so the short term aberrations need to be taken with a grain of salt. With VHC, I cannot think of a reason why any short seller would want to have exposure to the stock ahead of the court date with Judge Davis and AAPL. Many believe some sort of settlement will be hammered out by then, effectively opening the floodgates to future licensing deals with a wide array of players. If that happens, shorts will regret the day they were born.

SWHC is a play on the 2nd amendment, which many feel could be at risk in two years. Because of that fear, people are stockpiling guns. Go look at the data, it screams of panic-impulse buying. Like any retail stock that has a product that is in heavy demand, SWHC and RGR should reap the rewards through superb quarterly reports.

YELP is ripping again. I kind of regret not buying it at $17. The risk with the stock lies with its valuation, trading 9x sales. It is priced as if someone is going to acquire them, which makes sense for a number of players out there. However, can the company ramp up earnings before that happens, to support this valuation? That is a the billion dollar question.

Lastly, I am long EXK because during the debt ceiling crisis, gold and silver ramped. It’s my belief that the same will happen once we dive off the fiscal cliff.

NOTE: I am still 30% cash.

Both Greek and Spanish bond auctions went better than expected. Don’t even bother trying to think this stuff through. The reason why I have a ‘long only’ mantra is because I am alerted to the fact that central banks want to create a bubble in equity prices. Just like they did with housing, they are doing the same for stocks. Every once in awhile, stocks start to reflect the horrible news and go lower. Then, like magic, some good news gets pulled from a Greek orifice and they trade up.

NEVERTHELESS, it is still my belief that we are going over the fiscal cliff, which should jar markets, until the bozos in Congress hash it out–sending markets roaring again.

For now, I am heavily long VHC, SWHC, EXK and UA.

Interestingly enough, Sam Poser aka “the only analyst who matters in DECK”, just upgraded the fury boots maker with a $65 p/t. Detail will be posted inside The PPT.

For all of you tabbed blogger contestants, I wish you good luck. Elections will be held in the city square this Thursday. The people of iBankCoin will select up to 3 new bloggers, all of whom will be subject to draconian burdens to meet and exceed traffic goals. A new era is here at iBankCoin and it’s an olde one that was once the standard on another orange site, where it all began. Bloggers will be fired with the same careless abandonment as a chain smoker flinging a cigarette butt or an anorexic discards a nightly snack.

If you’re scared to throw your hat in the ring. I understand; most of you are pussies.

NOTE: Just because the market wants to roar, doesn’t mean it will today.

http://www.youtube.com/watch?v=lJqTU2Tj7Wc

Many of you have emailed me about the open position(s) for writers at iBankCoin. Things are about to change here and I will let you know the ‘rules of the game’, as soon as you finish reading this wasteful sentence.

New blogger(s) will be elected by popular decree on Thursday of this week. If you do not post a blog in the Blogger Network, announcing your interest, you will not be put on the ballot. This means that you must make a pitch as to why people should vote for you. If that means shitting on your competitors, so be it. The first stage of becoming a successful blogger is to grab the attention of your peers.

Can you do that and get elected?

Once elected, you will be given all of the tools to become a blogging phenomenon. Your opinions will be read by the world and all posts will be retweeted through iBankCoin’s corporate Twitter account. HOWEVER, that’s where the fun ends. In order to remain a tabbed blogger, you must maintain a 3% share of traffic, which will be monitored, in true authoritarian fashion, every 3 months. No hard feelings, but if you can’t hold 3%, you will be let go.

Those who successfully maintain 3% share over 6 months might be inducted into a permanent role at the site, upon approval from the iBC board.

Let the games begin, fucked faces.

NOTE: If you do not have a blog in the Blogger Network and want an invite, email me at [email protected]

I know I’ve said it before and it loses it luster after so many proclamations; but I am in the market to acquire fresh blood, to be part of the “tabbed blogger” apparatus. If you want to write for iBC and be part of the most distinguished financial site the world has ever known, throw your hat in the ring and let it be known. If you are part of the blogger network, do a post. If you want to be invited to the blogger network, email [email protected] and we will give you an invite. Or, email me directly at [email protected].

Aside from the prestige, there is a monetary benefit from being part of the club.

NOTE: Readers and outside bloggers alike are welcomed to apply.

UPDATE: New bloggers will be decided by popular decree, a web poll vote for the masses.