Happy Anniversary!

For the 24th anniversary of one of America’s funnest days (the 1987 crash), I compiled some nostalgic videos for your bearshitters out there.

[youtube:http://www.youtube.com/watch?v=04_Y2rTSBms 603 500] [youtube:http://www.youtube.com/watch?v=2MyToTwag34 603 500] [youtube:http://www.youtube.com/watch?v=h9iE-bn0xBU&feature=related 603 500] [youtube:http://www.youtube.com/watch?v=5PUwr8DsYeg 603 500] [youtube:http://www.youtube.com/watch?v=YCUsb3y0Sr4 603 500] [youtube:http://www.youtube.com/watch?v=XFn1G2goDQw&feature=results_video&playnext=1&list=PLC11059F8336E2317 603 500] [youtube:http://www.youtube.com/watch?v=Lm_4j-_Dnwc&feature=results_video&playnext=1&list=PLC11059F8336E2317 603 500] [youtube:http://www.youtube.com/watch?v=o_fxEoF8Vl8&feature=results_video&playnext=1&list=PLC11059F8336E2317 603 500]

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News out of Europe is bullish again. The EFSF, as reported for weeks, will be levered up to $2 trilly in order to save the union. As a consequence, the European version of QE will lend to market liquidity. Hence, we are seeing a sharp short covering rally.

Last year QE2 was announced and I doubted the viability of such a plan. It took awhile to catch on, as I muddled through a VXX hedge. But, eventually, I caught on quick with enforcement, killing people from Thanksgiving to Christmas. No one really knows what European QE will do, other than stave off collapse. The reason why people are furiously bidding up stocks is because of last year’s experience. However, we ran with fundamentals too. It wasn’t all QE, frankly.

This year the economy is in disrepair and the EU is already flatlining to recession.

Aside from a one day, free money bonfire celebration, I am emphatic in my belief that this upswing is unsustainable. As a result, I remain in cash.

For the day, I am off by 0.1%, as VXX, EXH, TZA sink me, my vertically erect WNR offsets those losses and keeps me in a position of power.

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Nope, not buying it yet. On the other hand, I am not selling it either. Consider “The Fly” something of an enigma, a machine propelled only by winning. More so, he feeds of off your untimely defeat.

The rally is underway, after an early morning spike to the helmet. By golly, out of nowhere stocks screamed higher as if the sellers were lit aflame and tossed into ovens. Well, if I must take a position, it is to take nothing at all. I am short by a degree of 5% with 60% of my assets in cash. I am not betting large on a decline, despite thinking it will happen, because of the desperate nature of our policy makers to buoy markets–no matter what. That’s what stocks have been running on for more than 2 weeks.

As a matter of fact, I do not think the word “running” does justice to the type of V-shaped “fuck you, you’re dead” rhino stampede we’ve enjoyed lately. It reminds me of the market bottom of 1998, only without all of the “awesome and amazing” technological revolutions and booming economies to fall back on. This time around, we have “Robo-China” and their planned growth of 9.1% per annum, no matter what. How convenient for the world to have such a wonderful backstop. The Mother of all back stops, our benevolent friends, the Chinese.

No matter the Chinese send “mobile execution” vehicles to people who commit minor crimes for proper and efficient life terminations. As long as they keep the jackasses at FOXCONN in check, so that we can enjoy the genius of Steve Jobs, vis a vis shiny new iPads.

Then again, Wall Street is the enemy, since we make Apple’s stock go higher, which in turn employs more people at FOXCONN and the eventual execution/suicide of weak minded line workers. We are so fortunate to have the Occupy Wall Street crowd speaking out for the little guy, telling the world how evil Wall Street is, with all of their heavy handed policies and such.

Speaking of which, the war in Libya went well and we’ve managed to secure plenty of light sweet crude for the fucking Italians and French. Now that Libya is out of the way, we can redouble our efforts to focus on what is important, such as oil in Uganda.

As an aside, I’m sitting out this rally, in order fine tune by orbital space cannon.

[youtube:http://www.youtube.com/watch?v=NKYocOa2A2Q&feature=related 603 500]

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Goldman lost money on purpose, just to disarm the Occupy Wall Street crowd from sashaying around with headline news. They could have easily reduced compensation from 40% to a lower number and avoid looking like a bunch of losers. But “The Blankfein” is a clever bastard, always thinking ahead. Betting against Goldman has been a very successful trade this year. However, I sense the downside to the stock is now limited, ironically, now that they are booking losses, albeit on purpose.

As an aside, I’d like to offer 10,000 apologies to some of you for my recent spate of partisan commentary. Between Tea Party and Occupy Wall Street protests, I am losing my mind. I want to launch scud missiles–tipped with mustard gas heads– from my silo in Brooklyn, into said protests. I have the orbital space cannon (OSC) on standby and ready to vaporize whole columns of lightly armored vehicles.

As for stocks, I expect more downside today and for the rest of the year, especially on holidays. Whatever version of doom and gloom you have going on there, talking shit at cocktail parties, blogging about FEMA camps, “The Fly” one-ups you with talk of market crashes on Christmas and other such holy retail days. I’m talking about the Easter Bunny eating your face, whilst your portfolio hits zero. Sorry about that one. It is too early in the morning to even think about the fucking Easter Bunny.

As an odd form of consolation, please accept this “musical piece” as payment for my transgressions.

[youtube:http://www.youtube.com/watch?v=B16F0IQ-gX0 603 500]

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I closed out the day up, thanks to my rapid sales and EXH, VXX, TZA shorts. I did some reshuffling and I now have 20% of assets in WNR (yes, I bought today), 5% in GSVC, 20% short in EXH, TZA, VXX and 60% cash. The reason why I am so quick to sell is due to the possibility we all wake up to the market indicating down 10%.

Despite the cocaine driven euphoria of last week, the problems are really “that” intense. Although speculation and liquidity are able to drive stocks higher, the fundamentals, which actually mean something, are telling you to run.

Like I said numerous times in the past, the downside to the S&P is around 700-800. For the love of dead dogs and deranged cats, we are at 1,200! Think about how ridiculous that is, the market being up for the year, then get back to me with a real investment strategy.

If you want a real tangible reason to sell, look no further than SLF. First, let me remind you that insurance firms have massive exposure to equities and need yields to be rich. The fact that stocks have underperformed and treasuries have soared is the worst case scenario for them. Consider the fact that pension funds use inane math to calculate performance, such as 8% 10 year returns–based on “history.” Well that number is derived by the dependence on yield from US treasuries. Now that yields are drill bits, they need to outperform in stocks. Well, aside from the 14% one week return, stocks have been sucking dick. Hence, look forward to massive pension shortfalls and comically bad earnings reports from the likes of SLF, MET, HIG and others.

Sun Life earnings press release:

The Company expects to report a loss of $621 million for the quarter. On an operating basis, the loss is expected to be $572 million. Results for the third quarter include losses related to substantial declines in both equity markets and interest rate levels, which particularly impacted the individual life and variable annuity businesses in SLF U.S. The third quarter was a period of exceptional market volatility. North American equity markets dropped by 12% – 14%, while yields on fixed income securities fell amid economic uncertainty in the European Union and U.S. monetary policy actions aimed at lowering interest rates on long-term treasuries. In the U.S., treasury rates reached historic lows, with 30-year yields down 146 basis points to 2.91%. Under the Canadian insurance accounting model, the future impact of September 30, 2011, market conditions is reflected in our current period results.

Losses from equity market and interest rate movements were at the high end of the ranges previously disclosed in the Company’s Management’s Discussion and Analysis for the second quarter of 2011. Key drivers which resulted in market impacts at the high end of the estimated ranges included uneven movements across the yield curve and the impact of large, simultaneous movements in both interest rates and equity markets. Updates to the Company’s actuarial methods and assumptions, which generally take place in the third quarter of each year, contributed approximately $200 million to the loss. Sun Life Assurance Company of Canada remains well capitalized, with a Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio that is estimated to be approximately 210% as at September 30, 2011.

The Company currently expenses hedging costs for variable annuities and segregated funds in the period in which they are incurred. In the fourth quarter of 2011, the Company plans to make a method and assumption change related to the valuation of its variable annuity and segregated fund liabilities whereby it will provide for the estimated future lifetime hedging costs of these contracts in its liabilities. This change is expected to result in a higher level of future earnings from in-force contracts than would be the case using the current methodology. The impact of this change on the net income of the Company in the fourth quarter will depend on interest rates and other market conditions as at December 31, 2011, as well as further refinements to the valuation methodology. If this change was made under current market conditions the expected one-time reduction in fourth quarter net income is estimated to be approximately $500 million. The impact of this change on the MCCSR ratio of Sun Life Assurance is expected to be positive, as the increase in variable annuity and segregated fund liabilities will reduce the amount of regulatory required capital for these products.

“Losses from equity market and interest rate movements were at the high end of the ranges previously disclosed,” Sun Life said in a statement.

 

[youtube:http://www.youtube.com/watch?v=QRckY9N2sDA 603 500]

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Let’s put things into chronological order to better understand your mistakes. Two weeks ago you were stockpiling dry goods because western finance was on the precipice, at the same time China was melting the fuck down. By the way, Hong Kong banks stand to lose it all, should China implode. That’s another story.

Last week we enjoyed nirvana, as the market goose stepped higher based upon rumors of the EFSF ballooning in size thanks to, umm, more leverage. Sure, that will fix everything. Let’s create money out of thin air and have the fucking tight ass Germans backstop it all. I am sure the Germans are elated to help out their brethren on the backdoor of Europe’s ass.

You took the market at its lying word and bought heavy into overbought ranges. At this very moment, you disbelieve what your eyes are telling your brain, stubbornly holding longs based around the idea “that everything will be alright.” Well, everything isn’t going to be alright. The world is changing. People with fleas are occupying my city and I can’t get them to leave. The socialist movement, worldwide, is spreading like an infectious cancer. It is tricking the most ardent capitalists into believing in their plight. This is the work of professional propagandists and Marxists. “The Fly” will never be hoodwinked into believing the lies from the serpents tongue.

Back to the subject at hand: stocks are to be sold here until morale collapses. Then we will pick up the pieces and fire our trebuchets at the cowards who stand in our way.

Until then, my top picks are short EXH, long VXX, long TZA, long WNR, long GSVC.

NOTE: Rumor has it Einhorn is shorting GMCR. I am not sold on his rationale. Developing…

[youtube:http://www.youtube.com/watch?v=EDhRumQz97M 603 500]

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I sold out of OPEN, PWRD, RFMD, RENN and HSOL–upping my cash position to 50%. Additionally, I averaged down on my personal TZA position, mainly because we’re going the fuck lower.

At the present, I have a blend of longs and shorts, but mostly cash. I have every intention to skirt the coming correction, boasting trading precision this world has never seen before. I will conquer the land of Twitter and drives javelins through the skulls of people sleeping peacefully at Zuccotti park. Should you be camped out in Zuccotti and see a 1980’s style stretch limousine, run for the fucking hills; because I’ll be tossing m-80’s at the vagrants below.

I can only pray to the Gods for some sort of fucked up conclusion to the European debt crisis. Have you ever considered it is virtually impossible to save the European banking system via creating more debt, paid for by one nation: Germany?

Bottom line: the positions I sold were weak, speculative, high beta stocks that have the ability to crush me if we are on the other side of the mountain. So, I sold them and will not look back.

Preparing for winship.
[youtube:http://www.youtube.com/watch?v=G021t5ufAmk 603 500]

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Slow your roll; you’re carrying too much shit.

Let’s not get ahead of ourselves and believe this market is off to the races again. Like it or not, we are in a depression. Before you know it, you too will be drinking black smoke from grotesquely large mugs– alongside the Occupy Wall Street crowd.

People are buying Citi this morning, even though the numbers scream sell. Investment banking is down 30% yoy and you are going long. Holy shit, you need your brains examined.

Germany’s Merkel told people to shut the fuck up and quit dreaming about a quick fix to Europe’s problems. More specifically, if Greek debt holders take a “voluntary” 50% haircut, how much capital will they need to raise? Moreover, I hope you realize the only reason why it is termed “voluntary” is to prevent a credit event, via triggering CDS.

One amusing thing to note: PHG announced they are firing 4,500 people and a share buyback in the same statement. So, let me get this straight, they are firing people to save money, but will take savings to buy back shares?! I am seeing a lot of this tomfoolery.

Occupy Phillips.

I will be reducing my longs into strength.

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As the tick infested vagrants at Zuccotti park prepare to freeze to death in NYC, “The Fly” is roasting marshmallows for fun, whilst tossing 8k’s and 10q’s into the fireplace.

Futures are up and no one gives a fuck about protesters. The managing elite have big plans, all to do with “saving Europe” from a comical, knee slapping, exit from the 1st world.

El Paso caught a bid from Kinder, which should lend to the bullish tone early going.

It’s too early to make predictions, especially since Europe has less than 1 week to save themselves. Having said that, I do not like the jacked upped yields in Italy. That needs to be addressed before I can get bullish again. Until then, I am weighted long, with hedges and 25% cash.

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The people in Egypt wanted a change in government, just like the plebs in Tunisia and Libya. What are your goals? What is the end game? Meaning: what will it take to get you off my streets? Will the bankruptcy of Banc of America, Goldman and Citi quench your thirst? Or, are you interested in something greater? By saying “the banks are greedy and they should die” is immature and silly. Real men have demands. What are yours?

Thanks in advance.

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