Don’t Forget Who the Fuck You Are Talking To

I want you to remember something, especially the new coke can kickers, visiting iBankCoin as if you were worthy. “The Fly” wins all the time, even when he appears to be losing badly. My recent set back is like giving fat kids head starts in 100 meter dashes. Go ahead and catch up to me, while I sharpen my sword, readying to chop your heads off.

Sure, we all go through rough patches. What makes the mark of a man is how he gets up after being sucker punched. “The Fly” has a long history of getting knocked down, only to get back up with the vengeance of 10,000 serial killers in order to punch heads off with dynamite tipped brass knuckles. As you sit there doubting me, my wins are marinating in the refrigerator, waiting for Chef Fly to fire them up. Emphatically, I understand you cannot compete with a person, such as myself. However, let’s tone down the small dicked jabs at yours truly, for this market has been my bitch for a decade plus now.

What you need to do is focus on your revenue streams. Surely the stock market isn’t the only place where you bank coin. True wealth derives from what a man takes home on an annual basis. While it’s true, the stock market may offer outrageous tailwinds, upping discretionary income to Rick Ross status. However, at the end of the day, this shit is all smoke and mirrors. I try to illuminate things for you, best I can. But some of you are either too young or stupid to understand my message.

If you are risking capital today, may the Gods bless you. But don’t think for a second this sell off is resolved. The Europeans are more interested in ironing their tight shorts than deal with their banks. Wouldn’t it be a bitch if France nationalized their banks? Yeah, that’s what we’re dealing with now. You can make coin through buying the blood. And, this whole fuckness may get resolved, leading to a monstrous rally. However, the downside risk is too great if you are wrong.

France goes and the Dow sits on the high wall, chilling at 6,000, easing us into a turmoil.

Early this morning, I sold out of LCC and AG, upping my cash position to 90%. I believe this is my highest cash level ever, or since the tragic days of 2001. Back in 2008, I was all in short.

I still own a small position in GSVC and WNR.

Also, to hedge that, I started a very small position in ERY, with a tight stop.

My position is simple. I have zero interest in trying to time the next rally. In my opinion, we are on the cusp of capitulation, whereby overzealous bottom fishers get “machine gunned” down in unbelievable fashion.

I am rooting for the bulls; but I am the fuck out of this tape and will revisit it later next week.

Back in 2007-2008, Treasury secretary Paulson was doing ridiculously bad press conferences, stuttering his way into fits, trying to calm the markets. What is this fuckface Geithner doing?

ABSOLUTELY NOTHING.

He did one interview with Cramer and was very smug in his demeanor, frankly.

What is he waiting for, a surprise MS bankruptcy?

Clearly the market is suggesting something is severely wrong with OUR banks, not just Europe’s. Yet all we hear is “everything is okay” and “all of the problems are in Europe.” Well, looking at the insurance, brokerage and bank stock prices, I beg to differ.

Gold and silver are enjoying catastrophic drops this morning. If there is one thing Bernanke accomplished via “Operation Twist”, it was to annihilate the dollar haters and make treasuries the ONLY safe haven in the world. Think about it. The Swiss Franc trade is dead, as is gold and silver. Yen is still alive, for now. But the main beneficiaries are treasury and dollar bulls. Obviously, this bodes well for US financing.

I might execute one or two day trades today. But make no mistake about it, we are in liquidation mode. Tread carefully.

Obviously The PPT is oversold now. But that’s not what’s interesting. Today’s close tied the lowest technical score ever. The last time we were this oversold was 2/17/09. Shortly after 2/17, the market traded way the fuck lower, in “fuck you, you’re dead” fashion. It’s one thing to be oversold, but another to be dangerously oversold. The market is whispering something to us, ever so quietly.

For the record, I do not want a collapse and do not stand to gain, being net long. However, let’s face it, we have nothing to run on anymore. For over a year we ran purely on POMO and Ben Bernanke’s beard. Now we have to run on cheap stocks and a good economy. Get it?

I guarantee you policy makers will throw the kitchen sink at this debt crisis and at some point the market will scream higher. Because of this, I will not be shorting anything. As a matter of fact, I will be a buyers of basic materials at the right time. My list will be furnished inside The PPT.

Today’s sales were in tech. I cleaned out of VMW, AMD, MU, CIEN and FFIV. For all intents and purposes, aside from CIEN, they held up well during this meltdown. Had I went long some basic materials, I would have lost a lot more. I kept AG, GSVC (illiquid), WNR (less than 2% position now) LCC and will liquidate into rallies.

My buy list encompasses the most battered basic material stocks, with the best fundies and highest % of shares sold short. I want to own stocks that are heavily shorted because the short sellers offer support underneath the stock, via covering. Also, they provide excellent tinder when the tide turns.

0bama wants to raise taxes so that we can spend it on bridges and tunnels. Unfortunately, said bridges will likely be MADE IN CHINA. That’s right. This country is so fucked we’re actually outsourcing the production of our bridges to China, because of their slave labor. So what exactly are we doing?

Answer: importing slave labor.

I sold out of the majority of my stocks this afternoon because I genuinely feel we are at the precipice of a crash. The upside moves in TLT and UUP, coupled with the outright liquidations in commodity, tech and financial related names, has me thinking something very ominous is looming. Having said that, I left 30% of my assets long in the event we knee-jerk higher on policy announcements. Make no mistake, policy makers will announce something and soon. They cannot just let the ship sail into the sunset without trying to sink it first.

The reasons for selling was very simple and concise. I was down 4% intra-day and up 4% for the year. I cannot ignore such mathematical coincidences. I took it as a sign from the Gods and left the table a winner. When we do rally, I will be prepared to toss cash into the market like brokers throwing themselves into lit fireplaces tonight.

Everything is collapsing because cash calls reign supreme.

Coming soon: major EPS cuts, French bank rumors, Euro-Libor concerns, Italian 10yr bond concerns, US spending bill impasse, Rumors swirling around US investment banks and custodians, major hedge funds liquidating, and significant downside revisions in US GDP forecasts. The upside? Possible inflationary policy response aka “nothing new or special.”

For me, the choice was simple. My only regret is not selling yesterday.

I sold out of everything but a little WNR, GSVC, AG and LCC, raising cash levels to 70%.

More on this later.

As you read this drivel, I am down a little more than 3% for the day, OUTPERFORMING most sectors thanks to my 30% cash horde. Truth be told, it is very tantalizing to buy stocks down here. After all, we are absurdly oversold, based upon normal metrics. But things aren’t exactly “normal” are they?

I am pulling a decent amount of money out of my banks today and tomorrow. Not because I believe there will be a bank run, but because it’s entirely possible. They’re all fucking liars and there is no way I can guarantee liquidity, if BAC-C-MS seizes up. Siemens is pulling money out of Socgen and the COO of Blackstone said he can’t get financing for more than $1billion in Europe.

$1 fucking billion.

I will not buy stocks, unless I sell something else. The 30% cash level is now permanent, due to looming catastrophe. If stocks bounce here and run, so be it. The penalty for being wrong here will be finality. We are talking about a major move to the downside, without curbs or government help. The Tea Party will have their dish served on hot platters of surplus coals.

On the other hand, there is no way I can short stocks here either. We are too oversold to short now. While some of you are addled with ADD and find a need to trade something every 10 minutes, “The Fly” is interested in big moves. Therefore, my only concern now is preservation of capital, not capital gains.

As the day progresses, look forward to margin liquidations on an industrial scale. There are so many fucktards long commodities, short dollars, it’s almost funny. Granted, it’s been a popular trade to be long GLD, short UUP. However, the pain trade has now been applied to the necks of gold bugs and they shall join the margin liquidation party soon.

It’s Hugh Hendry TLT all day every day because nothing is safe. Think about that for a second. Nothing is safe.

Food for thought: Public companies like SCMR are now trading near net cash. What is their cash invested in? You got it: treasuries.

For today’s market session, I hired three violinists to play the shit that was playing in the Titanic movie, in order to set the mood. I am drinking brandy, ignoring EVERYTHING Mrs. Fly says to me. It’s as if she isn’t there, a ghost of sorts.

Early going, my losses stand at just 4% intra-day. I said “only” because I expect a great deal to come. However, the problem with selling anything right now is it goes against what my urinal shadows are telling me. So you know, the urinal shadow in the butlers uniform is a NET BUYER of stocks here.

Let’s put something on the table, shall we? Ben Bernanke is a fucktard. As such, I removed his iBC cocaine theme. He does not deserve it.

Hey, as the price of crude collapses, fucking hedge fund managers with vigor, jet fuel prices will drop. With that, airlines make money money. As logic dictates, profits will rise and the stocks will soar. HOWEVER, I am assuming people will still fly inside of airplanes. That’s the rub!

The market is singing beautiful tunes today. It is the songs of horror and desperation, designed by the devil himself. “The Fly” welcomes the end of the global banking system, so that he may begin his life of crime.

Oooooh, as my violinists go into diminuendo, the market is rallying. I need some fucking opera singers in here.

Developing…

Wow, I cannot believe my eyes. I am not just talking about the whoosh lower in futures. I am looking at T-bills trading at a negative yield and TLT north of $122. Euro Libor is at the 2009 highs and European markets are crashing. Moreover, the safe havens have been bombed, namely GLD. In this environment, everything trades lower.

If we are using the 2008 model, this is just the beginning. This crisis will be absorbed without TARP or bailouts. The political will is gone and we’re on our own.

Inflation was never real. I know Peter Schiff and others made millions off scaring people into believing that lie. But the truth is, the Fed can’t print money fast enough to offset the destruction of capital. Don’t take my word for it, go take a look at copper, oil and coal.

Regrettably, I missed this move to the downside. Hindsight is 20/20 and there is no point lamenting over losses. They just happen. As tempting as it is to deploy my 30% cash into this market, I will likely do the opposite. Despite being technically oversold, there are many other factors that take precedent.

This is it. This is the collapse that everyone said would happen. At this very moment in time, while our leaders twiddle their thumbs, the global banking system is collapsing. The only thing that has me scratching my brain this morning is Italian 10yr bonds, actually easing a bit here to 5.75%.

Aside from that, the European banks are way over-leveraged and our economy is in the grips of a deflationary vortex.

Good morning to you too!

I can’t sleep. My “calculator brain” is working overtime tonight, thinking of strategies to fix my situation. The great thing about the market: as long as you have capital, you can always make a comeback.

Looking over my screens, based upon the numbers in front of my face, a wide array of stocks are absurdly cheap. Or, maybe, just maybe, those numbers are lying to me. Like in 2008, had you stepped into names based upon value, you got the Grandfather Clock kicked the fuck out of you, as EPS for the S&P were slashed by 57%.

Let’s get bearish, shall we?

IF we slash EPS by 57% this time around, fair value for the S&P, based upon trough FPE of 13, is 530. That’s more than 50% lower from here, LULZ. So, before you declare the market to be “soooooo homosexually cheap” consider what I just told you. I find my lecturing especially humorous coming from a guy (me) 70% long into this mess. However, I promise you, on a stack of really cool King James bibles, I will repent for my sins against the stock Gods and get my shit together soon. See, if we have 50% lower to go, there is lots of time to get it right. In the big scheme of things, we’re barely down over the past 3 months, like 7%. I piss on 7%.

I hope you realize this market is EXTREMELY OVERSOLD at these levels. I mean, we haven’t been this oversold all year long. So, despite the gloom and the doom, like a fucking idiot, I am expecting a sharp rally and soon.

However, rallies should be sold into, until further notice. These are the things you need to look at, in no particular order.

Italian 10yr yields
Spanish 10yr yields
Earnings guidance at big industrial companies
TLT
UUP
FXY
GLD

If you can figure the shit out above and how they correlate with the market, you will figure this tape out. As of now, they are all showing signs of extreme panic. Incidentally, extreme panic leads to jubilation, as bottom feeders eat the carcasses of those being liquidated via margin calls. Oh, by the way, I know A LOT of people readying for margin liquidation. This is no garden variety sell off. The carnage in the basic materials, a sector heavily weighted by hedge funds, is destroying funds across America–like democrats on capitalism.

One other thing, beware of rumors that will start leaking out, regarding LM, MS and other asset management firms, maybe even custodians like BK and TROW. The credit markets are seizing up and things are about to get real sporty and fast.