Operation Make Me Sick

Everything is falling apart. The world is burning and the Fed is buying 30 year bonds to lower mortgage rates, yet banks do not lend money to people. So what’s the point?

Bernanke stepped in with a meek $400 billion. Not enough.

The result: massive sell off in equities, crushing everything in its path. The GOP should be pleased now, as this economy is sure to devolve into a devastating depression.

As for me, I did everything wrong. I had over 10% of my holdings in TLT yesterday, but sold to finance a purchase in AG. I am now down 4% in my AG position. My tech shares are going lower, albeit not as much as commodities. Speaking of commodities: they are in a NO BUY ZONE, ever. Expect dramatic eps cuts and wholesale liquidations by hedge funds going bust. The sector is over-invested and the great unwind is going to continue. See ANR, WLT and FCX to see what the great unwind looks like.

I am far from out of the game, still up around 9% for the year. However, this move to the downside is especially worrisome because it is occurring at oversold levels. In other words, we could get a real fucked up sell off soon, firmly placing us in the 4 digit range for the Dow.

Just to recap what I’ve been telling you: pricing in a recession, in my estimation, puts the S&P at 850 to 900. Any rallies should be sold and cash should always be heavy.

Holy shit bonds are soaring now. Be patient, prospective home buyers. You will be able to get a 30 yr mortgage for less than 3% in no time at all.

The initial market reaction is ALWAYS wrong on Fed days. I’ve warned you about this countless times. The news by the Fed was as expected and frankly not enough, in my opinion. However, it’s important to note that Ben Bernanke just outed his cigar on the faces of the GOP.

Fuck you GOP. Ben’s pimp hand is indestructible.

The outlook is bad and you should take heed to the Fed’s warnings. At a minimum, this means no margin accounts or large directional longs bets through derivatives. Eventually, this market is going much, much lower.

However, I am not against a little cocaine induced relief rally either.

For now, I am in a holding pattern, still with 30% cash. Earlier today I added to my AG position. But precious metals are now under pressure, as TLT goes fucking gangbusters to the upside.

Fuck. I should have held it.

Forget about the silly european debt crisis and downgrades of US banks by Moody’s. Do you want to know where the real dangers lie? In case you didn’t know, China.

Look at WLT’s earnings warning today. That is unassailable proof that China is slowing down, drastically. As a matter of fact, do not be surprised to hear about a full fledged collapse in their cardboard economy, and soon. Make no mistake, the materials, led by copper, have been warning you of this reality for months now. Admittedly, I was a bit skeptical. However, after today’s evidence through WLT, I am convinced: we are heading for a most heinous economic downturn.

Clam this, clam that.

The Fed can create inflate. Before QE, monthly CPI was at the lowest in recorded history, at 0.6%. One year later, it was north of 2% But if the buyer of last resort (China), goes offline, we’re fucked.

My minimum cash level is 30%, which is exceedingly high. I intend to bank a little coin in my longs, believe it or not, just prior to selling them for mounds of cash.

Gentlemen, I hope you are dressed to the nines, as instructed (tux, white gloves, cane with ivory tip and top hat). The fate of your country, as well as your bullshit portfolios lies in the balance.

Top picks: AG, LCC, VMW

Rumors are running rampant in Europe, surrounding French banks. There is talk the government is going to force French banks to merge, in order to recapitalize and Qatar taking a stake in BNP Paribas. On that news, French banks are rallying and US futures are climbing.

Goldman upped the price target on AAPL to $520 and Janney lowered the price target on NFLX to $102. Clearly, there is a tale of two cities taking place in America, where the haves and doing exponentially better than the have nots. Howsoever, that doesn’t mean the government is entitled to redistribute capital on behalf of the “little guy.” People who are rich worked hard for their money. They shouldn’t be penalized because the dicksuckers in Congress don’t know how to manage a budget.

I read a story yesterday that the Department of Justice spent $16 per muffin, $10 per cookie and $8 per cup of coffee for their fucking conferences. Really? You have to be kidding me. And then these same assholes come to us and say “we all have to pay our fair share.” How about this, go to Dunkin’ Donuts for your coffee and lay off the fucking cookies and muffins you fat faced hacks. Not only will you save the country money in cookie expenditures (yes, I said “cookie expenditures”), but you will avoid a coronary, leading to even more savings by not having to foot the bill for your hospital expenses.

Mr. 0bama, do you want to create new jobs without spending another nickel? Here is my proposal. Since we all need to pay our fair share, ask your people at the Unions to implement a 20% pay cut across the board, in order to hire skilled American workers. That makes sense, doesn’t it? We all share in the struggle, build a sense of community across the nation. It will be good for the soul.

Into the Fed, I am staying put, 70% long–mostly in tech.

Today was clever. Even though I lost, I do enjoy watching the market do extraordinary things. I am a fan of the stock market first, investor second. Today’s incognito decapitation of the bulls was perfect. They lulled suckers like me into the tape, with headline strength. Slowly, they boiled the clumsy pigs all day in underperforming momentum names. Then at the end of the day they threw down the gauntlet and QWICKLY (NFLX) decapitated all of the bulls, AND MORE.

The S&P showed minor losses, but the damage was far more extensive.

Should that fuckfaced Clam do nothing tomorrow, you’re all going to hell. And, you’re getting Rick Perry’d too.

Nevertheless, sleep well and try not to worry about stupid shit, like money. Eventually, this shit will sort out and we’ll all be rich as fuck, or desperately poor, battling one another for water sources and/or farm land. I went from gains to losses, like a gentleman in the night, tipping his hat to a lady draped in pearls. I didn’t bitch about it like some of you dicksuckers, but behaved in a very dignified and honorable manner.

Tomorrow, for the occasion, I expect all of you to visit iBankCoin dressed in a tuxedo, top hat, white gloves, black cane tipped with white ivory. Failure to do so will lead to your immediate banning.

NOTE: Women ARE NOT exempted from this dress code.

Just 51% of stocks are up today, with marked weakness in commodities and tech. In other words, despite what the indices say, we’re really down today. Many widely held stocks are weak, including some of mine. As the day progresses, tech falls into “QWICKSTER MURDERHOLES.”

Don’t worry about me, pal. I’m in the high income tax bracket, paying for all of your food stamps. If I lose money, I will simply chalk it up to “paying my fair share”, fully supporting the communist regime in America.

In summary, I sold out of TLT, added to VMW, LCC, CIEN, AG, MU and LCC. For the day, I am barely up, grossly underperforming the broader indices. To be fair, I am underperforming HD, but fantastically outperforming shares of NFLX.

True to the game and consequences, I am going into Le Fed day with a 70% long position, reserving 30% cash for market calamities.

I added to all three positions, lowering my cash position to 30%.

The Federal Reserve is going to punch you in the face, one way or another. The market is in lift-off mode right here, solidifying my belief this is a net long or all cash tape. Getting short here is too hard, due to policy risk. If you want to short, wait for the crisis to pass and base your picks around the economy. At this stage, everything is whipsawing around, in frantic, panicky, retard mode.

I sold out of all of my TLT position for a small gain and have begun allocating said dollars into AG. I have my reasons, all revolving around the idea that silver stocks outperform during risk on periods and are sheltered during “fuck you, you’re dead” modes. And, with “Operation Twist” right around the corner, I am a seller of treasuries.

I tripled down on my VMW call position and added to common. I am rather emphatic about the prospects of airlines, even though they are hated. The numbers look good. Take a minute to look at them before casting aspersions. God willing, cracks come in and LCC soars.

With regards to WNR: it is now a minority position of mine, less than 5%. I simply could not wait any longer for the stock price to catch up to the fundies. However, I look forward to revisiting the name, down the road.

I am tempted to get long NFLX here. However, the stock is under too much pressure, due to insane headline risk. This saga will be memorialized in college textbooks on how NOT to raise prices and fuck up your company in the process. It is unbelievable how much damage was afflicted to this company because of intervention. NFLX reminds me of the US government, always meddling with customers (tax payers). Sometimes you just have to let things flow, especially if the model isn’t broken. I am not sure who benefits from a wounded NFLX, aside from short sellers. But, these sort of blackswan drops rarely portend something big. Everyone thought BP was going to zero when they fucked up the GOM. Yet, the stock was on sale during the crisis and advantageous longs benefitted greatly from buying the blood. Without a doubt, buying the NFLX blood will reward people handsomely. The only question is: when? If I were to buy, I’d implement a buy program, acquiring shares every 5% down, starting with a 50% position now.

I bought a large amount of AG.

UPDATE: I added to my VMW position.

Disclaimer: If you buy AG because of this post, the next time you see Hugh Hendry in the street, he will punch you in the face. And, you may lose money.

I sold out of my TLT position.