Markets Are in Collapse Mode, Ahead of Biden’s State of the Union

Listen to me, it’s all a disaster. Oil is up 10%. Wheat and corn through the roof. We are memeing out way to war with Russia, powered by the notion they’re all rookie fools on the battlefield according to CNN and my Twitter feed.

Disaster!

We can take them! Come on, please give feudalism one more chance and have your sons fight and die for corporate interests over there in Ukraine. Whatever the fuck they have going on there is so important it has caused world wide tumult and the President of Ukraine, the hero Zelensky, just handed out FREE AK-74s with ammo to his citizens! Imagine that — giving weapons of war to untrained people to go and fight the Russian army. It will be a massacre.

But don’t worry, there’s more.

He’s also having his citizens STACK MOLOTOV cocktails high inside cities to use on the invaders. I am sure these imflammatories will be 100% safe when the Russians begin firing artillery shells into Kiev. All of this is designed to keep a regime in power, sacrificing people on the altar of national pride. While for some, this might be a preferred mode of death — dying for some people up top who enjoy their global position. But for others, not so much. Nevertheless, if you’re between the ages of 18-60, you have been conscripted into the Ukrainian army to fight against tanks. But don’t worry — the fucking Swedes are sending more NLAWS. They are certain if the Ukrainians destiny enough tanks and vehicles the Russians will simply tuck tale and run back to Russia.

In other news, tonight our dead President will make a speech, likely about rights for lesbians and people of color, squeezed in with a little Russia, and then rattle on about climate change and how we all need to sacrifice more to be energy independent, leaving out the part that the Keystone pipeline would’ve replaced ALL Russian oil we buy from them daily. Moreover, and this goes without saying, since that cunt got into office US oil producers have been producing 1 million barrels per day LESS THAN they were under Trump, thanks to wonderful environmental restrictions.

All of this, and so much more, is lending to the Dow’s annihilation today — OFF BY 700+ and we’re not done.

The former President of Russia and current Chair of the Security Council of Europe had some choice words for France today, after statements by their Finance Minister saying the west was in the process of collapsing the Russian economy.

French Finance Minister Bruno Le Maire said: “We are going to wage a total economic and financial war on Russia […] We are going to cause the collapse of the Russian economy.”

Russia’s response:

Today, some French minister has said that they declared an economic war on Russia. Watch your tongue, gentlemen! And don’t forget that in human history, economic wars quite often turned into real ones

— Dmitry Medvedev (@MedvedevRussiaE) March 1, 2022

He even sent another tweet in French to avoid any confusion. Things are certainly ratcheting up, as the US now alleges Russia of war crimes, very rich coming from America all things considered.

All of this is having a profound effect on crude, now up 9% to $105 for the session. Interestingly, many oil stocks are down, however, due to overall market weakness.

LMT and other defense stocks are up sharply again today.

In related news, Moldova is next!

PHOTO: Image released of Belarusian dictator Lukashenko addressing his security council appears to suggest that Russian invasion forces also are planned to move into the breakaway Transnistria region of Moldova. pic.twitter.com/HkVzsvtyAo

— Conflict News (@Conflicts) March 1, 2022

For those unfamiliar, I operate a quant account inside Stocklabs where the software generates picks for me, based upon various fundamental and technical categories, and I buy once in the beginning of each month — basically swapping out 20 stocks for a new 20 stocks each month. Weighting is 5% per stock and no matter what happens in the world, I do not interfere or offer my opinions or bias regarding the picks

Last month we saw gains of 4.3% thanks to a heavy allocation in oils. Here are all the returns for this system on record.

My trading account always does better, but the time I dedicate to perfect my craft there is too much for many people, especially those who work for a living and doesn’t just hang around the house waiting for trades.

Either way, all trades and real time portfolio updates are available to any tier member inside the hallowed halls of Stocklabs. I’ll be allocating a new quant at noon.

As for my trading, I closed my hedges and many longs, raising cash to 62%. I’m up more than 1.1% at the time of this post.

While Europe focused on ESG and trying to save the planet from the carbon scourge, Russia was mining and expanding industry to the point where, irrespective of sanctions, the country can self sustain. They don’t need western banks or SWIFT.

You know what people need?

Food and energy.

Guess who has that?

Russia and Ukraine, and Belarus is a major exporter of potash.

If you’re wondering why wheat and corn is spiking like oil, that’s because Russia and Ukraine produce it and feed all of Europe.

Most importantly oil and gas.

That’s Russia too.

oil

aluminum

iron ore

The subsequent result of the Ukraine-Russian war, but more importantly western sanctions, has been a spike in all commodities on top of the spike we already endured due to COVID stimulus checks and loans that ramped inflation. We all suffer, some more than others.

If you’ve been following the war on Twitter, General Zelensky and his army are undefeated. They’ve been marauding the countryside just killing Russians and putting holes in their tanks and zapping their planes out from the sky, with zero setbacks other than the fact that all of their cities are surrounded and under siege.

Russia also has mandatory conscription for all males 18-27, a standing army of 1 million and 13,000 tanks.

Germany has 65,000 men and 250 tanks.

So you can see why they’re panicking,

I know, Russia is finished and Putin is a goner. Nevertheless, prepare for a price spike in virtually all commodities and dislocation in markets very soon — because the only thing that pauses this ascent is demand destruction and you know how we get that, don’t we?

SIRS —

The NASDAQ was down 4.5% for February, a month RACKED with crisis and cataclysm. We summarily shifted away from a Gay Giraffe market and into a real one — a market requiring skill.

I stand before you supremely victorious — +18% for the month. My automated Quant account returned 4.3% for the month, shattering your local money manager’s billion dollar book.

Look, I do not expect you to believe what I am saying. Simply join Stocklabs and see for yourself.

My analysis is simple: The market is pricing in an American World War victory of an immediate fashion. We do not have any concerns whatsoever. The stupid Russians are cucked and cowering inside their vodka bottles and will never seek revenge against the west for this entire episode in General Zelensky defeats Russia for good, paving the way for his inevitable honor of hosting Saturday Night Live in America, as we celebrate with Champagne corks speeding into chrystal chandeliers, the greatness of Western Society and its hegemony that is being reflected and enjoyed at this present time.

I closed nearly 100% long, with UVXY and SQQQ hedges, large emphasis on oils.

My YTD gains now stand at +9.3%.

It doesn’t get more explicit than this:

RUSSIAN FOREIGN MINISTRY SAYS THOSE SUPPLYING LETHAL WEAPONS TO UKRAINE WILL BEAR RESPONSIBILITY SHOULD THESE WEAPONS BE USED DURING RUSSIA’S MILITARY OPERATION – IFAX

Markets legged down on that news and are now at session lows -555.

We were enjoying respite, but then this press release sucked people out from their transgendered fantasy land and make into the battlefield of suffering.

I had gone heavy cash, but nibbling at UVXY and SQQQ to hedge. I have ATSG which does cargo shipping for the DOD and a little DNN, BWXT and CCJ for exposure to nuclear energy and uranium. My potash position is MOS and I own some BOIL in case Europe freezes over, amongst other things.

Towards the end of the session, I want to have exposure to commodities and have it hedged just the way I have it now, only bigger.

Markets are taking all of the saber rattling in stride, with numerous sectors blasting off based off pipe dreams of peace and prosperity. In the real world, Zelensky is asking Biden to go to war with Russia, by creating a no fly zone over Ukraine, in order to save his regime. Makes sense — preserve power by any means necessary. Encourage civilians to take up arms and die for his right to rule over Ukraine. If all else fails, drag the entire planet into the war and set off a world ending nuclear war, all because you wanted to be king.

My interests do not align with Ukraine’s and I could give two fucks if Zelensky was in prison or in his palace. What I do care about is my country and the people that live in it — racing towards death for a purpose that does not concern us — but it does concern our ruling elites who use Ukraine like a rubber ducky squeaky toy.

Here are some headlines:

CHINA: “One country’s security should not come at the expense of anothers security.”

KREMLIN: LATEST COUNTER-MEASURES WON’T BE ONLY RESPONSE: TASS

ZELENSKY IS URGING BIDEN AND NATO TO IMPOSE A NO-FLY ZONE” OVER SIGNIFICANT PARTS OF UKRAINE STATING THAT “UKRAINE CAN BEAT THE AGGRESSOR IF THE WESTERN ALLIES DO THEIR PART.” – AXIOS.

ERDOGAN SAYS TURKEY TO ABANDON NEITHER UKRAINE NOR RUSSIA TIES

RUSSIA SAYS UKRAINE AGREED TO ANOTHER ROUND OF TALKS: IFX

RUSSIAN MINISTER SAYS WE AND OUR ALLIES CAN DUMP EUROS AND DOLLARS AS WE CANNOT TRUST THESE CURRENCIES – INTERVIEW ON LOCAL MEDIA

Russian ships are banned from docking in British ports.

Bill Ackman: “Is there a point at which we say it is un-American to sit back and watch this transpire?”

One thing of note with the Russian Ruble collapse and the remarkable weaponization of the USD, China has to be looking at this and wondering about their exposure to dollars and treasuries. Russia, for all intents and purposes, are being cornered — similar to Japan in WW2. Me jawboning about this is meaningless. I will say, markets have been easy to trade, with predictable morning ramps followed by late day collapses. Expect more of the same.

+510bps and nearly 60% cash now.

It was supposed to dump out and collapse, but here we are resiliently only down 80 NASDAQs. Energy is sharply higher and we are seeing something new today — gains in solar and alt energy stocks — likely due to Europe’s new focus on being energy independent from Russia.

The world is crazy. But in a time of chaos and tumult, some things remain constant, such as Le Fly bowling on his competitors — cresting once again and stretching his legs to RECORD HIGHS.

On this last day of Feb, I stand before you +17% for February. My focus is on what’s winning, whether that is short or long it does not matter. If you’re reading this and salty as fuck — do not get mad. “The Fly” has been trading for what feels like centuries and is well versed, expert even, in almost every facet of finance. If finance was a canvas, his mind would produce something like this.

Le Fly’s Mind

A great man once said “FISH LESS, EAT MORE FISH” and this adage applies now more than ever. You cannot trust your amateur self in a market such a this. You must rely upon the professionals to guide you through it — steer you into the right direction. It just so happens, as fate would have it, you could access such an individual inside Stocklabs (upgrade to pro and annual now!).

I must carry on now, as WW3 awaits me.

+400bps so far.

NASDAQ futs opened down 450 and I am pretty sure 50% of you are thinking “WILL CLOSE GREEN” for the session tomorrow, which is part of our problem called hubris. This whole crisis doesn’t sit right with me and the moves in the “west”, especially out of Europe are more than incendiary — more like declarations of war against Russia.

I am giving war with Russia a 100% chance of happening and many glued to Twitter believe this would be a fine thing to do — especially since we’re all fucking Ukranians now and need to defend democracy with every single last person on earth. We have cornered Putin and Russia into such a corner, SEIZING $400b of Russia’s FX reserves, crashing the Ruble, that he has no off-ramp other than to accelerate.

WTI is +6.5%, Gold +2%, and Natty is +3.5%.

These moves are mere child’s play compared to what they’ll look like once in an actual war with a country who has a history of never ever ceasing to press its case. While it’s true, the Russian military we are seeing in Ukraine isn’t as formidable as ours, it can still kill millions of people if mobilized to its maximum potential and then there’s the thing about ICMBs with an 11,000km range that cannot be intercepted by your fucking Iron Domes.

I just want to trade stocks and be left alone. For as long as I can remember, my country has tried to bait Russia into war, always casting them as an evil empire that needed to be purged. We are in the end game now and my opinions won’t mean much of anything if we do engage Russia in a World War — something I am certain LMT, RTX and Hollywood are thrilled by. I do not view human suffering as something we should race towards, but escalation is what we’re doing and you should brace for impact.

Before I get into the doomsday scenario playing out in front of us, it’s worth noting Russia’s armored columns are food for Swedish and American anti-tank weaponry. Both Javelin and NLAW systems have proven to be more than effective weapons against what seems to be antiquated forms of combat being used by Russia in Ukraine. The subsequent result has been a battle field strewn with the carcasses of Russian equipment and their dead. I hate to bring capitalism into this conversation, but I have to say this is one giant commercial for LMT and RTX, who are the joint makers of Javelin. Sweden’s SAAB makes the NLAW.

Along the point, Germany, for the first time in decades, is going to militarize itself, committing to $100b in defense spending this year and 2% of GDP going forward. I suspect this trend will spread worldwide, ushering in a new era of increased defense spending.

Earlier today Putin issued an order to increase Russia’s nuclear deterrence forces citing NATO’s aggressive posturing. Here is some good analysis on what he has up his sleeve.

UK’S GEN BARRONS HIGHLIGHTS RUSSIA’S DOOMSDAY ARSENAL pic.twitter.com/8P4561fIg8

— The_Real_Fly (@The_Real_Fly) February 27, 2022

Here are some other relevant headlines for the day:

RUSSIA-UKRAINE DISCUSS CEASE FIRE NEAR UKRAINE-BELARUS BORDER *

BRITISH FOREIGN SECRETARY: IF WE DON’T STOP PUTIN NOW, THE CONFLICT WILL EXTEND TO THE BALTIC STATES, POLAND AND MOLDOVA

Lukashenko Says ‘Harassment of Belarusians’ in Ukraine Could Push Minsk Toward a Special Op

Andriy Zagorodnyuk, former Ukrainian defense minister, says Belarus is about to declare war on Ukraine:

“There is information about airborne troopers from Belarus loaded on the planes to enter Ukraine.”

RUSSIAN TV IS SAYING PUTIN NEEDED TO ACT TO PREVENT A FALSE FLAG ATTACK AT CHERNOBYL

RUSSIAN DEFENSE MINISTRY: UKRAINIAN ARMY USES PHOSPHORUS MUNITIONS ON THE OUTSKIRTS OF KIEV NEAR GOSTOMEL AIRPORT

Council of the Federation: Russia will be delivering precision strikes on individuals on Ukraine’s territory who transport arms to Kiev

Russian state-owned media RT and Sputnik banned in all EU countries, EU Commissioner President says.

BP WILL EXIT ITS 19.75% SHAREHOLDING IN ROSNEFT

Some further analysis on the ongoing war.

UK’S GEN BARRONS: RUSSIA SEEMS TO HAVE STUMBLED A BIT pic.twitter.com/KpJCwoFKci

— The_Real_Fly (@The_Real_Fly) February 27, 2022

BONUS: Ukraine’s Vice PM announced Market is seizing all NFTs from Russian citizens and donating them to Ukraine. How nice is theft when you can justify it?

Received breaking news. @dmarket, a platform for trading NFT & In-game Metaverse items, decided to freeze the accounts of users from the Russian Federation and Belarus. Funds from these accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo.

— Mykhailo Fedorov (@FedorovMykhailo) February 27, 2022

From what I’ve gathered so far, Russia’s military force is far inferior to the United States, not even in the same league. Nonetheless, they do pose a serious threat to Europe and there is an increasing danger as they get bogged down in Ukraine. The worse it gets for them, the harder they’ll push and the worse the war will become — the nature of war in general I suppose. Nuclear aside, this doesn’t look like a Russian army that can threaten wide swaths of European soil — but there is always Lithuania and perhaps Moldova, so I suspect NATO is preparing for eventualities.

Another thing I’ve noticed is people have lost their minds again over yet another topic, seething rage on display with anyone of a different point of view. For example, how about talking about HOW we got here? Not relevant? Fuck yourself.

PRESCIENT THOUGHTS ON UKRAINE’S PATH TO CONFLICT WITH RUSSIA, 2015pic.twitter.com/1iFokTFrmT

— The_Real_Fly (@The_Real_Fly) February 27, 2022

As for markets:

Russia has $650b in FX reserves, of which $400b held in Western banks. I am not sure if that is subject to seizure — but if it was and I was Putin, I would certainly nuke every city on the planet until I got my money back. They also have $150b in gold, and $85b in Chinese bonds. You could expect a run on the Ruble soon and there is exposure in the western banks to Russian debt, in particular France. Russian citizens hold $285b in foreign currency held in Russian banks. You might see their central bank auto convert to rubles in order to stem off a heinous run.

Lastly, the west really looks stronger than ever. Their marketing blitz and financial penalties on display is a real deterrent for anyone else thinking about invading other US squeaky toys. Stocks will likely open down tomorrow on the specter of a world ending nuclear war. But expect it to bounce shortly thereafter.

Post script:

RUSSIA'S MEDVEDEV:

'THERE IS NO PARTICULAR NEED IN MAINTAINING DIPLOMATIC RELATIONS' WITH WEST.

'WE MAY LOOK AT EACH OTHER IN BINOCULARS AND GUNSIGHTS.'

— The_Real_Fly (@The_Real_Fly) February 27, 2022