BERNANKE TRIES TO ASSUAGE MARKETS, SAYS DECLINE MORE AKIN TO NATURAL DISASTER THAN TO GREAT DEPRESSION

Dr. Benjamin “Blunt Smoking” Bernanke is back and badder than ever. In an interview with CNBC, Dr. B laid down the law and told fuckers how it’s gonna be — categorizing the decline to a natural disaster than some depression of greatness. He then went into how shit was about to get real scary, but also how we’d bounce back strongly.

This is a very different animal than the Great Depression … this has some of the same feel, some of the feel of panic, some of the feel of volatility. But it’s much closer to a major snowstorm or a natural disaster than to a classic 1930s style depression,” says @benbernanke. pic.twitter.com/jL5KDMrM6y

— Squawk Box (@SquawkCNBC) March 25, 2020

There will be a “very sharp” recession in the next quarter or two, former Fed Chair Ben Bernanke says. “You’re going to see some really scary numbers.” https://t.co/nXMJosXKKD pic.twitter.com/TqbTDGGK7g

— CNBC (@CNBC) March 25, 2020

“Low interest rates are something we’re going to have to live with for a while.” Former Fed Chair Ben Bernanke says low rates are a “long-term trend.” https://t.co/QQNHMgPEok pic.twitter.com/hOxomuS5ro

— CNBC (@CNBC) March 25, 2020

Whether or not going to snap back depends on the course of the virus, and whether we can keep the economy healthy or at least functioning throughout this shutdown period, says @BenBernanke pic.twitter.com/qjzfTlu6dy

— Squawk Box (@SquawkCNBC) March 25, 2020

In other news, Ackman sold his ‘hedges’ that he said he DID NOT HAVE that amounted to $2b and deployed it long into Hilton, Starbucks, and other stocks. When he went on teevee last week to scare the shit out of people, and suggest Hilton and everything else would go to zero without a total lockdown of the country, he was pretty clear about being long. But apparently, NOT TRUE, and he took the $2b he made SHORT now to buy MOAR longs.

Futures recovered sharply after hearing Bernanke, from -100 NASDAQS to positive.

I know you passed your series 7 and you manage money for successful people. But you’re an idiot, truly and wholly. Instead of spit-balling from your FEEEEEEEEELINGS, let’s listen to an actual Phd in economics — Dr. Roubini — NYU

In short, we’re fucked. But watch. What do you have to lose? Hang on, I know what you’re going to say: “FUCK THAT GUY HE’S BEEN WRONG FOR A DECADE.”

WRONG and we’ve been rigging like a motherfucker for a decade. This is when you listen to guys like Nouriel because he’s smart and see the risks. Whether we are able to paper over those risks is another story. But he is excellent at telling you what the problems are that need to be addressed.

“THE ECONOMY IS GOING TO CONTINUE TO SURPRISE TO THE DOWNSIDE.”
Part 1

Part 2

It’s one of those annoying narratives that Wall Street loves to barrel into, the everlasting ‘retesting of the lows’. While stocks are higher today with verve, let’s not forget we are DEPENDING on Congress to pass the stimulus bill and we’re also still locked the fuck down.

Now there are a slew of analysts out today telling us to buy NVDA and banks and how the lockdown will soon end. But I’m not so sure about that, based on the evidence. As such, I bought and sold FAS today, for a +5.4% rip, sold out of my overnight SOXL for +25% and will hold onto all of my gold positions, and more — because of reports that there is a shortage of physical gold in the market place now due to closure of mines.

Today’s spike is representative of the largest spike since 2008. The V-TARDS are out in FULL FORCE, claiming to have inside knowledge on how COVID-19 works and how everyone is going to be rich again and how nothing can stop markets from steaming back to record highs.

Want to make a bet?

The CMBS market is in tatters. Everything is being held together by the Fed’s printing press. The govt is now the caretaker for 350m Americans and industry is stalled at -90% by mandate. This is hardly the time to feel your oats.

STEEL YOURSELVES lads, for the fires burn bright in the not so distant future. Be ready for them making themselves know by charring the Vtards first.

This is not the tape to fade, at least not yet. We’ve got a wall of worry 1,000 ft high that needs to be climbed. The trolls from deep underneath the bowels of the earth and rampaging thorough-out the countryside, eating all of the strawberries and drinking all of the cream. Those evil men, orcs, will be dispatched soon.

My position is to trade gingerly, but not in an effeminate manner. I have balls the size of cannon grape, but I don’t feel particularly brave now, so I will trade small in size, but BIG in concept. I am very long gold — because the recent declines in the miners have been wildly overdone. Also, I like some piece of shit stocks that have ample levels of cash, one of which was bought inside Exodus today.

The orcs will tell you to sell short now. I think they’re wrong. Eventually, they will be right, as the demand for “retesting the lows” grows. For now, markets want higher. I stand by my opinion that your long term portfolios should be in cash in favor of a more direct approach. to investing — trading the ranges.

Enjoy the fervor for the fires still burn in the distance.

Big rally based on stimulus bill and maybe some hope that we won’t be holed up for months. Before jumping to conclusions, let’s just agree that an oversold bounce was in order.

I was long SOXL and I sold it this morning for +25%.

My other positions are gold and I’m keeping them because the Fed is literally giving away money. European markets are all up 7%; but gold is the standout — higher by 5%.

I might visit the short side, or not. One thing is for sure, I’m not trading now with markets +1,000 and it’s only 10am. Let it settle in for a bit and then I’ll take a trade or two.

The Fed intervention in investment grade paper today caused everyone to jump into LQD and out of HYG and other ‘covenant lite’ bonds like LEVERAGED LOANS.

LOOK AT THIS SHIT.

Massive downside moves in banks — BAC off by 8%. The reason being is because those assholes own all of the debt — the leveraged loan debt and the oil and gas debt and all of the CMBS debt that fueled our wonderful economy for the past decade. This is a worst case scenario for banks.

HOWEVER, I am reticent to be short here — as we can see govt working OVERTIME to jimmy rig stocks higher. This will not save us — but the whips are vicious and if you get caught the wrong way — you’ll be fucked.

Today’s closed trades.

FAZ +10.5%
FAZ +8.2%
TNXP -15%
(ODP -11.5%)
SOXL +11.2%
SOXL +6.1%
FAZ +1.6%

I had a 2x position in FAZ over the weekend, booked it and went long SOXL at 2x because of an average down. I ended up on that too and finally swung around with FAZ and closed it out for a small gain. I was afraid to be short overnight.

I think we bounce, not because it makes sense — but because it’s rigged.

I’m also heavily long some gold miners, liking today 5% lift in gold and -582 on the Dow. This is a perfect time for gold bugs to shine.

I give up trying to predict the market. The Fed is throwing everything at markets now and there is a global coordinated effort to CRUSH the status quo and toss economies at scale into the sewers. The net result is people are spending more time at home with their families. God willing you have some money squirrel away, otherwise this is a very arduous and stomach churning process. To those people I am deeply empathetic.

For us traders, this is literally a best case environ for markets. This morning I ripped out a +10% trade on FAZ, reversed it and went 2x long SOXL and just sold that for 10%. I own a little gold and also this LOGM, which hasn’t run alongside ZM — for reasons that escape me.

Markets were down almost a thousand earlier and I was -10% on SOXL, very close to selling. The reason why I held is because Tepper came on teevee and starting to calm fuckers down and then I figured we might get a post European close bump, which is typical these days. I was right, so I booked it. Although markets look good, no one knows really — so why guess?

Banks are still fucked and down sharply and the news flow is ruinous. I hope you’ve been able to carve out some gains in this tape. If not, and this goes without saying, come join us in Exodus for some fish.

In other news, founder of Barstools sports is literally gambling away $3m of his own money in stocks, now that sports is banned. It’s hilarious to see how smart people can be so stupid when it comes to money.

His “portfolio”, trading a $3m account with DELAYED quotes.

His livestream.

Last night Fed’s Kashkari said the Fed had “unlimited” money in order to fix the financial system. This morning the Fed announced they will buy corporate bonds geared towards Main Street, including the purchase of corporate bond ETFs. This means, like Japan, the Fed will be buying LQD — like morons, in a flaccid attempt to boost markets.

Can you blame them? This is all we have left.

Among the initiatives is a commitment to continue its asset purchasing program “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”

That represents a potentially new chapter in the Fed’s “money printing” as it commits to keep expanding its balance sheet as necessary, rather than a commitment to a set amount.

The Fed also will be moving for the first time into corporate bonds, purchasing the investment-grade securities in primary and secondary markets and through exchange-traded funds. The move comes in a space that has seen considerable turmoil since the crisis has intensified and market liquidity has been sapped.

Other initiatives include an unspecified lending program for Main Street businesses and the Term Asset-Backed Loan Facility implemented during the financial crisis. There will be a program worth $300 billion “supporting the flow of credit” to employers consumers and businesses and two facilities set up to provide credit to large employers.

Futures went from ‘limit down’ to +500 to now milquetoast flat and sinking fast. How to analyze this? The Fed is throwing everything but the kitchen sink at the bond market now. The very last step would be the outright purchase of stocks, which is illegal — but who’s gonna stop them? Trump?

Bullish or bearish — gun to the head. UNSURE. Let’s see how the market trades.

NOTE: I had a double sized FAZ position heading into today. I sold it for +10%. I am presently 90% cash.

If you think you’re immune to the pangs of this coming storm, you’re being delusional. Call your advisors, log into your accounts, and sell. If you don’t sell — you’re going to deeply regret it.

Fed’s Bullard is out talking shit today.

UNEMPLOYMENT FOR Q2 -30%
GDP -50% (extra Thanos)

Whether you believe this is an overreaction or not is not relevant. It’s happening, just like wars happened in the past and other shit that humans fucked up. Your disbelief and insistence that this is nothing more than the flu, bro, has led you down a ruinous path to perdition and you will only compound your personal suffering by acting obstinately.

DO NOT BUY DIPS. DO NOT BELIEVE IN MUSTARD SEEDS.

Trade dips, both long and short. You can get long for short periods of time to trade ranges — nothing wrong with that. But the buy and hold mantra is dead. Before it’s all said and done, peak to trough, markets will be down 75%.

Lots of shit to go through, headlines that leaked out sneakily last night.

MNUCHIN COURTS GOLDMAN TO OVERSEE $200B BAILOUT.

Mnuchin was a partner at Goldman, just like Dad. Now he’s tapping them for the bailout. While Goldman is more than capable, it doesn’t seem right.

WHITE HOUSE ECONOMIC ADVISER KUDLOW SAYS SENATE PACKAGE BEING NEGOTIATED WOULD BE WORTH MORE THAN $2 TRILLION

Everyone is getting bailed out, from airlines to restaurants, even Fintech firms want govt tit.

Before Fed Acted, Leverage Burned Hedge Funds in Treasury Market

Basis traders were borrowing as much as 50 times their wagers

ExodusPoint, LMR Partners among the losers in popular trade

The firms use borrowed money from the repurchase market for the popular basis trade, which exploits price differences between cash Treasuries and futures. Leveraged funds’ exposure to the basis strategy could be as much as $650 billion, JPMorgan Chase & Co. strategists said.

ZH out with a big story, highlighting a highly 50x leveraged trade that was done in recent years that could be the cause of the Fed intervention. Hint: another bailout.

The Federal Reserve is already about halfway done in a single week with at least $700 billion of bond purchases to provide emergency liquidity to financial markets, delivering a clear sign that it could blow past that marker.

That was fast. More BRRRRRRRRRRRrrrr.

Goldman Sachs economists forecast a historically sharp and swift recession, with second-quarter GDP sinking a stunning 24% after a 6% decline in the first quarter.

-24% seems rather conservative. On the other side of this, Goldman is projecting +12% for Q3.

DJ SOLOMON FROM $GS GETS 20% RAISE IN SALARY TO $27.5m

DJ Sol earned the big bucks in 2019. Should we now take away his earnings in 2020?

Three things I am interested in the week to come.

1. What happens to high yield debt, now that WTI is below $20?
2. What happens to leveraged loans, now that the c0mplex is blown out? Most of these loans are bullshit CLOs that are ‘covenant light.’
3. Does the rate of change of infected people in America and Europe dissipate or hockey stick?

That’s all that matters now. I strongly advise you to ignore the advice from your fee based financial advisors and go to cash. You go to cash, not because you think stocks are expensive and go lower — but because you’re unsure what the future holds. You cannot invest on a model that shows -24% GDP with the entire globe on shut down. There is perma-bull and then delusional. You can always buy back later, EVEN AT HIGHER PRICES — god forbid.