*** COLLAPSE ***

Trading halted, markets thrashed -10%.
Europe -10%
Oil -11%

IT’S OVER.

Well it took the flu to get us back down to zero, in between a little hand wringing by Trump for the past 3 years. All of that really hard work of extricating the US out of deflation and into normalized rates is gone.

In an unprecedented move, the Fed, getting in before Asian trade, slashed rates from 1.00-1.25% to fucking zero. That is 100bps and on top of that — $700b in fantasy cash to buy into treasuries and MBS.

The quantitative easing will take the form of $500 billion of Treasurys and $200 billion of agency-backed mortgage securities. The Fed said the purchases will begin Monday with a $40 billion installment.

The rationale for treasuries and MBS is to provide a counter-party to all of the companies who are now LIQUIDATING in order to shore up capital. The Fed will now serve as a bag holder for all of the people needing to sell. It’s worth noting, this is the last major bullet in the Fed’s chamber and this is being used to buy us time — the markets that is. I suspect this will serve as a sugar rush and people with a modicum of sophistication will know this is a SELL THE NEWS type of release.

Reason being: unlike 2008-2009 where all we needed was to paper over stuff and instill confidence, today you cannot go to Disney if you wanted to — because it’s fucking closed. There is now a social stigma attached to people who do not go outside with a hazmat suit and anyone discussing vacation plans is equal to Hitler.

Since the news in Italy, Spain, and France is only getting worse, with cases and deaths going parabolic day over day, one could only begin to imagine how long Americans will be holed up inside of their homes, corporations ripping thru capital reserves — ebbing quickly towards insolvency.

I will sell the rip or the dip — makes no difference to me.

NOTE: GS is estimating Q2 GDP will come in at -5%.

Do you know when the Coronavirus FEARS will subside? How about — do you know if this novel strain is resistant to warmer climes or not? I haven’t received a definitive answer.

Another question.

Would you invest in a company now with MASSIVE OVERHEAD and burn and zero revenues? That’s just about the entirety of the global markets right now — as companies seize up and shut the fuck down. The optimist in me keeps saying ‘this is going to pass’ and that’s all well and good. I am an excellent trader and reader of tea leaves. Therefore, and this goes without saying, why the fuck am I still holding onto long term positions — like a dummy — simply because of the old “buy and hold” mantra? This stratagem worked WONDERS in 2008 and 1929; I’m sure it’ll do just as fine now.

I’ll put it to you this way, and you’re seeing the panic now outside, if this lasts 3 months every company in the S&P 500 will have a liquidity issue and revenue down 50% or more, with marked exception to consumer staples. Companies like CHD, CLX, GIS and grocery stores might do well during the fires.

But what if the supply chain of food gets disrupted by COUNTER PARTY RISK? Don’t know what that is? Well, at the depths of the 2009 crisis there was a palpable fear that things would not get shipped — because the person paying for goods wasn’t to be trusted — since banks were on edge and just about everyone was barreling towards bankruptcy. People wanted to get paid immediately — NO RECEIVABLES.

I can only see one way out of this — BANK HOLIDAY and EXCHANGE CLOSURE, unless of course this subsides by miracle.

Therefore, come Monday I am switching to 100% tactical allocation and liquidating my Quant and retirement accounts.

To stay on top of the news, we released the StockLabs newswire to the public. We will be upgrading it to include new features soon.

I made a sundry of trades in and out of 3x ETFs today, all profitable, all done with the utmost precision. Here was my haul.

SOXL +11.7% (overnight)
SOXS +14.1% (swing)
FAS +11.6% (swung again)
SOXS +3.1% (and again)

While tempted to trade some more, I chose to remain SHORT VIX and also long tankers and lots of cash. I hope you made it thru the fires this week. I can tell you now, and this goes without saying, I am in the zone like never before. Full matrix — space alien magician (SAM) style and good bye.

The market did exactly what I wanted it to do, so I ended up banking +14% in SOXS. In my previous blog, the Dow was +650 and went to breakeven inside of an hour. INDEUD.

This is what I do. I feed people fish. Although I am tempted to book profits on my longs now — I do believe we can hold these gains. Moreover, I also believe there is a pending COLLAPSE in put premiums — as all of you reactionary retards get HOT ROLLED AND STEELED into the teeth of RECORD STIMULUS and CENTRAL BANK RIGGING.

This is the time when men are born. Banks look best, since any government bailout will help them most — by excusing them from massive LOC tappings.

This will not last

All trades happening in RT, Exodus.

CIAO.

Europe was up 8%, now only 3%. There is a little less than an hour left to trade there and I suspect markets will fade. We are seeing MASSIVE selling in areas of the economy most affected by the economic collapse caused by coronavirus. Cruise ships, casual dining, entertainment cannot catch a bid. I do think, however, casual dining is a solid long term buy down here. Stocks like DIN and CMG off their highs like this is just madness.

I had SOXL overnight and sold it for an 11.7% profit. I am 80% cash and only long tankers now, who are enjoying $300k day rates for shipping crude. In the space, I own DHT, FRO, and EURN.

I am concerned about the fade in oil and the way treasuries are trading — whip sawing around too much. I do not trust Congress to pass a fiscal stimulus bill this weekend and will not be holding anything risky over the weekend.

Empirically, VIX above $70 is a SHORT. However, the fact that it won’t go down suggest people are still buying puts. Also, we are seeing sharp declines in short dated treasury yields, a typical safe haven for money managers.

I like the market to fade here until 12pm, ramp until 3pm and then taper off again. We might resume the plunge on Monday.

BUYERS BEWARE.

This could be the biggest news out of Germany since 2008.

Germany says it'll spend billions to cushion the economy and will put no limit on its credit program to help companies. The market response is notable, with the fastest steepening of the German 2-10-year yield curve since 2008. pic.twitter.com/s3vt44VwHq

— Lisa Abramowicz (@lisaabramowicz1) March 13, 2020

The result is massive widening of 2s and 10s in Germany (bullish), the most since 2008. Italian markets are up a staggering 14.4% and Europe as a whole higher by more than 7%. We are LIMIT UP (5%) here in America and our bonds yields are BLOWING OUT, with the 10yr up an amazing 12bps to 0.97%. I do not view that very constructively. But nevertheless, I’ll take the rally.

Bitcoin got ass-raped last night down to $4,000, now trading at $5400.

I know what you’re thinking. Should I buy now? Will this continue?

HARD TO SAY. But I am comfy taking trades at any time, in either direction. Heading into today, I am heavily long tankers and some SOXL, no shorts. I think we have room to move. I am a little apprehensive over the weekend because Congress is supposed to approve a stimulus programme. Do you trust them? Do you hate them enough to sell short into the close today?

We’ll find out now, won’t we?

FTSE MID is higher by 10%. US futures are pointing towards a grandiose open of 4%. Oil is higher by 5%.

The mustard seeds are already taking root and a great bit beautifully titted market is about to take hold. Yes, it’s trie, I purchased SOXL yesterday. Yes, it’s true, SOXL was down 13 from my basis in after hours trade, but now it’s +13 and my boldness has resulted in yet another victory in the great bear market raid of 2020.

Can I teach you how to trade?

NO.

You can never learn to trade. I am merely a purveyor of fish. I can feed you said fish and that is all.

The perfect scheme was concocted to annihilate the global economic order and upend it vis a vis bat soup. But we all know this virus was made in a lab, right? This weaponized version of SARS is wreaking havoc on the minds of people, ginned up and spun out of control. It’s out of the box, and central banks have no powder left in the keg, and OPEC concluded it’s better to crash oil now than later. This has all of the trimmings and the hallmarks of a hard reset.

Asian markets are off by 10%, absolute carnage out there.

Dow futures are down more than 650 and it’s starting to look like we’ll be LIMIT DOWN by the open. How does this get resolved? Well, it starts with everyone raising cash by selling treasuries, which is why the Fed stepped in today with $500b. Funny thing, yields still spiked. How much cash is parked in treasuries, globally? They’re all running for the exits because liquidity is nil. This is now a credit crisis, massive blow out in spreads. Mortgage yields are HIGHER because of the stress. California munis down 13% today. Fucking unreal stuff, which is why they need to SHUT IT DOWN.

To be honest, a bank holiday and exchange holiday might be exactly what the Doctor ordered. Set up a massive government LTRO and lend money to everyone — FREE CASH FOR ALL. Moral hazard? Well, that or you’ll be talking about how airplanes used to fly in the sky when that company Boeing used to exist. A Mad Max environ will descend upon you — electricity being turned the fuck off — cars no longer being made or sold — barely driven. Technology will be forgotten and man will once again hunt for his food.

You’ll walk thru Disney with your band of cannibals and cast your eyes upon the Magical Kingdom festooned with weeds and overgrown shrubs and tell your little cannibal children that “once upon a time — people used to have fun here.”

They’ll answer back “what’s fun Pa?”

Markets closed at session lows, down more than 2,300 points. Everything was massacred, aside from the tanker stocks I was hiding in. See pal, that’s what I’m all about — hiding inside oil tankers (VLCCs) whilst the world burns. Why hide inside said tankers?

BECAUSE OF THIS!

There are two types of people in this world, those who hide inside oil tankers and those who don’t. While all of this nonsense is occurring inside of the oil space, House of Saud is securing all of the VLCCs money can buy. The day rates for such vessels now fetch for $265k per day, up from $18k on Friday.

I own DHT and FRO, which paid out a 40 cent dividend today and was up. My other trades were an overnighter on FAZ +34% and then another 7.5% later on for good measure. All in all, 75-80% cash at all times during this debacle, an extreme gentleman of utmost candor and ferocity. You cannot supplant me, and never overtake me. Le Fly is everlasting and supreme.

Do you want to see what the carnage was like on this day (I am now speaking to readers of a future generation)? Here goes.

It’s over. Massive bailouts are needed to fend off the burn. The burn will either be absorbed by government or markets will close. Because of the severity of this situation, as evidenced by today’s bloodshed, I went long a little into the bell.

All trades and real time thoughts will be shared, as always, inside of the hallowed halls of Exodus.

BTW: My chief concern now is functionality of the treasury markets. Yields should be sinking, not rising, which means there is something going very wrong in treasuries. My guess, companies with cash and treasuries are in need to liquidity and are actively selling, WORLDWIDE. Treasuries have been a place of safety for decades. Well, we have a global crisis now, so that’s why the Fed is stepping in with QE to absorb the blows they knew were coming.

The most humorous part of today’s massacre was seeing JNUG off by 64%. Gold bugs really thought they were going to make it.