EUROPE SUFFERS WORST DROP IN HISTORY; US MARKETS ARE GETTING DESTROYED

Italy was down more than 16%, Spain nearly -15%. The Germans lost 12.2%, making it the worst single day drop ever. Here in the state we have a confluence of events transpiring that’s so severe — it could only end badly.

Let’s go thru the danger signs.

LEVERAGED LOANS via SRLN off by nearly 5%. That’s a standard deviation blowout.
Pancake House, DIN — off by 27%.
Another casual dining giant — EAT, off by 30%.
Spirits Airlines, SAVE -30%
Life insurance giant, LNC -24%
Royal Caribbean, RCL -24%
Macy’s, M -23%
Six Flags Great Adventure, SIX -17%

I can go on. The point I am making here is this. You have a giant pyramid scheme, which is normal of course. Business rely upon foot traffic and people buying stuff. People are not doing that anymore and these companies are GIANT. We don’t have small mom and pop stores anymore. These chains are enormous with wide ranging overhead and employee counts. They cannot handle the downtime, in so quick a fashion.

All of the sports leagues have been canceled. Italy is shut down. This virus scare is so pervasive, so severe, it’s only a matter of time until Disney shuts down.

The resolution cannot be made at the Fed. The government either lends EVERYONE money for free or they will go bust and markets will be forced to close until this passes. If they do not freeze and close the exchanges — EVERYTHING will go to zero.

BA is down 53% the past month.

For young punks who don’t know, once upon a time at the beginning of the 2008 Financial crisis, Cramer went on a “they know nothing” rant — calling for Fed action.

Well, he’s at it again — this time calling for MASSIVE government bailouts and cessation of income tax.

Wut?

Yes indeed.

Either something like this happens or markets will suspend trading until the dust settles, in my opinion.

I sold FAZ for a +34% overnight sojourn. Presently 80% cash, not buying yet, looking for clues.

Good morning ladies and gentlemen,

No more chin-wagging or contemplating how this all works out to your benefit. Stocks are going to get fucking shipwrecked today and there is nothing policy makers can do, aside from SHUTTING IT ALL DOWN and suspending trade. Later on today the ECB will announce “liquidity measures”, but what use can they serve when business is down 80%?

Where do I get such a number?

CHINESE AUTO SALES FELL 79.1% IN FEBRUARY.

Since everything is being shut down, my question to you is this:

How long can companies survive holding overhead and business down 50%+?

HOW FUCKING LONG?

We are talking instant bankruptcies here, across the board. Significant draw downs in lines of credit, totally fucking banks to the point of ruin. The banks, if you will, are on the hook for $2.5 TRILLION in LOCs, most owned by JPM, C, WFC and BAC. It will look like a massive run on banks, all happening so fast, no one will know what hit them.

LOC’s flying out of the door, banks forced to recapitalize.

This is the gloom and doom scenario. Let’s play devil’s advocate and say they manage to instill some confidence in markets. How might that look like? Perhaps a government or Fed lending program of massive scale to take the place of the LOCs? I don’t know. But as of right now the only stocks that are working are mini plague stocks. You remember, the stocks you mocked me for last month.

HAHAHAH — go fuck yourself.

Credit crisis — leveraged to the hilt edition.

Nite Nite.

It’s over again folks. Small cap futures are lower by a fucking outrageous 6%. Dow futures are limit down 1,100 points and the DAX slobs are looking into the hourglass — FUCKED BY 6.5%.

Civil society has officially ended tonight. Trump enacted a harsh new travel ban from Europe; your summer vacays are inexorably canceled, henceforth. We’re completely in the dark sea now without a paddle. The NBA season CANCELLED. Poor Dave Portnoy sold his Barstools pice of shit sports site for PENN stock, and it’s barreling towards ZERO — as American sports are now a thing of the past. Tom Hanks is almost dead, officially diagnosed with CORONAVIRUS. And reports are that John Travolta is in the hospital too, fucked from the Wuhan Batsoup Flu.

Yours truly began prepping tonight, as we swim quickly towards end of days. I fought for the last roll of toilet paper and won, as well as ample supplies of papered towels and other coronavirus curing dry goods. This is it folks, the end.

After hours, Wynn, Hilton and Boeing all tapped their lines of credit — maxing out their credit cards — but it won’t be enough. All of these companies are leveraged to the hilt, puffed up with employees and overhead, and now have ZERO business. Think about it, a true doomsday scenario if I’ve ever seen one.

The singular thing that worries me now are markets shutting down completely in order to preserve the system. We cannot paper over this, so the next logical step for our manipulators in chief is to stick a pin in everything and HALT TRADING until the virus passes.

The Black Flag flies on iBC tonight, somberly. I will accept my wins tomorrow, long FAZ, NNVC and some tankers, but mourn the passing of this once great globalized world.

RIP.

The Dow closed down more than 1,400 points, wiping out yesterday’s rally clean — leaving a little tip to boot. I did a full 180 intra day and went long FAZ, cleaned out my longs, and remained long tankers and one virus stock. The news is fluid and the ramifications are horrible. The advice given on CNBC is worse than during the financial crisis. All day they had shills on, RIAs, talking their book.

There used to be a guy in my comments section bragging about his ETF returns. How they doing now pal? How do you feel getting HOT ROLLED AND FUCKING STEELED into there teeth of a bastard credit crisis?

MBS spreads blew out today. BA plunged 17%, sending CDS to record highs. Everywhere you look speaks to crisis of an unprecedented nature. The NBA will play without crowds.

And here we are — general entertainment sector getting nailed to the wall — cruises, playgrounds, concerts BTFO.

REITs took the biggest ass hammering today, with credit crisis CRE names like SPG and MAC knifing lower.

One of the largest emerging market ETFs got wrecked and continued to decline.

Lots of reasons to fuck off and stop telling people to just dive in there. National disaster declaration is being rumored now in order to free up FEMA coffins and their money. Trump is chimping the fuck out, overseeing the greatest bubble to have ever existed deflating in real time — executing buy the dippers with malevolent alacrity.

IT WAS SO ORDERLY.

Like a man, I looked at my computer screen and acquiesced to the fact that I was wrong. I sold out of my position and went to cash. Also, with a little bit of said cash, bought another tanker and SHORTED THE FUCKING BANKS.

The results

APT +4.5%
(LOPE -7.3%)
(OXY -6.9%)
(FAS -8%)
(YINN -3.8%)
(MAR -8%)
(AYX -2.2%)
(MDB -0.7%)
(XPO -3.2%)
CRM – wash
SE +0.8%
FB +0.34%
NFLX +2%
TSLA +1.4%

NOT FLATTERING, but if I only showed you the ups, you would have no idea of the tumult it takes to get there. I’m going thru a process here of trying to reconcile an insane market. This is very 2008ish and I am beginning to see outsized movements in CDS that suggest SEVERE credit issues are on there horizon. You can plainly see it in HYG and SRLN now.

I do not have a crystal ball and can only offer you words to help you see through this horseshit. But the issues the global economy is facing now is in fact unprecedented. Don’t just sit there and see your portfolio shrink. If we’re heading into recession, prepare for another 20% lower from here. Of course there will be drops and pops, fantastic rallies. But this sort of shit, up 1,000/down 1,000 is enough to drive me nuts. Most of you simply can’t handle the tick tock.

I am off to a late start, so I need to catch up quick and make this post quick.

BOE did an emerge rate cut of 50bps to 0.25% and offered some funding shenanigans. More central bank intervention. It might not look like much now, but it will later.

The Saudis ordered Saudi Armamco to produce a million more barrels per day to 13m. The result, sharply lower crude, off by 4%. Also, you can track VLCC rates and read reports about Saudi securing all of these ships for extreme day rates, now fetching $200,000 per day. They were fetching $20 on Friday. This explosion is a major boon for FRO, STNG and many other tankers.

Dow futures are off 1,000. Whoever bought the close is fucked. If you bought early yesterday, you might want to consider selling today. This sordid action will not conclude right away. I suspect lower prices are coming and I’ll need to re-shuffle things to prepare for this reality.

I have no fucking idea why futures are lower tonight. The LSTA leveraged loan index was higher, oil is up 3% now, and Asian markets are garden variety down by 1.7%. Dow futures are lower by more than 600, absconding with more than HALF of today’s gains, extra Thanos.

Incidentally, I am 80% in on the long side, no virus stocks, loaded up with two 3x leveraged instruments. In other words, I may be HOOKED.

I do have a little leeway, since my basis on those positions are significantly lower, taken on today when markets were only +100. It’s the fucking nature of the market to always rape and pillage. It’s always like this during routs, dark clouds of uncertainty rip thru confidence and we get these widening trading ranges. In 2008-2009, policy makers LOST. Contrary to popular belief, they lost because markets went down 75% before rebounding. That’s game-set-match. Since then, they’ve learned to head off these bear runs with stimulus and/or central bank intervention. We are now at the point, down 20%, when their actions must work, otherwise we might find ourselves quickly swimming downstream — stacking up losses in the magnitude of 40-50%.