The Bankless Bull Market

Someone get me some data on previous bull markets that not only didn’t include the banks, but also shit on them. WTI is spiking 3% this afternoon and markets are sashaying higher again. All the while, trolls from middle earth are clawing at the walls of Deutsche Bank, Credit Suisse and Barclay’s. The entire European banking system is in disarray, while ours is on permanent vacation. God willing the newly adorned Empress of America will punish them and their $3.50 ATM fees.

Naturally, if the shares of leading banks are down 20-50% for the year, credit is going to be tight. Banks cannot lend money out the door, whilst it’s being burned inside. Maybe it doesn’t matter anymore? Perhaps we’ve transcended the lucidity of balance sheets and have adapted to a world of smoke and mirrors, where share buybacks and central bank rigging is all we need?

DB is at fresh record lows.

Thoughts on the matter, good sirs?

As a megalomaniac, it’s important to control, throttle even, the flow of information and news. On this planet, there are just a handful of places where human beings converge to get information.

There is Facebook, Reddit, The Drudge Report, Google, LinkedIn, and Twitter. Since Matt Drudge merely posts links to articles, that can’t be controlled until someone figures out a way to offer him a heart attack. Conde Nast already owns Reddit. Zuckerberg and the Google or Alphabet nerds are running their news outlets like communist propaganda era arms. MSFT bought LNKD. And @Jack is trying to be Zuckerberg with Twitter, minus all of the cool profits. Plus, people think he just wants to head to Square and live out his life like a full bearded booze hound.

Shares of Twitter are rising on takeover rumors today. Normally I dismiss these rumors, but the climate has never been better for megalomaniacs who’d like to control things. I wouldn’t be surprised to see someone bid for this piece of shit and fold it into a larger, money making, enterprise.

The only question is who?

If the title of this post doesn’t jibe well with reality, it’s because you’ve haven’t transcended your physical frame into the multiverse, where all of the basic laws of physics and math have different rules.

The EIA just reported a build of 1.4m barrels of crude vs the expectations of a draw from between 900k-1.9m. At first, that sent crude lower. Then traders had a look at the gasoline draw of 3.2m and decided ‘good enough.’

“Risks for oil remain skewed to the downside in the second half of 2016,” analysts at Morgan Stanley said in a report. “Supply disruptions and risk appetite were supportive April-June, but fundamental headwinds are growing, which outnumber any recent positives.”

Standard Chartered bank said there was “no fundamental justification for recent oil-price falls” and “the global oil market has rebalanced, and U.S. crude supply and inventories are expected to fall.

On this news, WTI is higher by 1.8%.

This isn’t meant to be a political post. I’ve hung up my anti Hillary tirade a few weeks ago. This is a significant headwind for markets, one that is rarely discussed because no one believes Trump can win.

We have a Presidential candidate, one who is extremely popular amidst the disaffected part of the population, who is calling the market a bubble and slamming Federal Reserve policy.

“I did invest and I got out, and it was actually very good timing,” the Republican presidential nominee said in a phone interview with Fox Business. “But I’ve never been a big investor in the stock market.”

“Interest rates are artificially low,” Trump said. “The only reason the stock market is where it is is because you get free money.”

Trump said the market would “go great” if he were elected.

The fallacy in Trump’s thinking of markets ‘going great’ under his leadership is that fiscal policy takes time to effect change. He is right when he says the only reason why stocks are up is due to monetary policy. We all know the game is wholly rigged. There isn’t a fucking chance in red hell for stocks to trade higher the day following Trump gets elected. He’s a weapon of change, a disruptor of the status quo, one that seeks to remove the applecart from a very greedy and select elite who’ve done well under Obama’s policies.

While Trump’s anti globalist, anti market manipulating capitalistic plans might help the economy in the long term, there will be hiccups along the way. Those of you voting for Trump should know the risks involved, as it pertains to your portfolios, should he get elected.

It was down 6% earlier, but now it’s down a tad under 4%. The Winklevoss twins and the rest of the silicon valley, baby blood sucking elite, prefer to have a stateless digital currency, as opposed to the jingoistic racist shit the U.S. Treasury circulates. As such, the Bitcoin will be provided succor, for as long as the new Ceasars of the economy deems it necessary.

“Yes – it is a large breach,” Fred Ehrsam, co-founder of Coinbase, a cryptocurrency wallet and trading platform, wrote in an e-mail. “Bitfinex is a large exchange, so it is a significant short term event, although Bitcoin has shown its resiliency to these sorts of events in the past.”

Bitfinex confirmed in a message to Bloomberg News on Wednesday that the hackers took 119,756 bitcoin, or about $65 million at current prices. More than $1.5 billion has been wiped out from bitcoin’s market capitalization this week, according to research from CoinDesk.

“We will look at various options to address customer losses later in the investigation,” Bitfinex wrote in a blog post. “We ask for the community’s patience as we unravel the causes and consequences of this breach.”

You fucking morons keep buying this shit, in the hopes of a material explosion at the Treasury, or something that will deter people from trusting the U.S. greenback. While I might not trust the people who print the money, I certainly prefer to have my money backed by aircraft carriers and Navy Seals, rather than some seedy fucked face tech guy who can’t keep his hob-nosed website secure when holding millions of dollars worth of bitcoins for a bedraggled public.

Everything is good. European banks have been detonated and strewn all over the market place, like the guts of an animal festooned at your local butcher’s shoppe. The terror plague continues, unabated. The elections loom. And, lastly, the great big, dumbass, decline in WTI continues.

The wall of worry is in fact large, even larger than the one D. J. Trump intends to build with Mexican tax payers pesos.

Even still, I remain ardently steadfast in my whole hearted belief that I will, one day soon, preside over your bedraggled graves. In the interim, go smoke some marijuana cigarettes and protest the police department, while demanding freedom of expression for persons who practice sharia law.

Out.

Check out the After Hours with Option Addict this week. Free trials for all.

Now that crude traders have been dispatched and crushed into 10,000 pieces, you must be pondering how the oil stocks have faired? After all, the oil companies that belong to these stocks are wholly dependent upon the price of said commodity to fund their operations. Or, am I missing something here? Are they selling dirty magazines to their employees working on site too? Maybe they sell egg salad sandwiches to workers to hedge against these CATASTROPHIC drops in their only product.

Let’s have a look.

WTI -21%

CLR -7.9%

CXO -0.3%

CVE -3.9%

LNG +1.1%

AR -1.9%

XOM -8.6%

CVX -5.6%

TOT -4.8%

NBL -6.5%

COG -8%

MPLX -5%

XEC -3.8%

Of course. It’s all just a big, fucking, joke. It’s one thing for stocks to inversely correlate to oil. I can get my mind around the idea that somehow the overall economy benefits from lower inputs. But for crude stocks to ignore or even trade higher in the midst of WTI carnage is the result of a servile and wholly dysfunctional booze hound culture of corrupt and inept money changers, unwilling or able to see the forest through the dense and smoke laden trees.

The fucking forest is burning down. You just can’t see it with those goggles on.

In light of today’s report that stated spending in June rose by 0.4% and personal income dropped by 0.1%, people are getting real panicky that back to school shopping budgets might not meet expectations. After all, Americans are dipping into their savings. For most Americans, savings is something reserved for leftover food, not actual currency.

As a result, carnage is taking place in Jeffrey Macke’s sandbox, with losses, larger than life, in the following names: M, KSS, DDS, SHOO, BOOT, DECK, SSI, JWN, GPS, BKE,  FRED, BIG, CONN, RH and WSM.

Macy’s, the biggest department-store company, suffered a sales downturn in July, following improving trends in late May and June, Cleveland Research said in a note. The slowdown has forced the retailer to be more aggressive with markdowns, the firm said. Nordstrom, meanwhile, is getting less of a bump from its famous Anniversary sale, according to Detwiler Fenton.

While the National Retail Federation is predicting a rise in back-to-school budgets this year, Commerce Department data from June showed that households are dipping into savings to fuel their spending. That could mean current levels can’t be maintained.

“It’s not sustainable, and items like clothing are among the first things that are going to get cut out of that spending,” said Bridget Weishaar, an analyst at Morningstar Investment Service.

Seasonally speaking, this is the trough period for retailer, heading into September, which is traditionally the absolute worst time to be long mall related names. The problem with retailers, ultimately, is two fold. Not only are they dealing with a miserly consumer; but they’re also trying to fend off the black hole that is Amazon–a company that intends to destroy the very fabric of brick and mortar and replace it with rubble.

Everyone was jerking off to the news that Monte del Paschi was going to receive a $5b bailout yesterday, until they read the details. Pray tell me, fucked face, how does a bank with a market cap of $1b raise $5b in capital? If so, do you think that’s good for shareholders? No one really gives a shit about lowly stock holders. We’ve seen this show before. The bond holders make out like fucking bandits, while everyone else holds a bag of dicks.

So now the entire Italian banking system is being called into question. Banks are getting orangutan’d by heavy losses. Don’t you worry a wink, however, about the sovereigns. Those will be purchased by the ECB, who magically creates new money, out of thin air, for the explicit purposes of reducing borrowing costs for runaway fiscal budgets.

Art is echoing the same shit I’ve been saying for months. Maybe you’ll listen to it now, coming from the olde guard of the iced cub bucket.