CIAO!

Should my plane blow up en route to Europe, just know that I never liked any of you and feel happy to have hated you all of these years. I’ve spent a good portion of my entire life fending off animals in these halls, blocking and banning — always fighting with malcontents — who thankfully have mostly gone away since Twitter took over and Stocklabs Pelican Room dominates the discussion.

Nevertheless, I remain obstinate in the belief that I am the very best trader in the world and will continue to believe that until my last dying breath.

On that notion, I am DOWN 50BPS in what could be my last trading session — thanks to quantitative chicanery and a market filled with tricks and follies. Everyone piled in this morning after the CPI data and were soon dispatched with losses — because we already know all of that shit. The only thing that matters, dare I say, is whether or not THE CHARLES SCHWAB CORPORATION is bankrupted or not. I have a liberal piece of shit customer inside Stocklabs who used to be a bank analyst and thinks I am crazy for even suggesting it. In between his UNICEF and DNC galas, this person has concluded there is no banking crisis and it’s all made up by right wing nut jobs attempting to dissuade the American people from supporting LGBTQI and Ukrainian rights in Kiev.

I can only hope and pray to my God that he is wrong and his Satanic belief in banks dispatched seaward. I remain steadfast in my belief that, for example, it’s all a scam. This paranoia helps fuel my cogent investment stratagems of 150% leveraged and hedged net SHORT because fuck you — that’s why.

I have another friend who I named “The Devil” because he looks like what I imagine the devil would look like. He’s also very bullish and attends NATO gatherings whenever they throw soirees in NYC. He’s a big believer in virtually anything the government does and says — and has received in excess of 5 BOOSTER shots to date — because why the fuck not? If it’s good for Pfizer it’s good for him. After all, trusting the science and men like Dr. Fauci is what life is all about. At any rate, he’s bullish, like I said, but deep down — not so much. He only pretends because of the fun nature when pretending and his LONG ONLY hedge fund demands it.

Lastly, I have a Polish customer inside Stocklabs who is very much like me — but with a little more hair and less grit. He likes to CAVORT around Chicago in stretched limousines and listen to gangster rap music — whilst perusing looters in his neighborhood shop. He’s also very bearish, like me, and has a very good knack for trading ranges. If I should perish during my trip, I’d strongly suggest heeding his trading advice and dietary recommendations. However, I do suggest you strongly ignore his opinions on cigars, wine, art, and anything of cultural value — as he was born and raised in a country that feeds its people cold cabbage for breakfast and doesn’t really have worthwhile contributions to consider it to be a first rate power.

Ciao and good day!

Fly

I’ll probably squeeze in another blog before departing tomorrow evening. I am fairly certain my trip will include some sort of global financial meltdown — because my narcissism demands it.

I had a fine day, +75bps in precision trading — taking a little here and a little there. I closed with a 15% hedge via TZA against a 100% long book but a book filled with low beta stocks — barely anything I’d consider high risk.

Since it’s earnings season, make sure to keep track of the earnings calendar in order to avoid unintentional rapes. You’d be surprised how horribly some misses can treat a stock. Remember to keep those position sizes down to around 5% and stops tight and the #1 rule above all others is to never blow up. We all trade like shit at times and some tapes are just too difficult to navigate — making it important to get small and real humble when you begin to struggle. Me being the seasoned veteran and all prefer to trade aggressively when slumping. But understand something, I am an elite status trader, with over 40,000 hours of experience doing this shit. You’d beclown yourself attempting to behave as I do in markets as difficult as this one.

That being said, eventually everything goes up. When I say “everything”, I am specifically referring to very big companies with market caps of $50b and up. If you believe your micro cap stock is the next Amazon, you’re an idiot. If you believe your $1b market cap stock will 10x, you’re an idiot.

If you really really want the secret to accumulating wealth, look no further than compounded returns over 30 years and know that your task isn’t to make 1,000% per annum, but instead adding to your accounts every month and earning a return greater than 20% per annum for the next 3 decades. If you can do that, I promise you your rotten spoiled brat kids will be very pleased about their inheritance once you drop dead.

Today is a fine day for the Pacwest Bancorp, higher by more than 7% for the session. But what exactly do the price declines of recent portend? Is it, dare I say, a forbidding a near term doom or perhaps an adjustment of book value based on the new realities of the business?

I can say with certainty that it is RARE to see banks re-price and just prod on as if nothing ever happened. Bond holders will at some point DEMAND a merger.

So what banks are in danger right now? This is an easy thing to assess, even an idiot, such as yourself, can make this determination by simply looking at price to book ratios. In layman’s terms, the PB is what analysts use to study banks — not price to sales or price to earnings as you would say Apple.

Here are the banks that I’ve found lacking in the P/B department, courtesy of Stocklabs.

NOTE: ANYTHING LESS THAN 1 IS CONSIDERED CHEAP. LESS THAN 0.5 IS IMPAIRED, AND LESS THAN 0.25 IS PRICING IN COLLAPSE.

stock/pb
PACW 0.19
FFWM 0.22
FRBK 0.26
CUBI 0.39
EGBN 0.48
BKU 0.52
WAL 0.56
ALLY 0.57
TFC 0.61
KEY 0.64
FHN 0.64
COLB 0.69
ZION 0.7
EBC 0.76
LNC 0.79
CMA 0.81

What does it all mean? Nothing, really — other than the fact that Wall Street thinks the above banks are shit. It’s your call now to determine whether there is value now or this is a precursor to something much bigger.

I shall not jump on thee banded wagon and regale the “heroes” who venture out into the market wilderness for profit. Those rapscallions are being lured into an indelible trap, from which they may not escape. I had immense hedges at the open but covered them promptly and just a short while ago I initiated them again — against the backdrop of a 100% long only book. You have to understand, I am fighting my inner demons here to go full Mumm’rah and 100% short the market until it breaks in half.

Nevertheless, I am pleasantly +80bps in otherwise sanguine trading.

I do believe we are hours, if not days, away from a full frontal attack by the bears on any number of financial institutions. If you haven’t gazed out into the battlefield recently, it is strewn with bank investors and executives of “cool” banks. Soon, the bears will be on the initiative again — forcing more defensive actions by the Fed.

Who is on offense here and who is playing D?

Small caps are still under pressure and I intend to bulk up on my TZA position into the close. I depart tomorrow evening and may trade a little tomorrow — due to my being a degenerate stock market addict.

I heard you like banks? How do you like this chart, the KRE regional bank ETF.

It’s only a matter of time now because SCHW loses another $100b in deposits thanks to cash sorting.

What does this market landscape look like now?

Well, we have Chinese penny stocks barreling higher by 1000% inside a few short hours, heavily short one day bankrupt companies shooting higher based off a sugar rush, and BIG TECH surging ahead thanks to monopolistic practices. The real market is the IWM and the IWM is down nearly 12% over the past 3 months. We have a real tangible danger ahead of us in regards to the regional banks — because the loss of equity causes insolvency.

BANKS IN TROUBLE:
PACW, FFWM, FHN, WAL, ZION, BKU, CMA, BOH, KEY, SCHW, EBC, CUBI.

Like 2008, this burgeoning crisis is very transparent, slow moving, and predictable. Enjoy the semblance of normalcy now for by the time Autumn comes ’round, you’ll be lit aflame and burning to a cinder begging for it to end.

CVNA is up another 22% — at the same time various regionals knife lower. The IWM is once again red, at the same time piece of shit stocks like FUBO gap up. Breadth is marooned at 44% and ZS came out with an upside pre-announcment lending strength to the entire SAA sector.

Out of nowhere, coal and natty are up — but sadly biotech is marked lower.

If you’re haven difficulty trading this tape — it is because you’re a normal person and not a lizard. Only lizards can understand this tape with all of its grant eccentricities.

My Quant is powered by lizards, so up 68bps. But my trading account is -56bps, based upon the whims of man.

Do not give into the apathy, taking off the summer like losers. Keep at it — sweating profusely at the monitor whilst your friends summer at Newport on yachts — popping champagne corks into each other’s faces.

Eventually, all of the hard work pays off and then you’re dead and your money sent to your kids who spend it on clothes, trips, and ill advised luxuries until they’re broke.

Nearly every single time I go on vacation markets careen lower, causing me to panic and forced to divert attention away from all of the beauty and splendors of exotic attractions and food to the evils of stocks. Since I’m going away for 15 days starting Wednesday, it’s fair to assume something very terrible will happen when I’m there.

I know what you’re thinking: “this narcissistic piece of shit thinks the simulation revolves around him.” This is precisely true, actually. You’re all side characters in this AI program, digging holes, playing the fool on Twitter, etc. I fully expect a global financial meltdown to occur within a fortnight.

Early going, SAAS and select commodities look ok. When SAAS is stromg the market usually does well. However, I think the market looks very terrible and will be happy to short it soon.

Stop emailing me, at once. I will never feel sorry for your sloth, the inability to email me in time to gain access to the world’s best stock market data platform and Gentleman’s trading room. I’ve been tasked, due to various degrees of inefficiencies which are entirely my fault, to create each trial with my bare hands. I am tired of offering gratuities to grifters and mountebanks — plebs who’ve read me since 2007 — but never even bothered to purchase a poorly made mug from me.

For the next two weeks while I’m away, I intend to annoy Mrs. Fly via trading from my phone. I realize Europe’s timezones are not in sync with US markets — but I will attempt to do something whilst cavorting on one highly overpriced tour after the next. I will do the weekly quant on Monday — but FORGO IT next week — as I am sure my travels will interfere with proper management of my positions. I will, however, take pot shots at the market when possible and blog in the evenings in order to maintain my very lofty royalties paid to me by my son of a bitch advertisers who festoon my website with their complete crap.

I wanted you to watch Mr. Hugh Hendry wax poetic over the current crisis, a viewpoint that I share with him almost identically. Although in recent years he’s debased himself marooned on an island tripping on acid, back during the financial crisis of 2008 — no one had been better.

HUGH HENDRY THINKS US GOVT WILL FREEZE AMERICAN BANK DEPOSITS $XLF
pic.twitter.com/mBzeQljUyX

— The_Real_Fly (@The_Real_Fly) May 5, 2023

The gist of his argument is that the current crisis is Fed managed and there is nothing they can do to stop it — because people will not leave money at banks for 1% and would prefer t-bills at 5%. This is called “cash sorting” and this is why SCHW will trade to zero when this is all said and done.

The unrealized treasury losses on bank balance sheets will need to be realized once capital flies, forcing them to take losses they never needed to take. The only way to stop it — they’ll FORCE you to keep your money at your bank.

If you like your bank, you can keep your bank.

I traded shitty today — yet still managed +245bps. I took a 20% hedge via TZA at the close, in spite of being bullish. I did this because I know, at some point, it’s gonna end and when it does — ALL STOCKS will hit rockbottom and there won’t be anywhere for you to hide. You’ll try to hide underneath a rock or perhaps wedged in between a crevasse — but the market will find you and rip your arms and legs from your torso — kicking you into the pits of hell to repent for a life of waste and greed.

I depart for Europe next week for two weeks. I remind you of this because I will sparsely update the blog for the next 2 weeks or so. You are welcomed to join Stocklabs and talk to my fellow traders in there if bored, or you can fuck off for a fortnight and check in with me towards the end of May.

Everything worked out according to doctrine. Whilst my enemies soiled their pantaloons into the close yesterday, I was emboldened to exit an otherwise harrowing session 152% leveraged long and boosted with upside ETFs out of my fucking mind. Much to my delight, everything worked out and even CARL “FUCK YOU GIVE ME THREE SEATS ON YOUR BOARD” ICAHN is on the move. I doubled my position at the open and just kicked it out for a 6% win.

I stand before you, once again, a victorious man. My library room now plays chamber music and chamber music only. The supple leather and silky rugs help me think amidst the leather-bound books which adorn my surroundings. You attempted to defeat me and now your head is in the guillotine. How does it feel?

+250bps and rising.

NOTE: Today is the final day to get a free trial to Stocklabs. Email me for access: [email protected]