There Won’t Be Any Respite

I was always an ardent supporter of the precious metal trade. It made sense, especially when central banks across the globe printed money with reckless abandon. However, let’s be clear about a few things.

1. There isn’t any inflation, only asset reflation.

2. Central banks are able to control the price of gold and have demonstrated such prowess for hundreds of years.

Thirdly, the bastard Tea Party lost the election and are now getting the business from the demented lunatics on the leftside of wacky. All that aside, even if gold went straight up, how safe are those mines in Africa? Are you telling me they won’t be nationalized?

Here’s what I know to be true: a dog is a dog. I am going to show you two sets of stocks, one set is priced for perfection, the other hardly priced at all.

All of the above stocks are rip roaring winners. Some of you want to short them. That’s a god damned mistake. The market is at new highs and we’re going higher. Why try to time tops by shorting the very best Wall Street has to offer? Sure, some of those stocks might drop a lot after an earnings miss. Call me crazy, I’d rather beat down the guy in the wheeled chair and toss him into frenzied oncoming traffic, than take on John Rambo in the jungle with nothing more than an army swiss knife.

Here is the second set of stocks.

Now that’s a group of wheeled chairs seniors waiting for the light to turn green at the corner of 42nd street and Lexington.

These stocks suck. No one cares about them and analysts don’t even bother talking about them anymore. Who is BIDU? I thought China banned the internet. Good luck with a stupid Chinese search engine.

But let’s not ignore the dominant theme of that list; it’s gold–stupid.

Both gold and silver surged today, much to the delight of dreadfully underwater fanatics. These people aren’t investors or traders, but psychopathic ideologues.

The rally in precious metals will be sold and the beat downs will continue until you are dead.

Fair warning.

The 2017 bonds closed at 86.6 x 90.81–sporting a yield to worst of 12.23%. There are only sellers in the bonds. The only ones that are firm are the 2015’s. But even those are being offered 4 points under par. Considering they are only two years out and $200 million deep, I find it interesting that they are being bid for at $93.

Why am I harping on JCP?

Well, this is one of those moments in market history that you are going to remember, the absolute and total destruction of a big box retailer–spearheaded by just one man–who arrived with a legacy and will leave in shame.

As the stock price drops, pressure will mount to raise capital. They aren’t going to sell more bonds, so it has to be stock. Just like the banks, circa 2008, prepare for a massively dilutive secondary, as management tries to shore up the balance sheet.

Until then, I will remain short. Even more, I will add to my short position on any spike.

I closed the day out down 0.15%, led by a lift in AG (I am short) and small declines in USG, WNC and BX. BZH curbed my losses.

Loser stocks are getting their time in the sun today, moving higher as everything else trades flat. Top sectors include: silver, coal, gold, aluminum, solar and minerals.

The very worst stocks are today’s flavour, a temporary phenomenon no doubt.

JRCC, ANR, PBR, VGZ, MUX, EXM, PAY, AMBA, PVG etc.

It’s like someone took the most down list and bought them all, as a sick joke of sorts and it panned out. Always keep your perversions discreet and never act upon base instincts.

None of these stocks are buys. Both CLF and AKS have horrific balance sheets. Did anything change from yesterday?

Yes and no.

The equity valuation is up sharply, but the underlying business is still impaired.

I am a seller, twice over, on these lifts. I will add to my AG short if it goes up another point. These garbage stock runs can last awhile, some even more than a week. But they fade, like all of the other garbage stock runs in the past.

Speaking of which, JCP can’t catch a bid. The lower the stock goes, the greater the pressure is for management to raise capital. Once the equity is eroded, there will be a panic to raise cash. They need to file a secondary offering right away. Get it over with, so that the company can exist for more than a year.

Any financing will be extremely dilutive to current shareholders. However, it will most likely save the company from bankruptcy, which is the current path–no doubt.

I added to my HLF position.

JCP debt starts to get scary in 2017, with $285 million due and no way to pay it, according to recent trends. Based on the current burn rate, ALL of JCPs cash will be gone in 2013, which will force them to tap their credit facility. The market will be sure to freak out if that happens. As you can see, the holders of JCP debt are already hitting the exits, with the 2017’s now @11.39%, yield to worst.

As for JCP CDS, they are now above 1,000.

As for the stock: I expect funds like Glenview Capital to liquidate their positions, since they were most likely copy catting Pershing Square anyway and retail doesn’t seem to be central to their funds theme.

The restructuring isn’t working and Ron Johnson needs to go. The best thing the board can do now is to fire Johnson, get a lift in the stock, and issue a massively dilutive secondary to help finance this train wreck through 2015.

I bet your idiot black boxes can’t do this.

That’s the oversold signal results for the past 12 months. And this is when it was flagged last.

Any questions?

The difference between the guy making a little and the one making a lot is an edge– the small advantage that puts him over the top. That’s all I endeavor to deliver and I believe we’ve done that, exceedingly well since 2009–with The PPT.

We haven’t gone down more than 2% in the month of March since the great debacle of 2001. Ask yourself, aside from sequestration, does this market feel like 2001? Back then, the country was about to go to war, the dot com implosion was full throttle to the downside and life as we knew it sucked testicles.

I have $1,000 bottles of wine being opened to make sauces.

There is nothing, whatsoever, in this tape that spells danger.

Short the trend setters, the runaway locomotives, at your own peril.

Gentlemen like me only short the very worst of stocks, not the ones favored by the stock Gods. JCP is going to single digits and the CEOs of silver mining companies will toss themselves out of helicopters, reminiscent of a time when law and order ruled the psyche of man.

Down with the corrupt, perverts, who short upstanding ‘job creators’–worthy peddlers of healthy and nutritious vitamins. HLF is going higher–small man.

Housing is where it’s at. If you blink for too long, you’re gonna miss it. Both BZH and USG are steals.

I closed the day at new year to date highs, but still off by 15% from the all-time variety. When I get there, you will know–because I’m gonna run your face over with my space rocket.

I added to my HLF position.

I am +2.5% today, pushing my year to date returns to 16%. I am fueled by the losses at Pershing Square, short JCP, long BX, WNC, USG, PAMT and a big push by BZH.

My cash has been zero for weeks, as I am leveraged at 110% long, only offset by my shorts in CCL, AG and JCP.

The Fly’s swagger is back with extreme force and certitude. I am urinating on graves, drinking bottles of malted liquor, spitting fire into the sky like a dragon.

I sold out of APO, booking a 10% gain, and bulked up on BZH to reduce my basis down to $16. I have buying power set aside, from the APO sales, to initiate another short position. However, I am not going to throw it on today. I have a little more work to do on the name and rather take some time to figure out my entry point tonight.

Drink heavily plebs and gentleman alike of iBankCoin. The market’s are at new highs and the shorts are dead, save the distinguished gents who are short Tea Party investments, broken toilet boats and low end retailers trying to up-end its caste.

May the bones of the dead bears fuel the engines of the market for another 2,000 points before we are gluttonously content.

NOTE: I sold out of VHC today, raising buying power for future shorts.

All sellers in the bond market today. What’s particularly notable is the amount of sellers in the long dated 2097 bonds, which are already trading 25+ points under par. Apparently, some “smart money” doesn’t think JCP will make it until 2097.

Here are the order books for a variety of JCP bonds.

2097

2036

2018

2017

Any buyers out there? Anyone?

Disclosure: I am short JCP