A Thanksgiving Warning

Let the clowns and the asshats pine for the next great depression, so they could make a few euros on their FAZ positions. When you read the frantic, fucktarded manifestos of these lemmings understand they are not leaders, but pathetic, sorry followers, who conform to “group think” because they are weak. It has never been my belief we were in some stock market utopia, where community organizers blazed a path to glory through income redistribution. But I refuse to believe the central banks of the world will sit idle while their respective countries burn to the fucking ground. It. isn’t. going. to. happen.

These scenarios have played out numerous times over the past three years. Each and every time, like clockwork, the most ardent of bears overwhelm the comments section of this glorious blog. I spit on your person. I slap the life out of your face. It always ends with one big grande “I told ya so”, followed by me bowling on your heads with cannon balls.

There is no ambiguity about the situation we find ourselves in. There is no more time for talk and half measures. The deviants in Europe must conclude their civilizations or adhere to the untenable laws of survival. Without total and complete cooperation from all powers in the EU, the stock market and banking system as we know it will be nothing more than a memory. These slow rolling black swan events, purported by governments intentionally, are extraordinarily rare. As a matter of fact, I do not believe this has ever happened.

I take no qualms with those who want no part of this tape and have elected to go to cash. However, I harbor a great deal of disdain, and frankly, deep seated murderous rage towards the fucktards who attempt to “machine gun” me through half hazard declarations of war on this web domain. I will cut your heads off and put your skulls in my backyard to be used as cigar ashtrays.

“The Fly” does not back down from low level punks, who run around with heroin needles in their necks and leave snarky comments on the internets. It is a MISTAKE to fuck with me and I will let my presence be known, over and over again, until your livers are searing on my grill.

Happy Thanksgiving!

Tomorrow is a joyous day for all Americans. Set aside the frustrations and consume 2,000 calories. Drink yourself into a coma.

The stock market should not dominate your psyche. I tell you this from the very depths of stock market hell, where I will never escape. My life revolves around this and I hate to see others get initiated into this horseshit. Save yourself before it’s too late. Consider this pearl of wisdom, from me to you, as an early X-mas (no pagan) present. Mind you, I profit from the membership of The PPT and 12631 services. So this is a completely selfless piece of advice.

Run.

Many Thanksgivings from now you will be sitting fireside with grand-kids on your lap, reminiscing over the great market crash of 2011. You will be thankful for the day you listened to Le Fly when he told you to “run.” Later on in the evening, you will log onto the internet to see if iBankCoin is still around. Much to your surprise, Le Fly will still be there, talking old man shit to all of the younger market players who read his site. He will say things like “back in my day we’d short the shit out of that prick Bill Miller until that cocksucker died.” A much older Fly will be the nastiest thing to have ever walked the face of the Earth.

Life is short and there are things worth cherishing, like loved ones and good rap music. Do not let this German-Franco drama get in the way of a good laugh. Before you know it, you will be dead with all sorts of homosexual flowers around your pineapple coffin.

Happy Thanksgiving.

In spiraling markets like this, there is always the desire to bottom pick, myself included. Without a doubt, there are absurd values out there, that will eventually end up being big money makers for those who had the stones to step up and buy. However, until stocks stop trading lower, they will be subject to forced selling. Forced selling will be done by hedge fund managers liquidating their fund due to end of year redemptions or closure of funds. And, it will be done by retail investors who are heavily leveraged via margin call selling.

This sell off is about two weeks old now, with the S&P down 6 straight days. With the high levels of margin debt out there, without a doubt, this means people will be liquidated as the market falls.

The most vulnerable stocks are ones favored by hedge funds with thin floats. And, stocks that trade less than 500k shares per day are especially prone to melt-downs during margin liquidations. More often than not, brokers ignore calls and the clerks hit bids at 3:00, at the market, not giving a fuck about executions.

If you are buying a stock because you feel the valuations are too attractive to ignore, keep in mind the shares– like Puma Punku– are trading without logic. LOGIC DOES NOT EXIST DURING MARGIN LIQUIDATIONS.

On the other hand, if you start to see stocks trading up in a down tape, after getting flushed, those stocks might be signaling bottoming out action. My favorite dip buys are stocks down more than 20% over the past two weeks, % of float sold short more than 15%, with solid fundies. The shorts will serve as a bid in a bidless tape. Often times owning stocks without big short positions can be more dangerous than heavily shorted stocks in liquidation tapes– due to lack of natural buyers. At least in heavily shorted names, profitable short sellers will close out trades, providing bids.

TLT is trading up. US treasuries are the main beneficiary of this shit fest. This is a fucking unmitigated horseshit of a mess. Stay away.

Before I get into my number one hedge, let’s recap this mornings events. Apparently a German bund auction failed. Germany is saying it was a “technical difficulty.” However, the market is saying “fuck a panzer tank” by punishing german bunds. Here’s a summary of this mornings European bond blow ups.

Belgium +8.6% to 5.51%
Germany +7.5% to 2.06%
Denmark +2.4% to 1.98%
Austria +4.2% to 3.65%
Czech +5.2% to 4.21%
France +4.3% to 3.68%
Italy +2.3% to 6.98%
Spain +1.1% to 6.67%
Finland +3.1% to 2.76%
Hungary +2.6% to 8.54%
Ireland +6.1% to 8.27%

Okay, can you even begin to fathom the situation in Europe now? The cost of capital is soaring, pan Europe, and the money seems to be evaporating into thin air. Equities are trending lower, alongside precious metals. The only beneficiaries are dollar/treasuries/yen. Taking into consideration the current trends, bond vigilantes will likely make a run on German bunds now, crush Europe, then spread worldwide. The question is, how long until European banks sell US treasuries to fill capital short-falls? Eventually they will need to repatriate funds, no?

Things look grim.

It’s clear to me that the Turkey Gods have been brined and cooked. It was a high probability trade, based on recent history, that failed. What else is new? 2011 has been marked with one high probability trade after another going bust.

Regarding my #1 hedge: it’s income/non risk assets. The mistake I see a lot of investors make is allocating too much of their liquid net worth into equities. This is a huge mistake. The market hasn’t been a very reliable place to grow your money. Frankly, you are better off buying art at a Sotheby’s auction, than fucking around with TNA vs TZA. Losses endured during 2011 should not change your lifestyle, because your total market exposure should not total more than 50% of liquid assets. Some men take their pay checks and dump it into stocks. That’s not investing, but gambling. When you gamble, you make irrational decisions–a sure-fire way to lose money. Take your time and keep your exposure down to a level you can afford to lose.

I rarely take on new accounts for a reason. First, I have never and would never accept money derived from the internet. It’s a dirty place and I do not wish to commingle my internet life with my real life. But in my real life, I only accept 1-3 new accounts per year, all strictly screened for minimum net worth requirements. I do not want to invest money on behalf of someone who cannot afford to lose money. People who have a lot to lose tend to act like fucking retards when the going gets tough. It’s important to ex out emotions, as much as possible, when placing bets. That’s what they are. Let’s face it.

In summary, the world is fucked for Thanksgiving and you’re better off buying crates of high quality wine, than fucking around with stocks. They’re for asshats.

I had gains today thanks to my oversized EXK, AG and RGLD positions. But, I shouldn’t get too confident about retaking any lost coin, on the long side, anytime soon. When I take my head out of the sand, I see torched buildings and body parts strewn across the landscape. My original short thesis revolved around a strong dollar, strong US treasuries and high volatility. You can witness all of the things I predicted in the charts of UUP, TLT and TVIX.

With Italian, Spanish and French yields elevated, as well as Belgian, you’d have to be out of your fucking minds to be long here, unless your name happens to be Lord Fly, Master and Commander of all things to do with Fantasy and Wondrous Turkey Galas.

I have no business being long shit like LULU and RBCN. I’ve hemorrhaged millions over the past week, stubbornly ignoring my own gameplan. Germany has said, repeatedly, they are not interested in Euro bonds. Now the Fed is mandating US stress tests for some big banks, under a 13% unemployment scenario. Can they see the future?

If you just stumbled onto this site and have an interest in an objective market view, from someone who has successfully navigated down markets like this, you’ve come to the right place. All positions aside, the market is in danger of a serious dump out. Crashes do not occur from elevated levels. They are a result of mass panic, caused by macro capitulation. I just took on a new account today and I bought him NGD. Gold and silver are the only assets worth acquiring, in my estimation. Having said that, if the deflation demon really takes hold, both gold and silver will be decimated.

In my personal/aggressive account, I opted against going “all in” on an egregious option trade, in exchange for some AG common. I was thinking irrationally yesterday and needed to smack myself to get my brain back on track.

Bottom line: the market is OVERSOLD, but nothing extraordinary. I like my chances long, only from a unrealistic, crazy policy marker bonanza point of view. If judging purely on logic, something that has been an outlier in this market for 3 years, we should trade down hard over the next two weeks, led by commodity related stocks.

I bought NGD and added to AG.

I’m just going along for the ride here, albeit my “seat” is strapped to the bottom of a pick up truck–face down. Let’s hope to avoid any road bumps, shall we?

Germany is rather adamant about not giving a fuck about Spain and Italy. I am only hating on Germany now because it suits my book. If I was net short, I’d be praising them. I’m fucked up like that.

This is all you need to monitor from now until death:

Italian 10 yr

Spanish 10 yr

France 10 yr

As an aside, keep your eyes on this shit too:

Hungary

Czech

Poland

Belgium (BLOWING THE FUCK OUT)

Austria

Did you know Saudi Arabia was 87% debt/GDP back in 2000? Since 9/11, they got uber rich off the greatest transfer of wealth in the history of mankind, allowing them to pay it down to just 10%. On the other hand, western nations are all bloated pigs, even Germany, even Canada. Countries like Nigeria are thriving, as we suck dick. Our President seems to believe we need more solar panels and wind farms. As he lies to you, America continues to transfer wealth to the camel fuckers in the middle east.

Looking over potential buys, I can only come to grips with gold and silver, once again. The policy makers are adamant about extending the lunacy. Right now the play is deflation. However, if we ever get a bounce, ever, I sense gold and silver miners will be the best plays in the market.

Moving on to NFLX. This company can file for bankruptcy if the ship doesn’t turn around soon. The $400 million raised today is dilutive and the terms are onerous. Their cost to run the business is ridiculous and they no longer have access to the bond markets. I would steer clear of this one–scary.

Bottom line: I am Bill Miller, purposely ignoring reality in exchange for fantasy land.

After the European banking system undergoes a comical $10 trillion write-down, all deposits will be wiped out. The contagion will spread to the United Steaks, effectively cutting off the municipal bond markets, bankrupting retarded ghetto cities, like Detroit and Cleveland.

All of Europe’s big banks will fold like cheap tents, carrying their markets down another 75% from current levels. Financing will be eliminated, which in turn will result in the bankruptcy of any company who depends on short term lending to finance day to day operations. Due to pension fund liabilities, small outfits like Lucent and General Electric will be wiped the fuck out.

Wait, it gets better.

We’re gonna finish where we left off in 2008, with shipping rates plunging by 99%. Counter party risk will be too tenuous to deliver goods. As a result, your local grocery stores and shopping mall will be wiped clean. You will have to resort to the ancient practice of cannibalism, in order to survive the barren winter months.

No matter how rich you are, your mortgage will default, unless you have cash tucked away in a vault. See after the great $10 trillion write down in Europe, $100 trillion in US derivative risk will be triggered, wiping out all of the money ever known to mankind. Every bank and brokerage firm in the Northern Hemisphere will be shuttered.

Banks will try to evict you just to procure the raw materials inside of your home. You will literally need to shoot the marshall from seizing your property, else end up homeless in the streets, where the police serve as warlords for local tribes– enslaving people to farm the streets of Manhattan.

The United Steaks government will collapse, set off by a tidal wave of secessions from southern psychopaths.

In the meantime, German inflation will be firmly under control.

I lost so much money today I can’t feel my fucking face and my eyes are bleeding. All day I had to deal with the absurdity of being right about the market going down, yet long stocks. Not only am I long stocks, I am heavily weighted toward precious metals, the very bane of this cocksucking market.

Don’t go there. Don’t step onto the stage claiming you saw this coming and timed your shorts perfectly. You same clowns got Ape-Raped three weeks ago and you will be violated again, and soon.

Let’s cut to the chase. I sold out of my aggressive-personal account because I’m about to throw a Hail Mary. Into this sell off extravaganza, I intend to take a long bet through options–all or none. For managed accounts, I sold out of that bitch of a whore OMX and USG. I might start buying WNR again down here, especially if crack spreads stabilize. Remember, WNR is 35% hedged @27. Cracks are now under $15. They stand to make a great deal of money on their hedges.

My wife handed me some crystal today. It’s supposed to make me feel better and make me lucky. I took that shit and turned it into dust. I will now snort that dust and see how lucky it makes me.

The rest of you financial bloggers out there talking shit can burn in hell, or 0hio, for all I care. Very few of you have skin in the game, managing bullshit “virtual funds”, making cow-eyed proclamations on CNBC. Speaking of cow eyes, Cramer is looking for every single bank in Europe to collapse, wiping out both equity and bondholders to the tune of (get this!) 10 fucking trillion. Yet, at the same time the dust bowls materialize in Brussels, THE SHARES OF MORGAN STANLEY ARE JUST FINE!

Let me warn you: there is no coming back from a 10 Trilly loss. That’s the sort of shit that wipes out ALL bank accounts, globally. Civilization as we know it would end. Your homosexual FAZ positions will be worthless when you have an ax wedged into the exact center of your skull.

http://www.youtube.com/watch?v=REQ5V2BNjz8

Dear Sir,

I regrettably inform you that  your dinner invitation to Le Casa del Fly has been revoked.  There will be no turkey legs served at the great manor on Thursday. Instead, we shall dine on hotdogs and sauerkraut, preparing for the troubling days and weeks ahead.

I hope you understand this to be a slight against your personhood. True enough, I never liked you much anyway. You drink too much wine and your breath smells of a sheep ass.

Good Day,

Fly