DEATH TRADE

I’m sick of running. The whole year I’ve been dodging bullets, on the short and long side. I’ve been warning myself for months that this market is going lower. I’ve said it here on numerous occasions that an S&P level of 700 was plausible in a recessionary environment. The crisis in Europe has me fatigued to the point of capitulation. How long am I supposed to deal with this fucking bullshit? It’s the same story over and over again.

I hope the fuckers from JEF, MS and GS burn in hell. I’d like nothing more than to read the morning paper and see their share prices at zero. Misery loves company and right now I am overflowing with it. As fate would have it, the two places that I felt were immune to Europe, gold and refiners, are the biggest losers. Thank the devil I sold out of DK yesterday; but I still own some WNR. Silver is down a staggering 7% today. That is nothing short of a calamity. These things happen when markets are in disarray.

My intra-day losses are approaching 4% now. This is clearly a deeply disturbing day for me. I’ve worked real hard, fighting tooth and nail, to avoid getting fucked this year. I’ve been playing defense, keenly avoiding one blow up after another. Remember, I sold 90% of my WNR position north of $17. But now I feel a certain sense of finality with this move lower. It’s different.

Prior to the inane 1,200 point melt up that fucked me in VXX, TLT and short EXH, I had a very cogent strategy. It was based around the idea that Europe could not fix their problem and US treasuries would offer safe haven. As you can see, I was right. But being right doesn’t mean dick. If you’re not making money on your ideas, you’re wasting your time. So I don’t think about it.

Like many others, I too was shaken out of my bearish positions, thinking the Europeans were back in control. Sadly, it was just another dickfaced lie, purported by fancy men in tight pants. There is no bailout. It’s all a fucking rouse and I was suckered into a false sense of optimism. Words cannot describe how angry I am at myself right now, for being exposed and vulnerable to market forces.

I added to my USG position.

Are you interested in big gains? Sorry, you’re gonna have to settle for 3-5% two day returns before sharp trend reversals transform them into 5% losses. That’s been my issue for weeks, small gains turning into small losses. I cut them out because I don’t want them to metastasize.

Case in point: futures were down about 100 earlier this morning, but now they are up. You have been fucked, Mr. FAZ ride this shit down to zero like a bear market hero. You are a child.

All of a sudden, the drug cartel of Mexico is a safe haven. You have to be fucking kidding me, right?

But, but, but, Mexican 10 year yields are 6.34%.

In other news, yields in Denmark, Finland, Czech Republic, Hungary, Poland and Austria have been on the rise this week. They’ve been out of the conversation. It’s always nice to have new guests. I deem them to be rather interesting.

The most interesting new guest of them all is Columbia! Their yields have doubled in recent months to about 8%. The cocaine trade is quite the volatile one.

At any rate, the NYPD is going to club the shit out of the dirty bastards at Occupy Wall Street. They were expecting 30,000 to protest, yet only 400 are there now. Idiots.

In short, take your quick 2% gains and run for the hills.

Enbridge: go fuck yourself.

What sort of Alice in Wonderland shit is this? The amount of oil stockpiled at Cushing is ridiculous, thanks to the tar sands at Alberta, Canada. This oil, alongside the shit in West Texas that is WITHOUT PIPELINE support, is only part of the reason why Brent blew out versus WTI by $30 per barrel. Its been shrunk to $9 on glorious reversals of fortune.

Last week 321 crack spreads started to get crushed on little to no news. Obviously there were some jackass Senators out there who were making directional bets, privy to the pending news of “pipeline reversal.”

Here’s the news, just in case you missed it.

So all we needed to do was “reverse the pipeline” to get WTI higher? Color me cynical, but go fuck yourself. The infrastructure that built the refiner story isn’t solely based around the “pipeline flow.” It’s about NOT HAVING ANY COCKSUCKING pipelines– AT ALL– in the Eagle Ford shale. Fuckers whip Mexicans to carry those barrels on their backs to the rail-yard.

I wonder if they could reverse some natural gas pipeline to make it more expensive. Or, how about this: let’s reverse the Italian CDS pipeline, so it goes lower and people won’t bug the fuck out over Unicredit’s eventual bankruptcy. Better yet, let’s “reverse the pipeline” on America’s brain drain. Yeah, instead of American Dads living vicariously through their idiot kids, with futile attempts to raise the next Payton Manning, they will sit them down to read a book. As you obsess over the basketball lockout, your country is being stolen from you.

Today our national debt hit $15 trillion, officially eclipsing the 100% debt/GDP ratio–a 49% increase since 0bama was elected in 2008. Our borrowing rates are at record lows. The debt is easily financed because America is the standard. However, it’s obvious to anyone but the dicksuckers in Congress, this path will lead to the destruction of the economy. But, feel better, because by the time we go under, the world will be a smoldering mess. The fall of the great American empire will be a giant vortex, sucking the entire world into its center. When we come out on the other end, our aircraft carriers will be docked in Shenzen.

MS dropped by 7.7% to dangerous levels. GS dropped 4 and JEF by 6.4%. You have every reason to panic with BAC in the $5’s and European banks going to $00.00. Fitch announced that US banks have exposure to Europe and that might be bad. Well, yes, thanks you for telling us what we already knew.

French yields are above 3.7%. Spanish yields are 6.5% and Italy is near 7%.

Tell me something good.

RMBS anyone?

You though you had a bad day? Due to the unraveling of the refiner trade, CVI fell by 16%. David Tepper’s Appaloosa fund owns 8.5% of the shares. He also owns more than 3% of WNR.

Today was a ball-wrecking day and we have every reason to believe we are about to get our collective faces punched in. However, that would be a logical market move. If we’ve learned anything this year it is to be illogical and buy the blood. Surely there is no way out of this mess. How can the market go up when everything is so bad?

You will see. As sure as I am sitting here the puppeteers will fuck everyone. If your interest is to be agile and trade with the flow, you will be grape-raped. It’s that simple.

In summary, I am expecting a massive move lower tomorrow, but the exact opposite is more likely. This is the ultimate Costanza market and there is nothing to do with it but watch and pray–always a lovely investment strategy.

NOTE: I will be adding to positions when The PPT flags oversold.

How can anyone hold stocks for longer than 3 days? The market is in a trendless trend now, with both sides scared to commit. Bears know The Turkey Gods are gunning for them. And everyone else knows Europe is bankrupt. How did this all happen so soon?

We are down 50 now; but we were up about an hour ago. Why? No reasons, whatsoever.

Life is a miracle and the stock market is here to fuck with it.

I sold out of AKS and DK today, one for profit, the latter for loss. I have zero conviction with any longs, aside from silver and gold. But even the precious is acting suspect. As I write this, the market is fucking snowballing lower, now off by 90. At the same time, WTI is putting oil bears into the BRAZEN BULL, roasting their stomachs for sport.

Nothing makes sense, except rapid consumption of strong liquor and sandwiches.

I got my Warren Buffett on, buying USG while bathing in asbestos infused water.

I’m down about 0.75% today, led by losses in WNR, LULU and DK. With regards to the refiners: they are being slaughtered due to Enbridge reversing the flow of oil from Cushing to the Gulf. Well, frankly, that shouldn’t result in this massive 50% drop in 321 spreads. This is yet another example of a monster trade being unwound. Anyone who was long Brent versus WTI is getting crushed. Anyone who was betting on 321 spreads expanding is being compressed. Once the dust settles and people realize that $15 spreads are traditionally rich, the stocks will settle down. However, I am not chasing them down here because irrational markets tend to stay irrational until the pain threshold is met. At this point, the pain may be only beginning.

Luckily, both WNR and DK make up less than 7% of assets.

On the other hand, gold and silver stocks are strong, despite weakness in gold and silver. RGLD, EXK and AG are all higher.

LULU is dropping in sympathy with a lot of retail names. ANF may have spooked the sector.

In the big scheme of things, with French yields now at 3.7%, this is a big non-event.

UPDATE: I sold out of DK. I kept WNR.

European yields are easing today, sans Spain. I have every right to walk away from today’s tape. This is fucking stupid bullshit. Here we go again. The Dow is set to open down about 1% and everyone with an ax to grind is grinding it. We were supposed to be down yesterday, but rallied like cocaine addled gorillas. If we close down today, it’s not the end of the world. If the DAX isn’t down more than 3%, I’m not worried.

“The Fly” no longer favours [sic] the watching of the box. I’ve been way to involved in the minute by minute machinations of the market. There was a time, not too long ago, when I’d ignore stocks for 50% of the day–just because I was confident in my positions. But 2011 has been a fucking bone-crusher with regards to volatility. It’s too hard to ignore the swings, for fear of letting the losses become insurmountable.

During the course of 2011, I’ve booked so many short term losses. I rarely let losses extend too far because my conviction, for the most part, has been tenuous.

At any rate, I’m getting the fuck out of here. I am interested in watching a movie or two and will be checking in later for a mid-day update.

Don’t be surprised to see the dollar rise against the Euro, as the EZ tries to punch its way out of the paper bag they find themselves in. At the moment, the euro is down more than 0.6% against the dollar–sending chills throughout Asia and S&P futures. However, is this really a surprise? The euro has to trade down because it’s their turn to QE. Under a loose EZ, I suspect the US dollar will appreciate with stocks. Should that happen, traditional correlations will be thrown into disarray, as people expect the dollar to weaken in order to green light the purchase of stocks. Not necessarily.

Nevertheless, there is a good chance we trade down tomorrow, especially once the European bond crisis resumes trading. If French yields climb again tomorrow, we’ll nosedive quickly. But you should appreciate the sense of urgency being applied to the European pussies. They can’t procrastinate any longer. Blueprints will not suffice. The world demands towering skyscrapers with anti-aircraft batteries on top.

So, for me, this is pretty simple. It’s easy to sit back and watch the panickers manically panic. The Germans don’t have the stones to ignore this mess and elect for mutual destruction. This cold war will be won by those camped out near the fireside.