THE RETURN OF THE FORTUNE COOKIE

It’s been a long time since I shorted stocks. I’ve been reluctant due to incessant policy intervention. However, I’ve begun to allocate about 15% of my assets to select short sales, full knowing my cost basis will need to be revised into rallies. Keep in mind, this only makes me 5% net short, as I have 10% of my assets still long. For all intents and purposes, today’s foray into the dark bowels of Wall Street is nothing more than child’s play, a distraction of sorts.

I have zero confidence in buying stocks because I cannot base my entire long thesis on the whims of Germany. Having said that, I am sure there is some policy forthcoming that will lead to a rally. Nevertheless, I am not interested. The underlying fundies are still abysmal, worth betting against.

I started short sales in EXH, LM and NTRS, all for separate, yet related, reasons. God willing, all of them will trade to zero and their employees fired, then sent to some distant war zone. Realistically, I am just getting my feet wet, so don’t consider this to be a “Fly gone batshit, so now the market can rally hard” sort of event.

Although the futures are up this morning, I am not impressed. As a matter of fact, it may be a good entry point for some short positions. The only way Europe solves their problems is if they get Germany to buy Europe. The only way it makes sense for Germany is if they had control over enforcing taxes. Without an occupation force, the Greeks, Portuguese, Irish, Spaniards and the Italians will continue to live their lives through vagrancy and contempt for any semblance of honor.

My #1 tell is TLT. If it doesn’t get plugged, the market is going lower. Both silver and gold have been displaced as the ultimate safe havens by the dollar and treasuries. This is exactly what happened during the 2008 meltdown. I do not find pleasure in seeing gold get clubbed to death, despite my deep seeded disdain for the ancient metal. But you fuckers who horde that shit have it coming in the worst way possible. Before sovereign governments go insolvent, they will liquidate all of their retarded precious metal assets. By the way, hedge fund managers will be forced to sell too.

Anyway, I would love to offer you jubilant news of Rick Ross sponsored cocaine parties and gorilla boulder smashing contests. However, things do not seem normal to me. Regrettably, I am without an edge in this market, after spinning myself stupid over the past two weeks. The penalty for my misguided market position has been 10%, over the past two weeks. Just a short while ago, “The Fly” was at all time highs, bragging about abducting farmers in 0hio and releasing them into outer space. Now I am up just 4% and in desperate need to find the next trade.

With God’s good grace and a little mathematical precision, I will be back on top, just prior to Thanksgiving. But, for now, I need to eat sandwiches and avoid stepping into custom made European murderholes.

By no means am I title whoring, in order to receive more hits. iBC isn’t about that sort of shit because some of us are space alien magicians with orbital cannons at our disposal.

Watch this video to understand the special secrets of successful trading.

It was reported this morning by Sky News that the G20 is now preparing for a Greek default, AFTER Cannes. How gay. They (Greece) will likely get stop-gap funding, then an “orderly” default. I am not so sure about that.

The only silver lining from last week is Italian and Spanish yields didn’t go parabolic. Italian yields are 5.60%ish and Spanish are around 5.2%. Both high, but not signaling catastrophe yet. My guess, the ECB has given up on Greece and is trying to ring fence Italy and Spain. Should the contagion spread to Italy and Spain, you better get to cash an/or net short quickly. Also, keep a close eye on French and German banks, all showing signs of extreme distress.

If you want to do some homework, go out and find who has the most exposure to Europe and set up some short sales. This feels like the 3rd inning, so there is still plenty of time to play “the next Lehman” game.

UPDATE: The drama continues. It appears Europe is preparing a “multi-trillion” dollar fund to crush the crisis, all backstopped by Germany. Naturally, this is all talk and we know how the Europeans love to drag their feet. This would likely result in a Greek default and a complete ring fencing around Italy and Spain, in order to stop the contagion. Under these conditions, I’d expect stocks to gap up sharply, as the global money supply increases.

Stocks plunged this week and the finale was played out today in the precious metals market, where silver and gold plunged amidst rumors of cash calls. Although I despise gold bugs, I am not going to besmirch them today. It hurts to lose money, at such a rapid pace, so I’ve decided to set up a “RETARDED SILVER TRADERS” charity for all of you.

We will raise money for THE RETARDED SILVER TRADERS OF AMERICA FUND (TRSTOAF tr-st-ofe), so that they could buy more AGQ and HL, amidst flaming barrels of garbage and cadavers.

In all seriousness, you’re all gonna get splashed on Monday, after the French surrender and sear their banks in a red wine reduction. Just kidding.

See, I’m not an investor anymore. Therefore, I am liberated, free to travel the Earth and harass people in an unsolicited manner.

Truth be told, the gold and silver holders had it coming. It was God’s way of further punishing John Paulson for his 2007-2008 deal with the devil. Everyone has felt the burn of this bear market. Now it’s time for the RETARDED SILVER TRADERS OF AMERICA to “enjoy” it too.

Into the idiot tape, I was 90% cash, long a little GSVC, WNR and ERY.

COOL UPDATE: Hugh Hendry in a BBC interview yesterday.

I want you to remember something, especially the new coke can kickers, visiting iBankCoin as if you were worthy. “The Fly” wins all the time, even when he appears to be losing badly. My recent set back is like giving fat kids head starts in 100 meter dashes. Go ahead and catch up to me, while I sharpen my sword, readying to chop your heads off.

Sure, we all go through rough patches. What makes the mark of a man is how he gets up after being sucker punched. “The Fly” has a long history of getting knocked down, only to get back up with the vengeance of 10,000 serial killers in order to punch heads off with dynamite tipped brass knuckles. As you sit there doubting me, my wins are marinating in the refrigerator, waiting for Chef Fly to fire them up. Emphatically, I understand you cannot compete with a person, such as myself. However, let’s tone down the small dicked jabs at yours truly, for this market has been my bitch for a decade plus now.

What you need to do is focus on your revenue streams. Surely the stock market isn’t the only place where you bank coin. True wealth derives from what a man takes home on an annual basis. While it’s true, the stock market may offer outrageous tailwinds, upping discretionary income to Rick Ross status. However, at the end of the day, this shit is all smoke and mirrors. I try to illuminate things for you, best I can. But some of you are either too young or stupid to understand my message.

If you are risking capital today, may the Gods bless you. But don’t think for a second this sell off is resolved. The Europeans are more interested in ironing their tight shorts than deal with their banks. Wouldn’t it be a bitch if France nationalized their banks? Yeah, that’s what we’re dealing with now. You can make coin through buying the blood. And, this whole fuckness may get resolved, leading to a monstrous rally. However, the downside risk is too great if you are wrong.

France goes and the Dow sits on the high wall, chilling at 6,000, easing us into a turmoil.

Early this morning, I sold out of LCC and AG, upping my cash position to 90%. I believe this is my highest cash level ever, or since the tragic days of 2001. Back in 2008, I was all in short.

I still own a small position in GSVC and WNR.

Also, to hedge that, I started a very small position in ERY, with a tight stop.

My position is simple. I have zero interest in trying to time the next rally. In my opinion, we are on the cusp of capitulation, whereby overzealous bottom fishers get “machine gunned” down in unbelievable fashion.

I am rooting for the bulls; but I am the fuck out of this tape and will revisit it later next week.

Back in 2007-2008, Treasury secretary Paulson was doing ridiculously bad press conferences, stuttering his way into fits, trying to calm the markets. What is this fuckface Geithner doing?

ABSOLUTELY NOTHING.

He did one interview with Cramer and was very smug in his demeanor, frankly.

What is he waiting for, a surprise MS bankruptcy?

Clearly the market is suggesting something is severely wrong with OUR banks, not just Europe’s. Yet all we hear is “everything is okay” and “all of the problems are in Europe.” Well, looking at the insurance, brokerage and bank stock prices, I beg to differ.

Gold and silver are enjoying catastrophic drops this morning. If there is one thing Bernanke accomplished via “Operation Twist”, it was to annihilate the dollar haters and make treasuries the ONLY safe haven in the world. Think about it. The Swiss Franc trade is dead, as is gold and silver. Yen is still alive, for now. But the main beneficiaries are treasury and dollar bulls. Obviously, this bodes well for US financing.

I might execute one or two day trades today. But make no mistake about it, we are in liquidation mode. Tread carefully.

Obviously The PPT is oversold now. But that’s not what’s interesting. Today’s close tied the lowest technical score ever. The last time we were this oversold was 2/17/09. Shortly after 2/17, the market traded way the fuck lower, in “fuck you, you’re dead” fashion. It’s one thing to be oversold, but another to be dangerously oversold. The market is whispering something to us, ever so quietly.

For the record, I do not want a collapse and do not stand to gain, being net long. However, let’s face it, we have nothing to run on anymore. For over a year we ran purely on POMO and Ben Bernanke’s beard. Now we have to run on cheap stocks and a good economy. Get it?

I guarantee you policy makers will throw the kitchen sink at this debt crisis and at some point the market will scream higher. Because of this, I will not be shorting anything. As a matter of fact, I will be a buyers of basic materials at the right time. My list will be furnished inside The PPT.

Today’s sales were in tech. I cleaned out of VMW, AMD, MU, CIEN and FFIV. For all intents and purposes, aside from CIEN, they held up well during this meltdown. Had I went long some basic materials, I would have lost a lot more. I kept AG, GSVC (illiquid), WNR (less than 2% position now) LCC and will liquidate into rallies.

My buy list encompasses the most battered basic material stocks, with the best fundies and highest % of shares sold short. I want to own stocks that are heavily shorted because the short sellers offer support underneath the stock, via covering. Also, they provide excellent tinder when the tide turns.

0bama wants to raise taxes so that we can spend it on bridges and tunnels. Unfortunately, said bridges will likely be MADE IN CHINA. That’s right. This country is so fucked we’re actually outsourcing the production of our bridges to China, because of their slave labor. So what exactly are we doing?

Answer: importing slave labor.

I sold out of the majority of my stocks this afternoon because I genuinely feel we are at the precipice of a crash. The upside moves in TLT and UUP, coupled with the outright liquidations in commodity, tech and financial related names, has me thinking something very ominous is looming. Having said that, I left 30% of my assets long in the event we knee-jerk higher on policy announcements. Make no mistake, policy makers will announce something and soon. They cannot just let the ship sail into the sunset without trying to sink it first.

The reasons for selling was very simple and concise. I was down 4% intra-day and up 4% for the year. I cannot ignore such mathematical coincidences. I took it as a sign from the Gods and left the table a winner. When we do rally, I will be prepared to toss cash into the market like brokers throwing themselves into lit fireplaces tonight.

Everything is collapsing because cash calls reign supreme.

Coming soon: major EPS cuts, French bank rumors, Euro-Libor concerns, Italian 10yr bond concerns, US spending bill impasse, Rumors swirling around US investment banks and custodians, major hedge funds liquidating, and significant downside revisions in US GDP forecasts. The upside? Possible inflationary policy response aka “nothing new or special.”

For me, the choice was simple. My only regret is not selling yesterday.