The Black Flag

The Federal Reserve’s experiment will fail. There is no proof that their insane plan can work. Moreover, thus far, everything they’ve done has resulted in disaster. They are entirely, unequivocally, out of bullets.

Men in green leotards and funny hats are buying commodity related names, at the same time yields are crashing. That’s fucking stupid. Someone is wrong and I bet it’s the dumbass equity trader.

If you made some coin, playing the long side of this tape, take profits and be a man. If you are short, well, good luck sleeping for the next month or so.

My point is this: with all of the trickery abound, why bother guessing the near term direction? With my money, I rather wait for the buyers to exhaust themselves, then go in short, large. I do not think it is smart to chase stocks. Furthermore, I think it is stupid to buy banks, after 100% moves.

Failure to adhere to the warnings outlines above will lead to, without a doubt, the ominous, yet friendly, BLACK FLAG.

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The dot com craze was in full throttle mode and I was taking full advantage. All of the countless hours spent gawking at the bloomberg terminal, researching about the internet, was transforming ideas into cash, via egregious stock market gains, both professionally and on a personal level. My small America Online position, ticker AMER, had exploded in value and my book of clients was robust.

I staffed up, hiring a sales assistant and several cold callers and account openers. Monthly production was humming along at a brisk 100-275k per month; life was good to say the least. I couldn’t handle the order flow, especially since, back then, every single trade had to be written out on buy or sell tickets. Often times I was unable to eat lunch, due to the enormous burden of order flow at work.

Out of necessity, my work hours were still asinine, 8am to 9pm. It was just part of the job.

I deposited a lot of my personal worth into the stock market, moved out of the basement, into a Brownstone. My friends and family really had no idea how much money I was making, since I kept a low profile. They just thought I was “doing well.”

Every month or so I’d spend thousands of dollars on jewelry for my wife, from a private jeweler. One time, I was counting money, about to head over to my jeweler. I had about 15k spread out all over the desk; suddenly, my sales manager walked in unannounced. He just sort of looked at me, bewildered, as if I was conducting a fucking drug deal or some shit. I still remember the look on his face. Good times.

In addition to stupid diamonds, I spent a lot of money on sales leads, thousands of dollars worth. Somehow, someway, I was able to purchase the entire book of client contact information of my old nemesis— that fuck faced sales manager, who had fired me 2 years prior.

I went to work.

I was obsessed with exacting revenge on that fucker, who had fired me and took my book of business, immediately after my Grandfather’s death. One by one, methodically, I convinced his clients to leave him and transfer to me. It was like taking stupid from a cold caller.

Granted, it was a diabolical plan, one that I would never inflict on anyone else. However, he deserved it and more. He was stealing books for years. He had no talent, so he back stabbed his way into a lofty position.

Payback is a motherfucker.

In a period of two months time, I had successfully transferred more than 30 of his clients and millions in assets from him to me. It got so bad, so egregious, my sales manager came into my office one day, displaying a “cease and desist” order, from a certain vanquished former sales manager. I viewed it as an offer of surrender; so I stopped calling his book.

Years later, incidentally, we worked at the same firm together, again. But he never said a word to me about the whole ordeal.

Hence the term was born: “The Fly” wins all the time, even when he appears to be losing badly.

Part 1

Part 2

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While you bask in your pikerness, remember the answers.

[youtube:http://www.youtube.com/watch?v=P93nrB0silk 450 300]

Bear market rally. Nothing more.

UPDATE: “The Fly” versus 3rd tier blogger of choice..

[youtube:http://www.youtube.com/watch?v=9OW_EUDGp88 450 300]

UPDATE II: More Faber.

[youtube:http://www.youtube.com/watch?v=KP_fkmNgzdM 450 300]

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My 100% cash position is worth far more than your bullshit longs and definitely worth more than your shorts.

Chew on that, rabbit raper.

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[youtube:http://www.youtube.com/watch?v=U6zJ6ds2rqM&feature=channel_page 450 300]

Dedicated to all bank shorts.

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FAZ and FAS are on the verge of swapping places. I’ve been warning you fuckers of such happenings for the better part of 2 whole days. To be honest, not having skin in the game sort of disconnects me from the reality of trading. I’m like some remote control General, 10,000 miles away from the battlefield.

Quit your fucking bellyaching. A. I don’t need the money. B. Whenever I choose to step back into the market, I will own it.

So, pretty much, I am here to throw meatloaf at you fuckers, who are long or short this market.

The declines in SKF, FAZ, SRS and EEV are absolutely hilariously horrid. Do yourself a favor, keep your exposure to those bastards minimal, especially when counter trend trading.

For the record, I think the Federal Reserve’s plan to buy $1trill + in treasuries is a ponzi scheme. It is the Godfather of all ponzi schemes, purposely crafted to manipulate the market, via setting rates. It is NOT the way capitalism works. As a result of their fuckery, I predict the corporate bond market will suffer mightily. And, I believe TLT will go to new highs.

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The Fed just announced a massive expansion of their fucking balance sheet. They are in danger of causing of run on the dollar, as their stupid printing presses run until the ink dries out.

As a result, the dollar is getting murdered. Watch it via UUP. And, treasuries are sprinting higher, as big money flees for safety. The initial market reaction is bullish. However, should treasuries continue to melt up like this, coupled with a crashing dollar, the market will get nailed to a crucifix.

If you are short stock here, beware of a blow off top, as the market presses your pain threshold.

The Fed cannot continue the reckless path of monetizing everything. This is NOT bullish for the markets. Do not be suckered into this rally.

However, if reinflation is the current theme, commodity related stocks may bounce here. The only commodity related stock I am comfortable with here is gold, via GLD or DGP.

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We are seeing classic examples of short covering today, with a myriad of low quality names running— no sprinting—higher.

Stocks like ETFC, C, BAC, AIG, GGC, RT, BEXP, SEED, BBX, HIG, GNW etc.

Once again, I want to be in cash, while shit is floating to the top, as the country collapses from within. It’s a very dangerous game to play here, considering the circumstances. We are in a depression. Anyone who says otherwise is either too stupid to understand the numbers or Larry Kudlow.

This rally, like all others before it, shall end. It will likely last for another month or even two. However, when it ends, you will regret being born into this bastard of a world.

The gist of this article is to alert you to the fact that low end names are running higher; the market is chockful of degenerate OTB guys. And, furthermore, you need to head for the hills. These are the weak hands invested, who will sell at a drop of a hat. So, as you sit there, watching your 4 figure accounts appreciate, remember to put strict stop losses on your positions, considering the casino-like demeanor of this market.

NOTE: If you bought KIE on my suggestion, consider taking profits here.

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I must say, I am thrilled to be in cash, not participating in this fuckery. Like I said before, I expect this rally, one way or another, to last until May. It most certainly will last until tax day. You know those government fuckers will try to boost confidence, in order to suck some more money out of your checking accounts.

If I was investing, I would be buying select health care names, like CI and UNH. And, I would be building short positions in HME, ACC, WRi and MAC. In other words, I’d be setting up pair trades.

In addition, I think shorting a little oil here makes sense, since we are still in a deflationary vortex. Then, I’d nibble at names with rich balance sheets, like TTWO or AAPL.

One thing you fucktards need to understand and hear this well: “The Fly” doesn’t need to be invested at all times, since he is not addled with spastic retard syndrome and has enough gains, year to date, to placate all parties involved.

I’ll be back to tossing you fucking faggots into active freeways sometime next week.

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I could not find a salaried job, so I had to make due with being a piker stockbroker, getting paid 100% by way of commissions. The only problem: I only had a handful of clients and the market was knifing lower daily.

Despite being a destitute poor guy, I had a little money in the market. A few years prior, using all of my savings (6k), I bought stock in a company called America Online, ticker AMER. I needed money desperately; but I was adamant about keeping AMER, for it was my lottery ticket.

I began cold calling a corporate directory. Actually, I was obsessed with opening new accounts with partners of this prestigious firm. I worked long hours and was buying one stock for almost all of my clients: Beyond.com, ticker BYND. I didn’t know much about the market back then. However, I did get a sense that the LTCM induced sell off was about to end. After all, the internet was brand fucking new and everyone was ecstatic over the potential growth prospects.

Nonetheless, times were tough for me at home. I remember going 3 months without making any money. And, when I did get a pay check, it was so small, it hardly covered my monthly nut, which was only $1,200, including rent ($400), food and travel. At work, I didn’t eat lunch, because I could not afford it. And, I didn’t dry clean my shirts; because, well, that shit was expensive. Instead, my wife washed and ironed them at home. I had two suits, both were purchased immediately after I passed the series 7 examination. I thought, like most new brokers in the business, I was going to make a million dollars, right away.

The summer of ’98 was a long arduous time, for me, and most people in the business. I started to experiment with margin, since my assets were bullshit and my clients believed in my internet stock strategy. Aside from BYND, I was buying SEEK, GCTY, AMER, CMGI, and all of the fun, high growth, albeit death spiraling stocks.

I cannot remember exactly what the catalyst was, maybe a special Alan Greenspan interest rate cut; but the market bottomed in the fall of ’98 and never looked back. My position in BYND, inside of a week, went from $8 to $14. SEEK went from $18 to $30. I could not believe my eyes. I had accounts, fully levered into the teeth of the decline, all of a sudden explode to the upside. One small account, which had been beaten up badly, went from $3,000 to $12,000 in a single day. That same account, eventually, went to $90,000.

My largest account, at the time, was about $250,000. That too, within a week, exploded higher— to north of $400,000.

Basically, I got lucky. I was positioned at the right place at the right time. My new clients thought I was some fucking oracle, nailing one trade after another. I remember going on a 20 out of 20 streak. As a matter of fact, I still have some of my old book pages, where I’d log my trades, to prove it.

At my firm, I became the “go to guy” for hot stock tips. I knew the internet sector inside and out, like no one else, and always knew which stock would take off next. I bought At Home, ticker ATHM, before anyone else heard about them, and enjoyed a 200% run inside of a few short months.

I played them all, from YHOO to AMZN to BCST.

Within 6 months of being told to “throw in the towel,” I was doing $45-50k in monthly production. The money came so fast and furious, frankly, I didn’t know what to do with it. First and foremost, I paid off the $25k in credit card debt that I built up. Then, I bought myself a few nice suits a respectable pair of shoes and a $3,000 watch.

Soon enough, I was given an office at my firm. I was more than happy to leave the boardroom, where pikers talked shit and old men slept. I had big plans. One of them entailed seeking revenge on a certain former asshole sales managers. Trust me when I tell you, in no way was I grateful for getting shit canned, immediately following my Grandfathers death.

To be continued…

Part 1

Part 3

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