Get Cute; Lose Your Legs

You asshole traders make “The Fly” sick, always trying to time tops or bottoms. Quite frankly, the sooner you realise [sic] how stupid and gay you are, the quicker I’ll stop getting sick from your “low-rank” banter.

In other news, U.S. subprime is now melting down Chinese banks.

Shocker.

HONG KONG (AFP) — Bank of China (BOC) may report lower profits or even a loss when it announces its 2007 results in April due to writedowns on struggling subprime investments, a report in Hong Kong said Monday.

The bank may announce a significant writedown on its 7.95 billion US dollars of investments in securities linked to US subprime mortgages, the South China Morning Post reported Monday, citing unnamed mainland banking sources.

Senior banking regulators had already warned the mainland leadership that BOC, as well as the Industrial and Commercial Bank of China and China Construction Bank, would have to make provisions for all their subprime-linked assets.

BOC, which has the biggest reported subprime exposure among Chinese banks, posted a 45.5 billion yuan (6.3 billion US) net profit for the first nine months of 2007, 40 percent more than a year before.

In September, China’s second-biggest bank said its portfolio of investments linked to the subprime market had been cut from 7.95 billion dollars from 9.65 billion dollars in August.

It set aside 322 million dollars to account for possible losses related to the assets.

However, subprime securities took a further hit in the fourth quarter, forcing several top US banks to post record losses for the period.

Goodbye Bank of China. Nice never knowing you. May you die with the dogs at [[LEH]].

Oh yeah, it looks like a grand time to “buy bank stocks recklessly, ” as future asshat of the week award winner, Doug Kass, said on Friday.

NOTE: [[FXP]] longs will be happy to know Ping An Insurance (FXP component) just filed a monster A shares offering. As a result, the stock is getting mushroom clouded.

UPDATE: China is getting knee-capped, down more than 5%.

In one of Ducati’s comments, he mentioned some possible future hammers to befall spasticly retarded bulls, one of which is: stock buyback lending.

It’s funny that he mentioned it, since I’m currently doing some research on the matter.

Here is a good read, albeit a bit dated.

The following companies (there are many, many more) wasted obscene amounts of capital, propping up their share prices, through unnecessary share repurchase plans.

• Countrywide (CFC)
• Home Depot (HD)
• Citigroup (C)
• Fannie Mae (FNM)
• Freddie Mac (FRE)
• Ambac (ABK)
• MBIA (MBI)
• Circuit City (CC)
• KB Home (KBH)
• Pulte Homes (PHM)
• Centex (CTX)
• Toll Brothers (TOL)

In short, CEO’s and members of boards will have to answer to the egregious mismanagement of shareholder dollars, which were squandered in buybacks. The numbers are in the hundreds of billions, all done to keep share prices artificially high, in order to do who knows what.

Burnt coin, if you ask me.

[youtube:http://www.youtube.com/watch?v=Er1bwzZCik0&feature=related 450 300]

The much anticipated bounce is near.

With my money, I’ll risk being wrong short term, for right long term, by staying short.

Before I go, just know, it takes balls to hold onto big dicked gains.

As all of you know by now, “The Fly” has balls the size of whole planets or large moons.

Have a lukewarm weekend.

Off to celebrate, via 2 1/2 inch rib eyes and an aged bottle of Bordeuax [sic].

For those of you who are young/stupid traders, listen up.

If the economy is in the tank, all Federal Reserve cuts will be met with selling. It will not matter, until economic growth recovers.

Keep in mind, we have yet to see a big spike in unemployment. If you think the market is bad now, wait until that shit brick hits the fan.

What’s amazing to me is the bullish sentiment of all my bearish friends. These fuckers have been waiting for this moment, forever. Yet, here we are, down a mere 7% YTD, and they’re trying to catch upside trades.

Unlike them, “The Fly” is able to bank coin in all kinds of tapes, with the marked exception of summer time tapes. As you know, by summer, “The Fly” will be fat and lazy, from living off the fat of the land, during the colder months.

It’s worth noting the annoying rally in [[XOM]], which is keeping my [[DUG]] lower.

How dare they.

If the Fed doesn’t cut rates by 3:00 today, we will close at the lows, no doubt.

[youtube:http://www.youtube.com/watch?v=TqbxZG6FMeI 450 300]

Tech companies will not withstand a general economic slowdown.

What kind of crack pipes are the fuckers on CNBC smoking?

I mean, really.

I ask myself, what kind of horse shit is this?

Then, I realize, it’s stock market horse shit. The kind of shit that falls on your face, while you’re on a hot date—in a high end restaurant.

Do the above sentences make any sense? No, of course not.

Is it important to be coherent at all times?

No, only when your Mother is around.

Looking at today’s tape, I genuinely feel bad for people who are long stock. I know the pain they are feeling in their gut right now— and it hurts and it sucks.

The stock God’s are fucked up like that. Do you know how many goats and Romanian lions I had to sacrifice, in order to get in their favour (sic)?

Quite a few, might I add.

Just when you think the market is going to break the fuck out, it punches your balls in, with the strength of 10 Marvin Hagler’s.

Sadly enough, many of you were probably celebrating, drinking champagne, eating low-end shrimp. Declaring final victory over the bears; because today was the bottom.

Then, all of a sudden, some jerkoff, with gold chains, broke into your office, punched your eyebrows off, drank your champagne—then stole your wallet.

That’s the market. Enjoy.

The problem with the market is simple:

Our mortgage insurers are on the brink of disaster. Keep an eye on [[MBI]], [[ABK]], [[RDN]] and [[MTG]]. Oh, and now people are speculating that the CFC-BAC deal will not get done. Frankly, I think it’s absurd; but the share price doesn’t lie.

If this market confuses you, just ask yourself one question:

With everything that has transpired in our economy, namely our banks, do you believe, in 11 months from now, the Dow Jones will be down a mere 7% or where it is now?

If so, fear nothing but empty manholes and go long.

In my opinion, we still have another 7-10% of downside left.

Viz.

NOTE: The banks are just getting annihilated here. Hence, I’m banking a profuse amount of coin in my [[LEH]] short and [[SKF]].

NOTE II: When stocks like [[S]] start tanking like this, you know the market is fucked.

Remember [[CMO]]. They own a portfolio that consists of 99% gov’t agency bonds.

As rates drop, spreads will widen, enabling them to bank coin, which in turn will be passed along to shareholders via dividend hikes.

Look for the dividend and share price to appreciate on every rate cut.

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