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Let’s Keep Things In Perspective Here

Before we begin, allow me to remind those of you who have memory issues that I’ve been one of the biggest pessimists on the economy for the better part of two years. And before that, I was 150% long on margin. I’m malleable and take positions based on convictions of the moment. I say this because I’d rather not have a first time viewer thinking I’m some sort of uber-bull, any more than I cared for those of you saying I was an uber-bear this time last year while I was shorting the bejesus out of energy.

Now while I don’t like anything about this economy, I know better to get caught betting against markets going into the seasonal uptick. We are going to rally – it’s just going to happen.

First off, remember that every single year after the 2009 collapse, we’ve seen the same pattern of summer doldrums being met with near-depression responses in analysts, financial journalists and market commentators. This always follows by jubilation when winter seasonality invariably picks up spending, and then we get to spend October hearing about how this is “The Turnaround.”

This isn’t a novelty, ladies and gentlemen. My dear readers, we’ve been down this path countless times. The recovery will not be marked by price, but rather by fundamentals.

And the fundamentals have been so bad, pardon me but I have no respect for the intelligencia who are just now reaching the conclusion that, “wow, stock prices may be too high.” Particularly not after hearing them cheerlead stocks for 24 straight months.

Rather, their presence in the pessimistic crowd leads me to conclude that the people who have been consistently wrong are probably still wrong. I’m not exactly rushing to get margined long again – but why should we sell off hard going into the holidays and right after an announcement of what equates to $600 billion more free dollars for financiers?

Come on…

Thus, to those who have been raving that the last week has been so terrible, I leave you with this:

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The Reversal Is Underway

The beauty of owning my piece of shit book is that, when things are about to turn around, I tend to be given a 1 hour advanced notice.

AEC, CLP, and CCJ all ramping higher. I’m betting we close green.

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REGNAT POPULUS IS OVER

Last night at one in the morning, dispatchers delivered signed decrees, informing us that the renegade “proletariat revolutionaries” had been rounded up and delivered to the gallows. Moderately spaced over the next month, iBankCoin’s aristocracy shall gather to watch your executions one at a time.

And amongst the tabbed bloggers, there will be much merriment at the upholding of the alta caste.

This was done because we felt threatened by your “hope” and “zeal”. The status quo was taken as a right of privilege. Grievances were levied against your persons. The upper class prevailed again.

The Fly did this for the same reason Roosevelt took all your gold in the second World War – because he could.

As a token of generosity, we have been told that one of you shall be passed up the hierarchy, much as in the story of the ladies and the tigers. This will give the rebellious folks cause to hope and keep them subdued.

To the victor, I offer early accolades and a hearty welcome. To the rest of you, get back to your homes, and do not dare try and evade the looming census.

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UAL To $0.00

No I’m not actually shorting United. But I should. Because their customer service sucks and people cannot help but hate them.

After an impressive showing by the iBC forces in New York, it was time to depart. And so, making my way punctually to the airport, I stopped only to note that the good Gapandyap was stranded on the runway of – as misfortune would unfold – the very spot I was supposed to be taking off on.

It would seem that the TSA had, while reviewing luggage, glossed over some, and forgetting about it, placed it on their planes.

I would piece together that the TSA then rediscovered these bags and – like the dog who forgets a visitor is over, awakes suddenly to growl and bark at them – idled an entire terminal.

As the suffering men and women from this terminal were rerouted into mine, I found myself in a line twenty and two hundred in length. By the time I reached the front of it, it stretched at least four hundred bodies back.

Meanwhile, father Zeus himself had set out to disrupt our leave. In passing, I see now the error of our ways. While dining on 2 ½ inch steak, we neglected to burn the fat in his honor.

What would you do, if you were the God of freaking lightning?

Ergo, he set to destroy our Sunday evenings as meticulously as possible.

As my departure time neared, the grousing in the lines reached maximum clamor as twenty minutes left little time, most notably since we had yet to even secure our boarding passes. But then, as my fellow companions noted that “UAL has not made even an effort to get those of us who are about to miss our planes to the front of the line”, it struck me.

No they had not.

Now, surely UAL employees are not THAT stupid? Why had they not made even the slightest effort to help secure those of us who needed to leave, post haste??

As the man in front of me furious berated the clerks for their perceived ineptitude – “My flight’s about to take off, you assholes” – the cynical and cunning side of me spoke up from the back of my mind.

“Buddy, that plane ain’t going anywhere.”

As the sky road black with horizontal rain and lightning crashed through in all Zeus’ “pissed-off-ness”, every flight out of Newark, NJ, that godless house of heathens, was cancelled. And so I lay, stuck on a ship that I had not realized had struck aground hours before I even boarded it. As she sank, I dutifully played my strings, while hearing the good Ragin Cajun in the dark calling out.

Now, I will say – there was another possible title for this post I toyed with before settling on the more direct. I had thought about calling it “Nobody Likes Your Fucking Child”.

At this point, approaching the wee hours of “tomorrow”, several children began running around, screaming at the top of their lungs.

Nothing brings out black hatred like children being annoying as all hell. As I contemplated murdering one to set a point – I had the plastic bag picked out, don’t laugh – the mood darkened around me.

I don’t doubt that if I had set on one, the other stranded passengers would have no doubt moved to intervene – by forming a circle of protection around me to keep the parents from interfering while I made a clean kill.

It was not UAL’s fault, but their response was just clumsy. I watched as a nonstop slew of people marched, steadily, almost in doldrums, to launch suddenly visceral assaults on the unsuspecting terminal managers. And yet, they couldn’t figure out how to inform everyone of what was going on.

It became a joke, as every hour they announced all flights would be delayed by one more hour. To appease the angry masses, many deals for sympathy were cut at a great price. They began doling out $700 vouchers and free room and meals, to try and assuage the passenger glut that was created.

The moral of the story is: you cannot control the God of Thunder when he decides to strike your operation dead. But you can “not be a dumbass” about the situation.

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Statistics Traders Gone Wild

I’m going out on a limb here, to say that this market is being heavily influenced by the power of raw probabilities being taken sharply out of context.

There’s no other reason I can think of to explain this rally.

All the qualitative analytics, and all the numbers on the ground, are very bad. Safe haven treasuries are going ape shit to the upside. The Germans are slowly abandoning the EU to death. China is as gay as ever.

But for the last two years in a row, we’ve rallied into the waning months of the year. And I can’t enjoy a drink poolside without overhearing clowns talking about presidential year market statistics.

So, I’m laying my guess out there. We’re rallying because in their very souls, most men will not hesitate to lay down on train tracks if you offer them some money. They’ll do so without even bothering to check if there’s a train coming.

Now, this works just fine for me, as I’ve sort of skedaddled off to the side. I guessed something like this would happen – although if you’d asked me earlier in the year, I would have pinned October.

But make absolutely no mistake, if we don’t get some major event facilitating all this good will in the markets, there will be hell to pay. I’m scared to be on scene, when the guy lays across the tracks just in time for the locomotive to carry him to the 6 o’clock news…

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An APC Sort Of Day

Today was characterised by “reversal”, and nowhere was the reversal more profound than in this oil company. The venerable Po Pimp and myself had a fine day, stacking our coins and counting them tenderly.

Anadarko is being sued for massive liabilities for the second time in three years. The first was for their non-operational interest in the Macondo well – which they could have easily gotten off on.

The second is for spinning off a company in 2001 called Tronox, which amongst other things, was responsible for cleaning up several thousand polluted sites, thanks to the nature of the business they are in (colorings, like paints).

Low and behold, eight years later during the worst economic crisis in almost 100 years, Tronox goes bankrupt. Imagine that. A company that went bankrupt in 2009?

So now their creditors, including the EPA, are trying to pin APC with spinning off a “shell corporation” that was intentionally strung with bad assets and excessive liabilities (naturally, Tronox is no longer responsible for anything, as they were relieved of those inconveniences in bankruptcy court). And the price they’re trying to hit APC with is $25 billion.

Hah! Might as well be $250 billion, for all the chances they have of winning, or collecting for that matter.

The piss head art majors in charge of the EPA seem to be figuring that out, as now APC is in settlement talks.

But APC’s management is pragmatic. They could have put a screw in BP when the Macondo well blew, but instead they agreed to settle for a few billion over a long haul. Whatever the reasoning, they seem to feel that settling on these environmental issues, even when they’re completely without blame, is better than…something.

Personally, I think it’s worse for their image to get caught settling, because then deranged environmentalists will hold it over their heads for the rest of their lives. I’d prefer they run the EPA into the cliff side, and watch them walk away from the suit with nothing.

But I’m not in charge here, am I?

So APC will probably agree to a public wrist slap and handing a small victory over to that pathetic excuse of an organization, in exchange for being left the hell alone, and maybe some goodwill on some practically inconceivable level.

Sadly, I only have about 5% of my assets in APC, having taken outsized gains on the other half of the shares I used to own, just last week.

Still, with the state of affairs, that’s more than enough oil company for me.

Also, yesterday, I added back on a 5% stake in ERY, leaving me a 25% cash position plus that aforementioned short interest.

Now, I’m off to enjoy some red meat. Enjoy your evening.

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