18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
16,734 Blog Posts

Wall Street, Horribilis

There’s an idle decadence in the air, a shared feeling of invincibility that is always born in the very best of markets. Believe it or not, I was once a young man, filled with promise, fastidiously racing up and down Wall Street in search for extreme fortune. I had made a small score in late 1998 and was interested in another. The year being 2000 and all, markets at new highs, the internet renewed the spirits of those looking to invest in innovative fields; there was very little in the way of us youngsters making our mark — to be loved and cherished by our well-to-do northeast clients who hailed from families rich with tradition and power.

My partner and I had done decent enough business to deserve an office, but not one with a window. Those were reserved for the other brokers, the one’s who were producing large sums of monthly commissions for a long time. We had only recently been big producers and my age was hardly something that was viewed as an asset back then — merely 23, wet behind the years, and I looked 18.

We had a small staff of cold callers, account openers, and even a secretary. I felt as if I could do nothing wrong, since I was a genius — a providential beneficiary of a roaring bull market — one that had seen the NASDAQ climb by 85% the year prior. All of my picks outshone the others. My hand for picking the very best stocks become known around the firm — which caused a small crowd of brokers to constantly populate outside our office to find out what we were buying next. Most of the other men were too interested in spending their money, rather than learning how to make it. Even the lowest producers were making $200,000 a year back then. Money was easy, spending it was easier, and making it was the easiest.

Until it ended on March 7th, 2000. Both the Dow and the Nasdaq tumbled hard. We were heavily leveraged, so we were scared, almost instantly. Accounts that were once up 100% for the year were teetering on break even. The selling didn’t let up and the margin calls started to become a regular chore. Clients would soon be popping into our office before 8am, deeply concerned about their accounts — begging to hear about our plan to get it all back.

In one particular case, the account had gone deep into negative equity. My partner had miraculously convinced him to send in $50k to get back to zero. This helped us avoid eating that loss, something that was happening with regularity by May of 2000.

The idea pitched to us, over and over again, by management and experts on the teevee, was that the downturn was temporary and that things would come back to the way they once were — only better. For if you were able to raise money to buy the blood that was flowing freely through the streets,  it was entirely possible that you’d make such a mark that your firm would let you choose whichever office you wanted, one even with a window.

Things never were the same after that. Markets didn’t really come back with vigor until early 2003, which lasted, tenuously, until it broke apart and shattered again in 2008. Like a dream, when it ends, it cannot be continued. The faineantise illusions we had painted for ourselves were cast in water colors, easily wiped away and erased with inclement conditions that older men, who had been though previous market squalls, understood and prepared for.

When this market cracks apart, and the seams from which it was built upon come undone, how will you respond? Will you, for example, chalk it up to another buying opp, loudly declaring to “buy the dip” — for the 3:30 algo Gods will surely save you? Or, perhaps take a different tact and prepare for something worse?

Ostensibly, one thing is evergreen in this regard, hindsight is the only unspoiled and unbiased truth laid bare, most often obvious to those who were too busy keeping their heads up their backside cavities while matters took a turn for the dreadful.

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WTI Blows Out, War Looms, Stocks Are An Elaborate Trap

WTI mudstomped bear shitters to a pulp today, higher by 3.1%. This move was due to the likelihood of armed conflict with N. Korea, not because of economic growth. The specter of something dreadful happening in the world increases each and every day, the ultimate end game in having to deal with a balance sheet that reeks with anguish, $20 trillion reasons to collapse society.

Today’s N. Korea press conference had an air of professionalism to it, which made traders think those fuckers might really be serious.

The sell off was muted, down just 56 NASDAQS. While the carnage was significantly more severe in the tech sector, with some names down 10%, today was, more or less, a probing exhibition. In my estimation, today was a warning to those playing with fire, long stocks at record highs, placed at all time high valuations.

So the only logical thing to do was to sell it all, go long UVXY and YANG, then wish for the worst.

I did this with the comfort of having an entirely different portfolio that was higher today. Even still, if forced to bet, I’d say, definitively, we’re heading into thick weeds navigate by apex predators. You weak-links will be foisted onto the cold ice and ripped apart, from crown to foot, for having only ignorance as apprentice to your actions.

I, “The Fly”, transcend your world and have been several steps ahead of the masses for two decades long. While the losses I took today were most unfortunate, they were both necessary and vital in preserving my innate instincts for survival. I shall not be rocked to sleep by the homosexual operas playing in the foreground of this delicate market. Behind it all are people wholly interested in opportunity by way of destruction.

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I sold out of all of my positions today, excluding my quant. This fucking market is just getting started on the downside, led lower by a tech sector that is fat and bloated, dying to get popped. FANG stocks are off by 3%, led lower by robotic Zuckerberg, mechanically taking losses like a true machine today.

I took action before the end of day bombing hits, buying both UVXY and YANG — a levered bet on volatility and short China, not once, or twice, but three times.

Look at that shit right there, poised, eagerly waiting with the energy of 10,000 thoroughbreds.

Betting on nuclear war with N. Korea is fun, considering the ancillary benefits — such as harrowing nuclear fallout in Beijing. We’ve got work to do here, getting ready for the broken elevator trading action. Complacency is still imbued in the air, thick with narcism, a false sense of entitlement thanks to 9 years of Federal Reserve assistance. All of that is ending now. A new beginning is beckoning, one formed with malice and built upon a pedestal made from weakened clay.

Prepare for bedlam.

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Oil Stocks Rage Higher as Crude Hits 8 Month Highs

Hurricane Harvey was the optimal entry point for the beaten down oil sector. Over the past month, returns range in the ballpark of 20-40%, thanks to a surge in crude — pushing it to 8 month highs. The median return for the oil drillers, 1 month out, is +18%.

Although crude is at 8 month highs, it really has gone nowhere in the big scheme of things. Crude stocks were down ~40% YTD, before this run. After Harvey hit, WTI dropped because refineries went offline — creating a rich spread between Brent and WTI. Now that supply is back online, WTI has jumped — but the Brent spread remains. This, to me, is a mystery.

While the temptation to go long drillers is palpable, it makes more sense to buy the refiners, since they profit from the WTI-Brent and heightened crackspreads — thanks to supply disruptions.

My gut instinct has been wrong with crude, but seasonality suggests now is the very worst time to be long oil.

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Chinese Stocks Racked with Losses After Cyber Laws Enforced by Regulators for Publishing Fake News

I had to fish for this for a few minutes — taking precious time away from my day of eating gateway meats.

China’s cyber watch down pressed its boot down on several tech firms for violating cyber laws — including BIDU, WB and Tencent.

The Cyberspace Administration of China said violators would receive ‘maximum penalty’ for failing to remove FAKE NEWS and porn. Plus, content that could be misconstrued for inciting ‘ethic tension’ and ‘social order’ were pressed upon an innocent, unsuspecting, Chinese public of dog eaters and plastic rice producers.

“The internet does not operate outside of the law… the CAC will seriously implement the new cybersecurity law and other regulations to increase territorial supervision and enforcement efforts regarding the internet,” said the CAC.

The subsequent result of this regulatory action is bloodshed, flowing freely throughout Wall Street.

Here are some of the losers in the China sector.

This pin action is way outside the ordinary trading action for Chicoms and has resulted in the Exodus oscillator swinging hard into oversold territory. The level of technical damage is so severe our overbought/oversold oscillator is at the lowest level since December 2016. This is crash tier pin action.

I might just step in here.

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N. Korea Threatens to Shoot Down American Planes; “The Fly” is Discretionarily Beat Down

Admittedly, I was out sauntering while this ordeal happened. N. Korea’s foreign minister called for an impromptu press conference outside the UN in NYC, menacing to shoot down American bombers — saying Trump had all but declared war on them.

“North Korea has the right to shoot down U.S. warplanes as part of its right to self-defense under the United Nations charter.”

“all options are on the table for North Korean response…”

“The whole world should clearly remember it was the US who first declared war on our country,” Ri said to reporters in New York as quoted by Reuters.

For some odd reason, this had a profoundly negative effect on stocks, particularly those domiciled in Asia. Unfortunately, I happen to be long a sundry of Asian centric equities, one of which that promoted university in China. I cannot describe it any other way, so I’ll just say it. My ass is being bitten by pitbull — as I run away, indecorously, through a minefield. Scratch that, I haven’t sold anything yet, so I’m just getting chewed on — in a manner that is completely intolerable. There is a heavy rarefied air on Wall Street today — with the Nasdaq off by 60, WTI +2%, gold +1.1%, dollar +0.92% v euro, BTC +4.6% and bond yields dropping lower.

I have two totally different portfolios running at the same time in Exodus, one of which is quantitative, the other discretionary.

The discretionary portfolio is off by 2.8%, only buoyed by a monster gain in UAN. My BEDU, OLED, AAOI and SMI positions have been taken outside and beaten like a dirty rug.

My systematic portfolio, one that only depends on the AI in Exodus, is up 0.6%.

Now I can look at this two ways, one ashamed for being crushed by my own robots, or thrilled that my own testicular failures have prove that the future of investing lies within the boundaries and disciplines that man creates, managed by machines. Either way, I’m getting my balls jingled for me — hit aside with a baseball bat.

The stocks that rose the fastest are getting flushed with speed.

Amongst the losers are BEDU (-10%), EVTC (-10%), SFUN (-9%), TRIP (-8.8%).

You get the picture.

I’d like to see the bastards try an army draft to build up enough manpower to defeat the enemies they’re creating today. Who needs any of this shit? Who asked for it?

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Morning Poppers (The National Anthem Edition)

Good morning misfits, I hope you had a solid 3 years of shut eye last night. My health has made marked improvements over last night and I no longer feel as if laying on my deathbed. The President’s Twitter account is silent so far this morning, likely due to General Kelly chasing him around the White House this morning, hoping to stop The Donald from declaring war on the NFL.

Futures are slightly lower and the dollar is ripping to the upside, higher by 0.67% v the euro — a forlorn development for S&P bulls. S&P futs are -2, BTC +2.7%, and WTI/Gold essentially flat.

This is a do-nothing but bitch and moan about the rent type of morning.

Over in the analyst community, a craven place of ill repute — filled with spinsters and grifters, it’s quite the busy morning.

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Who Made Dennis Gartman “The Commodities King?”

Who’s in charge of doling out such titles anyway? Is there a chance, perhaps, someone in the media could title me “The Blogging Emperor” — enabling me to make wide sweeping proclamations about the future of online media?

The craven vultures from CNBC are out with a fresh story this evening, discussing “The Commodity King’s” stance on gold and how it’s heading ‘demonstrably’ higher.

“A year from now, gold will be demonstrably higher than it is right now,” The Gartman Letter’s founder told “Futures Now” in a recent interview. “I would certainly think we could see $1400 [an ounce] in dollar terms.”

“This is a correction but let’s understand the last rally that we had took off from $1200 to $1370. The fact that we’ve fallen back below $1300 I think is relatively inconsequential,” he added.

“I am not a gold bug. I don’t believe the world is going to come to an end. I don’t think you own gold because you think governments are going to be collapsing around the world,” he said.

His reason to own gold: Central banks and easy money.

“The monetary authorities are all still remaining expansionary,” noted Gartman, given that easy central bank policy tends to undermine major currencies like the dollar and euro. “In that instance, the one currency that will probably do the best of all is gold.”

He doesn’t believe the Federal Reserve’s intention to start reducing its $4.5 trillion balance sheet in October will be a headwind for gold. The unwinding of the Fed’s crisis-era policy “is going to take five or six years. This is not something that will occur overnight,” he said.

I’m so glad that I sold the last of my gold position on Friday. There isn’t any reason to be on the same side of a Dennis Gartman trade, not now, not ever. This whole Commodity King business is awfully tiresome. It reminds me of boiler room tactics, where some brokers would declare themselves to be child prodigies in investing — born geniuses, sent to a phone bank inside of a third rate firm to save the average investor from the dreadful underperformance of white shoe firms.

Even still, a 7% move from current levels isn’t exactly something to beat off to. The idea that gold is set to trade ‘demonstrably’ higher because the Fed is set to tighten their balance sheet by $4.5 trillion over 5 years is nonsensical, inane, and tragically stupid.

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Off to See Dunkirk Again

I had a rather uneventful afternoon of meetings, bookended by snacks. I started off the day with the darkest, most thickest, coffee you’ve ever seen in your life. I dubbed it ‘the most evil cup of Joe these northern lands have ever seen’ before sipping it.

I had an early lunch, which consisted of a dozen veggie sushi rolls — and then it dawned on me: I really, truly, don’t care about dietary restrictions, animals, or even debilitating illnesses. Then why on earth am I punishing myself to fetter out my days as a lowly weak vegan? Already I am able to see the effects of a meatless diet. My bench has been halved, my gut doubled, and my overall health is very meek and meager — a ham and egger lifestyle if I’ve ever seen one. I shot over to the local grocer, being all rebellious and shit, and purchased a gateway meat: tuna steaks and some smoked salmon.

When I got home, I ate half the package of salmon, which was marinated in herbs and vodka. I then made myself a faggot milkshake of chocolate almond milk, banana, and a spoonful of peanut butter.

I saw Dunkirk for the first time in theaters the other day and was dumbfounded by it. As many of you know, I consider myself to be a foremost expert in the cinema arts, having dedicated two full years of frantic viewership of all the greats — consuming information on a scale that could only be described as ‘industrial.’

Dunkirk was, by far, the finest war film ever made.

What it lacked in gripping dialogue, it made up for, and more, in an atmospheric setting which is without peer.

I am heading out to see it again soon, just to confirm what I thought I had witnessed the other night: a once in a generation display of cinematic greatness.

The futures are opening soon. I’m expecting MOAR gains and have a general idea what I’ll be doing next week. My health is still poor, and my head is whirring with a drunken dizziness that only stops when I sleep.

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America, Post Caring

No one cares about the national anthem, unless you live down south — where true patriotism lives. The ironic part about southern patriotism is that they’re loyal to a flag and a nation that laid waste to their people during the civil war.

Psyops had a profound effect on them.

Post President Trump’s public shaming of those NFL players ‘taking the knee’ during the anthem — now everyone is taking the knee. There’s some MLB player who was born inside of a base taking the knee, as well as the entire Pittsburgh Steelers team opting out of the whole business.

I’m sure there’s more — but I really don’t care that much about it.

Let’s craft a new anthem, and hire Hans Zimmer to write it. I favor this score, haunting tunes juxtaposed with a little time bomb ticking action.

Off to run some chores. See you later, gator.

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