iBankCoin
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
23,417 Blog Posts

Inflation is the Markets Tourniquet

Say what you want about valuations. Inflation will kill this market faster than a flamboyantly gay goat in a conservative Iranian goat village.

Hey assholes, oil is at $112. Natty is above $10. Price inflation of rice is causing riots in Egypt.

It’s the end of times friend. And there you are buying stocks because of a fucking “technical breakout.”

Sometimes, extraordinary events demand that you get your fucking heads out of the text books and look around.

Is it really that bad?

Answer: Ask Bernanke.

Now, if you believe the greatest credit meltdown in 100 years warrants a modest 5% decline, year to date, you deserve to work for me, tending to my garden and cleaning my patio—instead of managing money in the market.

I do not fear the market going up. I have 100% conviction in my position that I am willing to endure painful short term losses, in return for bountiful long term gains.

Right now, with my money, I like short [[FED]], short [[DSL]], short [[WM]], short [[LEH]], short [[MS]] and short [[MON]]—just for fun.

Oh, and with Cramer mucking up his picks on a daily basis, I am uber confident that [[TSCM]] will trade significantly to the downside.

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43 comments

  1. Juice

    Whats wrong with FMCN?

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  2. mdawsz

    HAHA, funny cuz it’s true, conservative Iranian goat villages are known for their flamboyantly gay goats.

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  3. Juice

    worldwide foot riots … I think thats bullish

    buy coal stocks

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  4. calvino

    Australia trebled its coking coal and doubled its heating coal prices for the year.

    http://www.theaustralian.news.com.au/story/0,25197,23500477-601,00.html

    That’s more good news for the bulls because arch, massey and btu will lift the index all by themselves, far offsetting any margin dollops that Boomer seems to be feeling from rising energy. Boomer stop pretending, you know you don’t need A/C to ride the bull higher.

    Null – crm caught a downgrade today. but still holding up. I would like to see a down 12% followed bya couple of down 5 and 6es. They preannounced some announcement on the fourteenth. I would like to see what kind of bullshit they come up with this time, while the insider sales are piling up.

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  5. Uncle Sam

    What? The world doesn’t want to subsidize the U.S. anymore?

    Selling oil in other currencies?

    That’s not fair?

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  6. CubsRock

    Fly why isn’t your blog listed here:

    http://www.newsflashr.com/feeds/business_blogs.html

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  7. wow

    “It’s the end of times friend. And there you are buying stocks because of a fucking “technical breakout.””

    fucking. funny.

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  8. Dinosaur Trader

    Short Cramer… best pick ever.

    -DT

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  9. Granpa

    Fly, with the numb-nuts on CNBC saying “oil hitting new highs” all day long but XOM is only up a little and DUG only down a little do you think we are at a turning point. At least for a trade?

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  10. patrick

    Interesting read:

    http://bigpicture.typepad.com/comments/2008/04/how-cheap-are-s.html

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  11. Hank Paulson

    Inflation,world wars,cresit crisis, foreclosers, and unemployment…Get Long, right?

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  12. norcal

    The fun is just starting…how about QID and TWM for a nice earnings season run? Tech and small caps should get slammed in the weeks ahead.

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  13. The Fly

    Cubs:

    Fuck that website.

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  14. gappingandyapping
    gappingandyapping

    Thanks for agreeing with me Fly on the oil kills the market. Atleast someone does.

    By the way Orbitz.com is completely down.

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  15. kurt

    i love this blog

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  16. JakeGint

    Man, now I’m worried about Lurker.

    Maybe he worked at Goldman??

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  17. nullpointer

    ping http://www.orbitz.com
    Ping request could not find host http://www.orbitz.com. Please check the name and try again.

    short OWW

    if they cant manage their damn DNS, how well do you think they manage the “hard” stuff?

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  18. this blog

    kurt, you’re a great guy, but I need a little space… let’s just be friends?

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  19. Sneaky Bear

    Shh! Uncle Ben is still sleeping! Don’t take the Dow down more than 100 points, or he’ll wake up and drop a bailout bomb!

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  20. Sia

    What about short COF.

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  21. gappingandyapping
    gappingandyapping

    orbitz.com (198.151.61.100) returns pings but port 80 is done for. I just contacted American Airlines for a flight and they have mandatory overtime going on.

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  22. PoorOkie

    DCR is grinding my nuts into dust. Unless oil is going to $120 this week, the selloff is way fucking overdone.

    How in the fuck did we get that huge draw on crude? Who in the fuck has money to buy gas? Maybe it was people moving out of their recently foreclosed home to thier local trailer park? Something fishy is going on with crude supplies.

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  23. Stocks Are For Asshats
    Stocks Are For Asshats

    Fuck this shit. I’m resigning. Anybody need a gardner or patio cleaner?

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  24. Granpa

    Okie, maybe it’s just another fabrication(lie). DUG doesn’t want to go down and XOM doesn’t want to do up. Somethings off.

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  25. JakeGint

    Mandatory squirrely gold bug reading.

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  26. gappingandyapping
    gappingandyapping

    PoorOkie: I am hearing people that there was a huge seller in DCR and that it decoupled. Just the talk around here.

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  27. gappingandyapping
    gappingandyapping

    We’re making updates and improvements to the site.
    We’ll be up and running again at 15:00 CT.
    Sorry for any inconvenience.

    Orbitz.com

    Who the fuck makes updates in the middle of the day. LIARS!

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  28. nullpointer

    gapping-

    orbitz back up, go look-see

    “maintenance” LOL

    they are so fucked

    very unpleasant meeting tomorrow morning

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  29. Aris

    all the yahoo idiots are buying/propping up DUG because of the spike. the ones trying to short the USO are particularly hilarious.

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  30. SatanicChihuahua
    SatanicChihuahua

    Okie, the last comment by someone named Anonymous in Fly’s post titled “Bulls Boiled Slowly” explains what’s happening with DCR. Assuming what Annonymous wrote is true, you better read it.

    Wall Street created another structured instrument that fucks over the holder.

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  31. PoorOkie

    gapping…thanks for the info on DCR. It’s traded about 20x normal volume today so I guess it was a really big seller. I think I’ll try to ride it for a while and see if oil comes back in a little before summer.

    Update: thanks Chihuahua, that’s one scary fucking article about DCR. I just ate the loss and will move on. Just another example of how I lose, even when I appear to be winning!

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  32. Margin Call

    Solid industrials getting clobbered (UTX). Shitty banks comparatively unchanged (WM, C). I love it!

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  33. Dr. Frankenstein
    Dr. Frankenstein

    You know, Flyyyyyyy.

    Ze “tourniquet” — eet stoops der bleeding, jarhol?

    Purrhappzz, you vish to uze a different zin-o-nim?

    Zimile?

    Metavor?

    (Vat is der verd I yem lookink for heah?)

    Vat is der verd for de “bleeding out” in der English zpeak?

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  34. Da Bears

    Fly, I am definitely bearish on equities but i am beginning to think that the mkt doesnt care about earnings. we’ve had a couple bad reports from AA and UPS. UPS results are prob one of the best economic indicators, yet the mkt is only down 40 pts and cant hold on to losses. there is a lot of bad news out there that the mkt seems to brush off. what will it take?

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  35. Frankenstein

    Raaaaahhhhhh!

    Frankenstein SHORT FED!

    Kill!

    Crush!

    De-stroy!

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  36. The Fly

    No Frankenstein. The analogy stands.

    The inflation tourniquet is stopping the market from bleeding the bears and delivering blood to the system.

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  37. ottnott

    PoorOkie: from links posted in earlier comments, I gather that this is what is going on with DCR:

    –DCR is coupled with UCR. They share a trust fund, the portion attributed to each unit depending on movements in the price of oil
    –For reasons I didn’t absorb well enough to explain simply, the coupling, combined with the much greater popularity of UCR, created a situation where UCR was trading a moderate % below NAV, while DCR was trading a high % above NAV
    –If oil trades above $112 for 4 consecutive days (I beleive that was the number), the units will be dissolved and the trust assets distributed.
    –Dissolution means that the high DCR premium goes to 0%.

    Any others read things differently?

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  38. CubsRock

    Closed on the lows of the day in Homies and Financials.

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  39. Sneaky Bear

    Great job guys, take ‘er down nice and slow. Just a few more days like this and Uncle Ben will never know what hit him, the bearded fool. Good work in FED, CMG, and MGM today. I will buy lots of honey with my take today. I fucking love honey.

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  40. lol

    I agree that inflation is the problem, but the thing about it being “down 5%” isn’t true. sure, down 5% in “dollars”… I don’t care what inflation numbers we’re getting, it’s simply not reality, and that 3-4% is not the current and future number.
    Inlfation is not “steady” at 3% either… ever heard of compound interest?
    Anyways, if you measure the market in terms of purchasing power, it’s already down a lot more than 5% this year, and we’ve been in a purchasing power bear market since 2000.

    The inflation is just a way of hiding it behind a mask. Now in the long run, inflation is going to hurt the economy a lot more, and it’s going to have to catch up with everything, and deflation will happen, and people will get a chance to see the real damage, or we’ll hyperinflate the dollar and then quick substitute it for another currancy (or a microchip for you conspiracy theorists (IBM is supposedly a maker of a chip that may do that)… or become Zimbabway… who wants to be a millionaire? we all will be… except the price of a cheeseburger will cost 3 million.

    Hyperinflation play is also UDN, DGP, SLV, commodities and natural resources, etc.

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  41. ottnott

    Cubs: CalculatedRisk pointed out a possible reason for that weakness. The Senate was going to allow builders to carry losses back 4 years, offsetting some of the large gains in those years and generating a sweet tax refund. The House version of the relevant bill left that benefit out.

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  42. Big Mike

    FLY,

    You have an inflationary biases, yet your shorting Ags?
    What the fuck? Am I missing something here?

    About DCR…man, you guys need to do your fucking HW before investing… This ETF does not USE FRONT CONTRACTS as shown on CNBC, instead they use TREASURIES TO SIMULATE A VARIETY OF FRONT AND BACKDATED CONTRACTS; this is why there is a disparity between front dated crude relative to DCR. Call’em if you like.

    The best tool for speculative purpose is USO…if you want more bang for the buck, use options.

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