Some new shoe is about to drop. I’m not sure if its [[LEH]], [[MER]], [[MS]], [[GS]] or some other broken financial stock. One thing I am certain of is pending shoe droppage. Write it down.
With the markets scaling back down to 12,000, expect the bears to brazenly rip apart stocks, while exclaiming: “we must retest the lows.”
That’s just a catchy phrase. What they really mean: We’re fucked.
A confluence of negative events has reemerged, simultaneously. The FED, once again, are talking hawkish, fearing the grip of runaway inflation. The credit crunch is as bad as ever. The threat of another big broker folding tent looms. Oil and natural gas prices are soaring, as if the last drop of oil has been sold to some fucktard in Beijing. The Asian markets are shattered. And, we have goat crazed prices at the local grocery store, all thanks to a retard currency and “global growth.”
In my opinion, the charade that Lehman put on for Wall Street last quarter was the number one reason why the markets rallied. People thought “the worst was behind us.” We had old men, like Vince Farrell, go on CNBC and declare the “bottom.” Everyone was joyful, with coke on the desk and viagra in their pockets.
Until David Einhorn shook the banana tree at LEH, demanding clarity.
As a result, we got clarity and it isn’t pretty.
Again, in my opinion, LEH was not being exactly honest, with regards to their balance sheet. Because of this, the Armageddon trade is back on the front burner.
How does one play this?
Well, for one, you must have hedges. Personally, I have a great number of short positions, with energy stocks as my hedge.
Despite the inefficiencies of [[SRS]], which HollyWood pointed out, I like it here. If SRS doesn’t float your Chevy, sell short [[IYR]].
Also, there are a variety of banks on the west coast and mid-west worth shooting at. As you know, I am short [[FED]]. Other banks on my doom list include: [[FHN]], [[CORS]], [[DSL]], [[WM]], [[MTB]], [[LAZ]], [[COWN]], [[WTFC]], [[BBT]], [[SNV]], [[WL]], [[CATY]], just to name a few.
Over the next day or two, “The Fly” will pluck another fucked bank and make it a “Reverse Horseman,” if I may be so bold.
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