Okay, I am done shuffling shit around. You should see me trading. I’m like Bernie Maddoff, minus all the lying and fraud and shit.
I accomplished a variety of things, such as:
Selling the rest of my TNA position.
Taking profits on SRS.
Taking profits on some FAZ bought in the 30’s.
Hedging the remainder of the FAZ position, which is still sizable, with FAS.
Selling some ERY, for a quick trade.
Buying back some of the ERY, that I sold for a quick trade.
Selling out of some losers longs, like BDK.
Adding to dice rolls, like CBL.
Essentially, the short term direction of the market is anyone’s guess. Who knows what kind of bullshit bailout news might print this afternoon, or Sunday evening. The smart thing to do is play it safe, with a bias to the downside, in my opinion.
The retail season will be a woeful one, with retailers set to close stores in droves. It is estimated, following the Christmas season, up to 125,000 store fronts will be closed. Can you imagine the impact that will have on commercial RE? Without a doubt, at some point, SRS is a keeper.
On the long side, you want to be careful here too. By no means are we out of the water and the indices may fuck you hard, towards the end of the day. I don’t know about you, but I am sick and tired of dealing with the daily grind.
It may be that time of year to just shut it down, celebrate a fantastic year, amidst the rubble, and start to enjoy the holiday’s.
UPDATE: I bought 5,000 TBT, just north of $44.
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The Fly is God…I believe is what I’m supposed to say in this position.
You are pretty damn cool Fly, but I got some more fighting to do before Christmas
p.s. Disqus is pretty cool – looking forward to the switch
Fly,
Tim will think you’re a piker closing up shop 🙂 He’ll definitely say something very gay about this act of market treachery and cowardice in the face of the enemy.
Good shit Fly,
I am also taking it easy, and semi-closed the books this year…
Been a very exhausting year…Lately I feel like a zombie.
I should probably do the same Fly, and sit back and count my coin I have banked from being short this year, but I amd looking for those new lows this month. Expecting a big down day today thru Tuesday, but who knows in this crazy market. I believe the way to lpay it is to be quick and nimble and pick your battles much like you have been doing.
Don’t own FAZ and FAS at the same time; they dont work; look at chart of both since they were incepted and BOTH are much lower – asshattery
Cheers!
Seasonality is positive for stocks, if that means anything. It may neutralize the downside bias.
Tim Knight says that you do auto shop stuff.
What time should I bring my car over tomorrow for an oil change?
I think Tim not giving this site even a hyperlink after he mentioned it and bagged is an affront to the fly that shouldn’t go unpunished.
You should tell us what you really think of him , Flymeister.
I never go there but I went today. It’s so freaking boring they ought to name a deadly neurological illness after it. You feel like you may have suddenly contract Lou Gehrig’s disease after being there.
The dudes are just so fucking nice to each and polite that is truly sickening to observe. It’s basically a gay hangout… the anti Ibank coin site.
Fly, check my oil?
Steal all the money and paper trade like Madoff.
Builder leading this one…now if financials could follow suit…
When I went to bed, we were on the verge of going Mad Max, with DevilDog about to become Ayatollah of Rock n’ Rollah.
This morning, it’s just another fucked up day.
Glad I got the last of the V8 interceptors, tho.
Change your oil.
Sure, I’ll change it then leave a fucking pipe bomb in the engine.
TLT hitting support, below that may be precarious for bonds. are we watching a move from bond allocation to commodities/stocks?
so it turns out all that was a non event for the market we gona go gree hmmm….
Sure is a lot of assfuckery going on in the market this morning.
Wow. More deep thoughts from MastersOfTheObvious.com. Where’s Jack Handy?
This Madoff stuff is simply mind numbing. Next thing we know, we’ll wake up one day to find out that THE FLY is a 55 year old unemployed bum posting shit to the internet from his mother’s basement. Just making shit up.
We’re going to finish nicely green today. Can’t you feel it? Even if we finish in the red, we could pretend it’s green … Madoff like.
Nobody gets in to see the Madoff, not nobody, not no how!
Red and green.
Christmasy-like.
goon Says:
Don’t own FAZ and FAS at the same time; they dont work; look at chart of both since they were incepted and BOTH are much lower – asshattery
What happens if you short both FAZ and FAS? I’m sure that too will manage to rip you off, somehow.
This idiot deserves the arsehat of the week. Made offs lawyer had this to say.
Mr. Madoff’s lawyer Dan Horwitz told Bloomberg on Thursday:
“We will fight to get through this unfortunate set of events. He is a person of integrity.”
hahahahhahahahahahahahaha unfortunate set of events? a person of integrity?
Next he’ll be calling it an unfortunate, accidental fraud
This is your UAW President Speaking and not the Raptor.
We believe so much in our auto companies that we are prepared to invest our pension fund to strengthen the capital position.
Ha Ha Ha.
Fooled you. We are getting free tax dollars. We ain’t stupid.
The $50 billion went to his philanthropy.
And whores.
Pipe bombs are a violation of our Homeowners Association Rules. You know that Fly.
GA: shorting both FAZ/FAS or UYG/SKF is free money. unfortunately it’s damn-near impossible to find any available for short, i suspect some hedge fund is already arbitraging that opportunity very well and whenever both come available, they’re snapped up really quickly.
Shut it down Master Fly, this is nonsense.
So what was Jerkoff’s philanthropy cause?
Palm Beach golfers who can’t afford to belong to Trump’s Country Club?
Assholes:
I’m a market time of the first order. I own both FAS and FAZ, in order to nail the trade, just like yesterday’s ERX/ERY.
With 300% power, one needs to be quick.
Our mobile home park doesn’t have a homeowners association. The Fly knows that.
Yea ant.
There’s always the call girl in the background.. The NY Post should be on to that quickly. NYC stories are the best.
You see that asshat Gettlefinger read that Senator’s email during his press conference? What an idiot. You do not do something like that to DC. He has zero trust now.
GM, Chrysler, and the UAW are toast. Ford will pull through.
I think Madoff should be subjected to listening to Larry Kudlow 24/7 all the while being locked up. Seriously, I think I would rather watch “The View” than listen to Kudlow. Anyone else find his voice irritating?
TC,
Foreskin re-attachment surgery. Trump’s Club is restricted.
Yes, the pair trading of the 2X and 3X sounds like a good strategy at least on paper.
But how come both FAX and FAS are both down?
More 2X and 3X bullshit.
It would be better to do a pair trade like short AAPL and long RIMM (or visa versa) when they deviate from their mean.
Kass: Madoff Was Made Up
By Doug Kass
RealMoney Silver Contributor
12/12/2008 9:27 AM EST
URL: http://www.thestreet.com/p/newsanalysis/investing/10452909.html
This blog post originally appeared on RealMoney Silver on Dec. 12 at 8:59 a.m. EST.
While many are suggesting that the failed auto rescue plan is responsible for the dramatic overnight drop in the futures (down by nearly 5%), I believe that the alleged Madoff fraud might be even more responsible for the dire overnight market decline.
If the Madoff story is correct, it is the single biggest financial story of the year. Indeed, it is bigger than Enron or Tyco, bigger than Boesky and far bigger than Bayou.
It attacks at the core of investor confidence, which has already crumbled and remains very fragile.
About three years ago, an investor of mine, who already was an investor with Madoff, came to me and asked my advice as to whether he should add to that investment. I requested and received his monthly brokerage statements. Now, I am very good with math, but after hours of analysis over a weekend, I could not understand how he generated his returns and suggested that he should withdraw his capital. (The investor discarded my advice and decided to add materially to his investment.)
Piecing together information over the last 12 hours from several Madoff investors and acquaintances suggests that the following events might have transpired.
While the criminal complaints filed against Madoff estimated losses at $50 billion, the fraud likely was closer to the amount that was managed by his company at between $17 billion and $25 billion. My friend, Charlie Gasparino, was on CNBC earlier this morning saying that the company employed leverage, but I doubt it was of the magnitude that would cause a $50 billion fraud. That being said, these days, I guess you never know!
It is clear that Madoff’s fraud paralleled Bayou as both firms fabricated investment returns. In the case of Bayou, that firm was apparently aided by an in-house accountant; in the case of Madoff, it was a very small, unknown account based in Monsey, N.Y. This was red flag No 1.
Similar to Bayou, Madoff’s returns were not sensational but they were consistent. My sources indicated that he had only a few monthly losses over an extended period of time, never a down quarter or down year, almost a statistical impossibility. The ability to deliver what appeared to be consistent investment performance attracted a large investor base to Madoff and permitted him to provide little in the way of transparency to investors (individuals and institutions) who should have known better. In a May 2001 MAR/Hedge column, “Madoff Tops Charts; Skeptics Ask How,” Madoff said that he believes he deserves “some credibility as a trader for 40 years…. The strategy is the strategy, and the returns are the returns.” He went on to say that “those who believe there is something more to it and are seeking an answer beyond that are wasting their time.” This was red flag No. 2.
Also similar to Bayou, Madoff’s firm did not appear to charge investment management fees; his compensation was commission-based. In the same MAR/Hedge interview, Madoff said, “We’re perfectly happy making the commissions.” This was red flag No. 3.
In all likelihood, while posting consistent returns, Madoff (again, similar to Bayou) churned his accounts and earned high levels of commissions. At the same time the accounts were being churned and consistent returns were reported, both firms likely lost huge amounts of money in an extremely active trading strategy, with commissions inuring to the firm. I suspect that the losses dramatically increased this year, as his split-strike conversion strategy (similar to a classical buy/write strategy) backfired, providing little downside protection in the bear market of 2008. Madoff also said in the MAR/Hedge interview that this strategy works best in bull markets and that “we’ve really been in a bull market since ’82, so this has been a good period to do this kind of stuff.” Years of phony investment performance had the effect of compounding the alleged fraud over several decades.
Unlike Bayou, however, Madoff self-cleared — this was red flag No. 4. — so the far larger fraud than Bayou was more easily kept secret.
Madoff refused to provide account transparency. This was red flag No. 5. According to several friends of his, if an investor questioned his oblique and undisclosed investment methodology, he threatened to return the funds.
Apparently, Madoff’s minimum investment requirement dropped considerably this year coincident with the market decline. This was red flag No. 6.
The disclosures of the alleged fraud at both Bayou and Madoff were accelerated by redemption requests. Madoff’s firm received about $7 billion in redemption requests. While he was able in the past to cover withdrawals, $7 billion was too large to cover.
Madoff’s investors included captains of industry, corporations (some of which are publicly traded) that used Madoff almost as a high-yielding cash management account, endowments, universities, foundations and, importantly, many high-profile fund of funds.
It appears that at least $15 billion of wealth, much of which was concentrated in Southern Florida and New York City, has gone to money heaven. Real estate has been dealt a fatal blow, both in the luxury residential markets as well as in the office market, where Madoff funds were likely used as debt collateral.
The disclosure of the possible fraud last night suggest to me that anyone on the fence regarding redemptions to the hedge fund industry over the next several months will likely put in their requests for capital withdrawal, as confidence in the system and in investment managers has been irreparably impaired.
Madoff & Co. was also an important presence in market making, raising the specter of counterparty risks. I suspect that the exposure here is minimal as it appears that the market making and investment management businesses operated separately as independent entities. Also, there have been no complaints about settlement problems with Madoff that I am aware of today. I presume that a large brokerage firm will gobble up Madoff’s market making business by the end of the weekend.
It’s a major blow in a market that is already fragile and in which confidence has been materially shattered.
With so many red flags raised, the Madoff fraud is another example of a derelict SEC. What is even more astonishing is that Madoff runs a broker/dealer through which the accounts are actively managed. Indeed, the MAR/Hedge column from seven and half years ago raised a number of obvious questions regarding the steadiness of Madoff’s returns.
And, in the end, it appears that Madoff was made up!
pair trading FAZ/FAS makes sense for what Fly’s doing even though there’s some minor overhead because i suspect it’s not a pure financial strategy, but a psychological one as well. it’s a lot easier to sell off one position than to hold no position and to go heavily into another. functionally it’s the same position at the end of the day, but it’s a lot scarier to make the move otherwise.
might be cheaper to buy deep ITM options both ways, though.
so i herd you liek mudkips Says:
TLT hitting support, below that may be precarious for bonds. are we watching a move from bond allocation to commodities/stocks?
Yes
Anton- Seriously? Trump is a douche. Where is Ass Napkin Mike when you need him.
True story. My son played a golf course (9 hole cow pasture) in the Delta area of Mississippi where the town has no traffic lights and one stop sign. There is a bowl on a table where you put your greens fee and if you are hungry there is another bowl to pay for your food and drink. You just get what you want out of the refrigerator. At the end of the day somebody comes and picks up the money. Wouldn’t work in Palm Beach (or anywhere else in Fl.)
TraderCaddy,
I was joking about Trump’s club. Would doubt you could get away with that shit anymore.
I’ve met him twice, once with his wife, Malaria, or whatever her name is. (Looks like a hostage situation.) It is amazing that anyone has ever “invested” a dime with that asshole.
So Fly,
What your really telling us is to get egregiously long for a Saint Nick rally, correct?
Anton:
What does the linked image mean? Just askin’.
Zen,
Just means I found a contextually funny image related to the movie & character. I change them up from time to time.
Der CBL is schteppink und der Gooze, no?
__________
LOL.
Who are you kidding, fucker?
You’ll swear off this market crack pipe when they de-clutch your cold dead fingers from your Bloomerg roll-ball.
_____
I never go there but I went today. It’s so freaking boring they ought to name a deadly neurological illness after it. You feel like you may have suddenly contract Lou Gehrig’s disease after being there.
To be truthful, that was why I abandoned it. Tim was only fun when he was a bear (always) and I was a bull. When that changed in November of 2007, I found the site not that interesting any more. That and the disquus annoyance (having to log on every friggin time) gave it the “meh” for me. He does do some nice charts though.
The best poster over there is Jana, because at least she’s got some spirit. I think she’s been here a bit, lately.
_______
__________
Glad I got the last of the V8 interceptors, tho.
That’s nothing.
I’ve got a midget and a low IQ gorilla living in the garage that like to go around “stacked” on one another.
That midget is something else with a sprocket wrench, let me tell ya.
_________
BTW–
It’s a little past 12 o’clock (EST)on the 12th of December… you know what that means don’t you?
Merry Half Christmas!
______
Jake,
Master Blaster RUNNNNN BarterTown!
{Bernie climbs up on Paulson’s shoulders, extends middle finger, leaves}
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