The Good, The Bad and The Ugly

Okay, let’s recap recent events, starting with the good.

German, Finnish, Austrian and UK yields are spiking, as Spanish and Italian yields are flat to down. Scared money has been hiding in short dated “safe haven” sovereign debt. It needs to come out, in order to get the juices flowing again. The fact that German 2yr yields are +17% today is decidedly positive. The euro has stopped going lower, despite all of the negative news flow. And the dollar has started to soften, always a “risk-on” signal. Oil has been getting the stuffing kicked out of it, definitely a positive for a number of industries saddled with onerous input costs–due to expensive crude. Borrowing costs have plunged, making the Fed’s “Operation Twist” policy a massive success. Lastly and most importantly, despite the endless stream of bearish news and sentiment displayed by the media, stocks have been trading sideways for a few weeks now, possibly a sign of consolidation.

The bad.

On a whole, the global economy is slowing, including the fetus eating Chinese. The whole BRIC theme is a fucking joke. Brazil’s economy is in freefall mode, putting a big ol’ capital B in the BRIC being tossed through the global growth facade. Syria is in full-fledged civil war mode and our business with Iran is far from over. Free markets don’t exist anymore. We’re all on bath salts, zombies fueled by the generosity of desperate policy makers. The fact that we depend on the fucking Germans to do right by its fellow EU members is comedically tragic.

The Ugly.

The world hinges on Greek democracy, scheduled to be displayed this weekend. Ironically, the inventors of democracy might destroy their country, by exercising such rights. Should Greece unravel, it will bode poorly for other weak euro countries, possibly leading to the collapse of 17 nations–simultaneously. The Germans have no choice but to back everything and that’s not exactly ideal for their balance sheets. This all has the feel of “end game”, a story that ends with the bad guys winning. The worst of all is our dependence on policy makers and central banks to print money, in order to buoy the markets. Although I am looking for QE3, this is not a healthy investor environment, depending on those fucking assholes to reinflate our busted bubbles.

Gone are the days of normal economic cycles, which makes this market exceedingly hard to predict.

Enter the meat-grinder.

Yesterday the bears paraded through the streets of Wall, clad in burlap hoodies, florescent pink pants, made from velcro– topped off with plastic helmets. They were a vicious group, making bold statements in stentorian tones, atop large hills and grassy knolls.

Today, the mood changed, despite Spain, despite Greece, and they were muted.

I do not declare victory, for it’s just one singular trading day. After all, I was down a staggering 4% yesterday and I am plus 3% today, for a net loss of 1% since Friday. Over the past 7 days, I am up a petty 11% (I am certain the majority of you are up more), clearly a man who should be bet against and in size. Even though I haven’t endured a down year since 2001, successfully navigated through all sorts of disastrous markets, and because I am only +8% for the year, my opinions are merely happenstance, a nuisance of sorts who should be relegated to the outer reaches of the interwebs–undeserving of grandiose balls and midnight dinner parties.

I am just a simple man, traveling through time, in machines built in an era not from now, inking my superfluous thoughts for others to contemplate and discard as “comedic folly.” There will be down days, but with a little luck and generosity from the Gods, most will be up. I err by letting the opinions of others mean anything; but I too am victim to the emotion of anger. I get mad at a drop of a hat, fixed on doing bodily harm to numerous people across the globe. I’ve even went so far as to build a Space Orbital Cannon (OSC), now in phase 3 development, strictly to be used for offensive means. What can I say? Sometimes I am human.

In short, this is not a victory lap, for the run has only begun. Instead, it is a reminder of how grande your idiocy is, embarrassing and stifling on many levels. Please refrain from offering any form of financial advice in the future, as it might hurt someone who intently needs money.

Thank you and farewell.

NOTE: Like the work of art above, the music below doesn’t get any better. Only top shelf classics at iBankCoin.

Mortgages and refis are picking up volume, especially refis. Under the radar, a slew of regional banks have been skyrocketing, thanks to the refi boom. My preference is to find names trading under a price to book ratio of 1. But for the sake of showing you how “awesome and amazing” the mortgage market is right now, I will post a full list of winners over the past 3 months.

Here is the poster child of the refi bonanza, Elli Mae.

And here are the winners, as the market has been getting punched in its face. They don’t give a shit, honey badger style.

Back in 2002, I only bought regional banks and preferred stocks. The market was shit, but the refi business was booming–thanks to Greenspan. Don’t fall into the trap thinking the refi market can’t boom as the economy shrinks. It’s happened before and it’s happening now.

The news isn’t relevant now because it’s all rumor milling. The Fed is either going to initiate QE 3 or not. The gentlemen at Goldman, in a research note published today, put QE3 at a 75% probability. I tend to agree with them, but nothing is guaranteed.

Ideally, the central banksters should stop reflating and let the market clear. But to trade based upon that thesis is pure fantasy. Moreover, if you are relying upon governments to do nothing to make your shorts work, you are not qualified to invest on behalf of other people or yourself. Don’t you know they’re embedded? There is no turning back, once you’ve invested trillions in an ideology.

I’ve been doing this shit a long time, okay. Back in late 2007, I remember looking at massive losses in my shorts. I expected a banking collapse and positioned to benefit from such an event. Stubbornly, the market kept marching higher in late 2007, much to my bewilderment and chagrin. But I remained as cool as a cucumber, knowing my position was logical and most likely to be a winner. As soon as 2008 came, stocks dove, full retard style, turning my losses into monster wins. During that period, 75% of my trades were short sales, based upon free markets having to clear unprecedented losses.

Do you know why I am not short now and why it’s different today?

Answer: markets are not free.

After a good night’s rest (3 hours) and a hot cup of earl gray tea (honey & milk), “The Fly” is renewed, ready to accept fresh battle axes to the cranium–if need be.

I’ve forgotten yesterday’s nightmare and now fix my attention on several singular items. For example, I have to move inside of 3 weeks, yet haven’t packed a single box yet. Also, I’ve yet to secure movers. Back in the old days, my friends and I would get inebriated and move the stuff ourselves. However, those days are over, thanks to my desire to avoid hernia ruptures. On top of that, Mrs. Fly has about 2 months worth of renovations scheduled for the new house, which all but assures my life to be hell for the duration of the summer. So, oddly enough, my life isn’t going to get any better–than right now– for several months down the road. My losses are superfluous and mostly exaggerated obstacles.

I am teeming with gratitude to still have 5% gains for the year. It could be a lot worse, as you know.

There is too much noise on the internet. I find it to be a place best suited for trading gorillas, addled with personality flaws, interested in meaningless schoolyard antics–child’s play. I am going to sloooow things down a bit, focus more on longer term market calls, less on the caprices of day traders and market vagabonds. It is nearly impossible to swing trade these days, some do it with proficiency. Once upon a time, I specialized in short term trades, targeting the fastest and craziest stocks that were traded, until I blew myself up in a most horrendous stock market accident (no large marge).

Trading ahead of the Greek election is risky. There is always the chance the elections can produce a positive outcome, so it’s hard to remain bearish on the catalyst. After that is the Fed meeting, something that is sure to keep everyone on edge. After that, I’m afraid the market will be on its own, not exactly a desirable trading environment. The big move higher, if it’s going to happen at all, must occur within the the next three weeks. That’s what I am positioned for.

Days like this bring out the haters, the dogs who like to shit on the rug and lick their ass in public. We’ve banned over 15 of you clowns today, some long time readers. I never needed you in the first place. These clowns failed to mention the fact that I savaged you shorts last week, gaining 12%. All that matters is the past few hours. Fuck a dead horse.

Let me tell you something: I have the memory of an elephant and heart of a giraffe. You’re a big zero, only mildly relevant on Twitter, a total joke. Local yocal. You’ve been banned you moron, yet you still post messages for my spam file. Serious, don’t you know no one reads that shit? Spam folders don’t get read, jackass.

I hope you are pleased with today’s tape, fully leveraged short in some retarded ETF. Because when this bitch turns around, and it will!, I am going to fucking torture you. I am building my list of enemies and will cut your ugly heads off before the summer is over.

Yeah, I have anger issues, so fuck you.

UPDATE: What happens when I am banned?

You not only lose access to commenting on the site, but access to the site itself. You WILL NOT be permitted to step foot into these halls again. I promise you that. THIS IS WHAT THE AFTER-LIFE LOOKS LIKE (MEET GREG SOLOMON). Wait 5 seconds for redirect.

I’ve been unusually calm during this nutzo market, holding positions as they get flayed. I have three stocks down more than 7% today, on no news, based upon nothing. Coal stocks, as a whole, are going to zero, yet gold is going up.

Just 30 minutes ago, I was down 1% for the day. I am now down 3% and heading lower.

Everyone is pessimistic, as there is little reason to believe in anything but negativity. I’ve never seen so many one sided opinions, people calling for massive declines, and everyone being right at the same time. Everyone is a pro; and calling for lower prices seems to be a very popular meme these days. Usually the herd is wrong. However, these days, betting against the market has been like shooting fish in a barrel.

Looking ahead, I doubt there will be any buyers in Asia tonight. First thing tomorrow, Europe is going to get their meat chopped off. There is little reason to be long, post anti-climatic bailout, ahead of the Greek elections. You might see some short covering on Friday and depending on the outcome of the elections, a fierce run next Monday. After that, we have the Fed to look forward to. Should things continue to deteriorate, rest assured, QE3 will be on the table.

I was only looking for one great trade before the summer began, in order to kiss the market goodbye until Fall. I did recapture 12% last week and put myself firmly in the green again. However, with today’s -3% and somber outlook, I risk giving back much of last week’s nirvana, over the next few days.

I don’t lose like this. My macro-plays are rarely wrong; therefore, despite what the Twitter mood ring says, I am holding out for something better.

Apple just announced they will further integrate YELP and OPEN into the Apple ecosystem, thereby boosting the shares of both companies. Set aside your bias for a moment and acknowledge the fact that YELP is more of an acquisition target now than ever before. Not only do they have prime internet real estate; but now they have Apple real estate.

How many companies can say that?

The market sucks, yadda, yadda, yadda. I know today’s reversal is painful and many of my stocks are hitting the dirt. But there are some interesting companies out there worth exploring, namely YELP. It’s not just a website, but a verb (no google). Aside from the today’s pin action, having close ties with Apple means higher revenues and earnings.

As you know or not, YELP represents about 30% of my assets, a figure not seen since the FTK days. It’s been one fuck of a roller coaster owning this stock. But at the end of the day, like most large positions of mine, it will fucking work.

Let the Gods bear witness to my proclamation and endorse it with bolts of lightening to the faces of my enemies: it will fucking work.

NOTE: I am now down 1.1% (child’s play) for the day.

Truly, I enjoy throwing people down elevator shafts and knocking mustaches off the ugly. Yesterday’s news of free money made me ebullient with ravenous barbarity. I envisioned a market place littered with the corpses of overzealous shorts, strewn across the globe in size order. Sadly, this did not come to fruition.

In Spain, the IBEX was up 5.9% on open, but closed down 0.65%, dreadfully anti-climatic. As a whole, Europe tanked into their respective closes, leaving us alone in the wilderness with ferocious bears, keen on eating the flesh of the living.

Despite what my position is, as steward of iBC, you can rely upon me to give you an honest assessment and disseminate news, bullish or bearish, in both a timely and honorable fashion. Although it chagrins me to lose money on a day I thought might lead to outright celebration at The Offices del Fly, it is what it is. At this moment in time, I am quieted by the fiends outside my gates. Basic material stocks are being dismantled, partly thanks to the Goldman downgrade of AKS.

Have a look.

My only silver lining is APPL, up on a relatively abysmal day.

I am down 2.3% for the day, as you read this, up about 7% for the year aka “better than most.” In sterling fashion, I recaptured 12% of my AUM last week alone, making today’s decline very acceptable and almost par for the course.

While the vagabonds and the weavers of finance figure out the next move in a seemingly endless game of death-match chess, “The Fly” will wait for his destiny to unravel, live, for all the world to see.

http://www.youtube.com/watch?v=iEFbuXuShOE

I want to address something that’s been annoying me to no end. What the fuck is wrong with all of you fuckers, especially on Twitter, who want nothing more than complete failure in the markets? Doesn’t it get tiring?

We’re all pessimists, ultimately. But the one sided nature of sentiment seems a bit overdone, to say the least. I get the fact that we all talk our book. If I was short, I’d be rooting for fires and famine too. The only difference is I’d take profits on my shorts and, eventually, look to buy something. Some of you motherfuckers NEVER, EVER buy stocks. It’s hilarious, actually.

Look at today’s rally fizzle. According to market gawkers, today is tragic. This is awfully negative, post Spanish bailout. After all, futures were up 1.5% last night and this was supposed to be the day when all shorts got their dicks cut off, no?

Not really.

Everyone needs to chill the fuck out and cease looking for “the D-day” of stocks, because it isn’t coming. I am not stupid. I see the negative headlines and understand the fact that global growth isn’t so rosy anymore. Moreover, last I checked, I haven’t dedicated my life to defend the honor of bulls. I am just a space alien magician looking to pull another rabbit out of his ass. If the market drops today and I lose money, big deal. I will not enjoy it; but I will live.

Here’s my bottom line: I am fixed in the belief that we are long overdue a rally. Whether it happens today, tomorrow, or next week is immaterial to me, since I will not sell anything. My largest position just exploded by 40% last week; do you really think I am worried about this shit? Come on.

Go eat a sandwich.