Gartman: Oil is Heading Lower Again

I love how frackers couldn’t make any money with WTI south of $75 last year. But this year, those crafty, devilish, bastards are able to bank extreme amounts of coin at $45 WTI. Who’s believing the horseshit coming out of mouthpieces like Gartman and others who try to peddle this lie? I have eyes and can see the quarterly earnings reports coming out RIFE with negative free cash flow statements.

At any rate, here at iBankCoin, we continue to document and archive the missives of a certain D. Gartman, for posterities sake.

It’s worth noting, old Garty is looking slimmer these days. Perhaps he dropped the pork belly and grits diet for a cobbed salad twice per week, in between servings of chicken fried steak and hamhocks?

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Former secret service agent, Dan Bongino, recently made waves after dismantling DON LEMON on live television. Now he’s making waves on the internet after some shrill reporter from Politico, which is a democratic propaganda outfit, tried to fuck with him in a phone conversation.

Do the catamites at Politico actually think this makes them look good?

Bongino doesn’t fit the narrative. Therefore, he must be discredited and dismantled.

On we go.

As the rest of Wall Street saunters around in a low volatility drift higher, the oil markets are in turmoil. Today’s 3.4% drop wiped out all of last week’s again. Over the past two weeks, crude is still higher by 8%. However, the health of the equities are far less inspiring.

Over the past two weeks, according to Exodus (free trials end today), both the drillers and independent oil producers have yielded at negative 1% return. Overlay that on top of the 8% spike in crude, and you can clearly determine that equity investors aren’t buying whatever the fuck the men in the oil pits are selling.

Bear in mind, a wall of debt is set to come due in 2017. Should crude continue to languish around these levels, there will be pain felt in the sector.

All that said, the NASDAQ closed up 6. New records of gluttonous bounty is to be had. Fuck all of the sellers and their songs of misery. Get on the death train towards a hedonistic end, which is entirely worthwhile and joyful as long as the engines are running hot with Federal Reserve fuel.

Over the weekend a delightful research paper was released by David Reifschneider, who is the deputy director of the division of research and statistics at the Board of Governors of the Federal Reserve System. In it, he cites the low levels of interest rates and indulged himself to imagine what an economic downturn might look like in the post QE era.

The results were less than awe-inspiring.

The degree of economic downturn used in the study were the base case, standard, run of the mill scenario: negative shockwaves reverberating throughout America–sending unemployment up by a mere 5%.

“Simulations of the FRB/US model of a severe recession suggest that large-scale asset purchases and forward guidance about the future path of the federal funds rate should be able to provide enough additional accommodation to fully compensate for a more limited to cut short-term interest rates in most, but probably not all, circumstances,” Reifschneider writes.

Moreover, Reifschneider factored in a psychotic $4 trillion QE programme, plopped atop the current $4.5t Fed balance sheet and could only jimmy rig the unemployment rate by 0.2%. And this is assuming the Fed funds rates would be at 2-3%, a far cry from the current rates of 0.5%.

“In the simulation, QE and forward guidance take 10 year yields down 225 basis points to 300 basis points depending on the starting point for Fed funds and whether you do $2 trillion or $4 trillion for QE,” he says. “But that is not going to work very well if, by design, Fed funds and 10 year yields can’t go below zero. And if expected rates are already low then forward guidance does not have much room” to stimulate the economy. In effect, Fed officials would have to “keep a straight face while saying they we will keep rates at zero … forever.”

In other words, QE for life–like I’ve been saying. And, even with QE for life, we’re still doomed. However, I am sure stock prices will do just fine under these conditions, with the Fed intervening with an enormous $4t QE warchest.

Rigged.

Pulitzer prize winner, Michael Goodwin, weighs in on the media savagery of Donald Trump and the seamless cooperation with the H. Clinton campaign. In his article, Goodwin says ‘indeed, no foreign enemy, no terror group, no native criminal gang suffers the daily beating that Trump does. The mad mullahs of Iran, who call America the Great Satan and vow to wipe Israel off the map, are treated gently by comparison.’

He elaborates his piece in a Fox Business interview, featured below.

“There’s nothing independent about what they’re doing.”

Last week’s short squeeze in crude was something to behold. Assholes running around, thinking they’re geniuses because the middled east was gonna cut or freeze oil production. Meanwhile, back at the ranch, Joe Monkeywrench was digging as fast and furious as humanly possible to retail that black gold out for sub $50 WTI. In the real world that isn’t ruled by fiction, current oil prices are a deleterious drag–a real Debbie Downer.

European markets were down today, but America figured out the codes to the rubik’s cube and has feverishly twisted and turned itself into a flat market–biased toward the downside. I only say these blasphemous words because more than 57% of stocks are in fact lower. Also, bonds are rallying, evident and with vigor in the share price pin action of my beloved TLT.

WTI and copper are both headed towards hell, taking with it Satan’s son, FCX. At the present, I am short FCX and wholly wish for the downfall of the company. I’d like to see their operations shut down and their people lost at sea or in a war.

Moving on. There are some winners today. Perhaps you’d like to purchase some utilities at record valuations or some REITs? Go ahead, I fucking dare you.

On the downside are industrial stocks, stuff that makes global trade profitable and/or sectors that work against the interests of the most hated demographic in world history: middled class Americans.

People keep saying the Fed needs to hike rates, in order to jack up the carrying costs for America’s $20t debt load and to somehow help out the old fucker in search of yield. But if the Fed did that, the world would literally implode, taking us into a 5th dimension, into a land ruled by gay giraffe’s driving iced cream trucks and flying devils shitting on people’s dinner plates. You get the picture.

QE for life, because they fucked it up to the point of no return.

Two thousand and sixteen has been a renaissance for semiconductor companies. Following years of underperformance and moribund stock action, the semis have come alive in 2016–all to do with easy compares, lower inventories and decent end user demand for electronics.

Micron has been the crown jewel of the rally, with shares rising more than 50% over the past 3 months.

Needham is out shitting on their parade path this morning, citing bloated inventories and a stupid as sin Digitimes article that wrongly praised Micron last week. Needham is intent on thrashing the shares of MU about the side of their boat this morning and there is nothing the illiterates from Digitimes can do about it.

Needham on Firday noted MU was up 3% on a Digitimes Article citing a “DRAM production slip-up has forced a Korea-based vendor to scrap 30,000-50,000 wafers from its 21nm node”. Based on their conversations with their supply chain contacts, they believe this claim is unsubstantiated. While it’s true that the DRAM pricing environment has improved, mainly driven by better PC DRAM pricing, they believe MU is sitting on a lot of excess inventory on its books and is having difficulty selling it, which could pressure gross margins. Moreover, as they discussed during their recent Asia trip, MU is still having qualification issues on its mobile DRAM 20nm product and is behind the competition. On the NAND side, MU has to cost-effectively transition to 3D NAND because it does not have a 14nm 2D NAND alternative, and here they remain cautious on that transition; Underperform.

Lots of hate in that research note. Maybe they need to chill for a minute and smoke some H to settle down.

There’s always a flat market somewhere. I’m here to find it just for you.

Let’s be honest with one another on this glorious Monday morning, ahead of what will likely be another record setting week for this motherfucker of a whore market. I don’t like stocks anymore. Having established that as my bias, I’d like to point out that copper has been flat since March, in spite of the fact that markets have been ripping chest hairs off to the upside.

Listen to me.

Everything you pretend to know about markets is a fiction. Isn’t growth supposed to emanate out of China? Well then, don’t they need an endless supply of copper to build out their ghost cities? I know and I get it. Everything is one giant lovely facade.

But in between the fiction, every once in awhile, peers reality. At some point, people will begin to wonder why copper isn’t drifting higher with crude oil and how come FCX (I am short) is failing to participate in this great vengeful experiment in macro economics. When confidence erodes, so will stock prices.

Dr. Copper isn’t sleeping. He’s fucking dead.

Wikileaks just published a tweet, revealing that someone had been caught and escaped after scaling the walls of the Ecuadorian embassy in London, where founder Julian Assange is holed up. I am sure that if Hillary Clinton wasn’t deathly ill, she’d scale the fucking walls and murder Assange herself.

Hillary Clinton strategist, Bob Beckel, has openly called for the murder of Assange–calling him a traitor and guilty of treason. What the drunkard Beckel doesn’t realize is American laws don’t apply to Assange, mainly because he’s not an American.

Freedom.