Game-plan for Tomorrow: Do the Opposite

The Costanza trade is on. Details will be shared in Exodus and Exodus only. Shitheads who troll on here will receive what they deserve, the scraps from a hearty meal already ingested. This is not a punishment, but a mercy — since you do not have the mental capacity to deliver successful trades into your bullshit brokerage accounts because you’re genetically inferior and do best on the sidelines.

I repeat, this is not a drill. This is a Costanza trade alert.

…while the very best performers got poleaxed. Try to wrap your brains around this one.

Sorting for stocks down 10% or more YTD — min caps of $1b, produced intra day returns of +2.2%

Stocks +50% or more were down more than 1.1%.

But wait, it gets worse.

My Bubble Basket inside Exodus was down 3.6% and SAAS stocks are getting dropped into murderholes everywhere I look. Let’s put things into perspective. The valuations for the best stocks are completely dislocated from reality.

What to do now?

Hedge a little and raise lots of cash and try to follow what’s working now. This shift in money flow might last a few days, or maybe even a few weeks.

NOTE: I booked the gains on MNK and JCP today. JCP netted me over 21%.

ROFL.

I’m not even gonna say anything, but just let this sit here and marinate.

The warnings about potential debt hazards come as the total federal debt outstanding has surged to $22.5 trillion, or about 106% of GDP. Excluding intragovernmental obligations, debt held by the public is $16.7 trillion, or 78% of GDP.

That latter total, considered to be more relevant as an economic burden, is likely to rise to 105% by 2028, according to Congressional Budget Office projections. However, the CBO notes that the numbers are subject to revision depending on how government policies play out.

Advocates for fiscal reform argue that the debt impact has indeed reached the point where action is necessary.

“Globally, we have become over-reliant on borrowing as a solution for everything. Political excuses abound for why it doesn’t matter, which just clearly isn’t the case,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan committee of legislators, business leaders and economists that counts former Federal Reserve chairs Paul Volcker and Janet Yellen among its members.

“We are quickly approaching a situation where we have dug ourselves a debt hole which is doing to have profoundly negative effects on the economy for probably decades going forward,” MacGuineas added.

In its calculations, AB Bernstein pulls in debt from a variety of sources and compares it to GDP as follows:

100% of GDP using federal, state and local government debt combined.
150% for households and firms
450% for financial debt, which carries “conceptual issues and risks,” namely that debt held by financial firms often represents potential in a worst-case scenario involving various derivative instruments that can carry high notional levels that are unlikely ever to be realized.
27% in trusts for social insurance programs.
484%, which values all the promises from current social insurance programs.
633%, which tallies up an “infinite horizon” of obligations for social programs, rather than just the traditional 75 years used in computations.
Timing is everything

That total gets the debt load around the 2,000% mark, though Carlsson-Szlezak points out that different debt carries different risks.

“A default on U.S. treasury bonds would be catastrophic to the global economy – whereas changes in policy (while painful for those whose future benefits were diminished) would barely register on the economic horizon,” he wrote.

Impacts on individual parts of the economy would vary.

Moody’s Investors Service recently warned that an already growing number of junk-rated companies could “swell dramatically” in the next downturn, “substantially increasing default risk.”

“In the next credit cycle downturn, then, the generally lower credit quality of today’s speculative-grade population means that the default count could exceed the Great Recession peak of 14% of all rated issuers,” Christina Padgett, a Moody’s senior vice president, said in a statement.

Currently, though, credit default rates remain low as economic conditions prove favorable.

Similarly, on a macro level recession fears have proven unwarranted so far as growth continues albeit at a slower pace than in 2018. McGuineas of the CRFB said that now is the time then, for the country to start doing something about the debt situation.

“First, you start having politicians level with voters instead of promising freebies. Second, you recognize that the time to do that is when your economy is strong,” she said. “When people were arguing for more borrowing they should have been doing the reverse. We’re still not in recession. It’s time to put in long-term strategies.”

I can’t recall seeing an IPO rollout disaster like this ever. Just two weeks ago, We Work was fixing to destroying after market band wagon faggots with an egregiously overvalued IPO. For once, it was REJECTED by investment banks, unlike other high priced IPOs that came to market in the past to annihilate retail Joes. IPOs like ETSY, FB, SNAP, ZNGA, FEYE and SHAK, and many many more, have all but destroyed confidence in the IPO process in terms of buying them after they come public. We all now know to make money in new issues requires a holding period of 2-3 years.

Not We Work. Those fuckers pissed someone the fuck off and there valuation has gotten ravaged, from $48 billion to a reported $20 billion. Think about it.

Via Business Insider

WeWork could slash the valuation it seeks as a public company to below $20 billion, or even postpone its IPO, according to the Wall Street Journal.

The proposed cut comes days after the Journal reported the shared office-space company was considering an IPO at about $20 billion – already less than half of the $47 billion private valuation it secured earlier this year.

WeWork has faced growing skepticism about its path to profitability and CEO Adam Neumann.

The net result of this debacle is high valuation stocks in the public market are getting lit up, as people rethink the valuation matrix that should be assigned to money losing lotto tickets. As such, SAAS stocks are down nearly 3%.

Is this fucking retarded?

Yes.

Will it continue?

Probably, since most high beta stock holders are weak little faggots.

I sold my gold stocks last week before the decline. Do not come here to show me the price of your miner, pal. If you’re not on the inside, then you’re out.

Do yourselves a favor and close your brokerage accounts and play with your kids.

What did I do today?

Oh, I don’t know. How about BOOK EXTREME PROFITS.

I sold DOCU on an overnight gambit +6.4% and JCP +21.4%. You know what that is on annualized basis? That shit is 1110,,0000000000%. That’s what that is, pallllllll.

Aside from that, markets look like shit. SAAS is getting lit up by 3% and no one knows what the fuck is going on. Miners down, but gold is flat. Value down with growth, yet semis up. If you’re not careful running around here, you’re gonna step on a shovel and it’s gonna smack you right in the face.

Hopefully today I can pick up my car from the shoppe. It has only been 3 weeks. No big deal. It was ready last week and then a water tube busted and the hillbillies working on it had to order a part from NJ, ironically.

Trade wars are fun and easy to win.

Among its major trade partners, China’s August exports to the United States fell 16% year-on-year, slowing sharply from a decline of 6.5% in July. Imports from America slumped 22.4%.

Many analysts expect export growth to slow further in coming months, as evidenced by worsening export orders in both official and private factory surveys. More U.S. tariff measures will take effect on Oct. 1 and Dec. 15.

“China-U.S. trade friction has led to a sharp decline in China’s exports to the United States,” said Steven Zhang, chief economist and head of research at Morgan Stanley Huaxin Securities.

Nasdaq futures are +15. No one give a shit.

Stocks can have valuation blowouts. Art can have valuation blowouts. Wine can have valuation blowouts. Bonds can never have a valuation blowout — because the yields investors are willing to secure for lending money to government is relative. It is relative versus the prevailing yields of the day.

For example, does America have a ‘bond bubble’ now, with the 10yr at 1.56%? Arguably, we’ve been in a terrific bull market for bonds for more than a decade. To suggest it’s a bubble would imply American bonds are disconnected from reality, or some sort of benchmark.

What can we compare it to?

How about other western nations?

Sure, let’s do that shit.

Austria -0.36%
Belgium -0.29%
Bulgaria 0.42%
Croatia 0.6%
Czech 1.19%
Denmark -0.61%
France -0.34%
Germany -0.63%
Ireland -0.06%
Italy 0.87%
Switzerland -0.91%

Relative to Europe, are American bonds inexpensive or cheap? I’d argue the latter.

Is the economy booming and in the position to send rates higher?

Positively not.

Is everyone in the bond market wrong and could the entire multi trillion dollar complex be in a bubble?

Why fucking bother thinking about that sort of horseshit. It’s a naive and narcissistic position to believe you know more than the market, especially a market that is deeply rooted in heavy analytical research.

We are not in the bond bubble. However, that does not mean bonds cannot ebb and flow from present levels, which demands that you pay close attention to price action and take action if your cost basis gets too far away from prevailing prices.

My bias is for bonds to trade appreciably higher to the upside for a sundry of reasons, the first of which is Trump and his new role at the FOMC. Plus, let’s face it, we’re in the late stages of the American Empire, saddled with $22 trillion in debt that cannot be serviced at higher yields. Governments around the world have too much debt and cannot afford higher rates. Ergo, they’re keeping them artificially low for as long as they can — for as long as they could control markets.

Does it look like they’re losing control?

Yesterday I posted some EXCLUSIVE material inside The Capstone Programme, my mentorship scholarship service, discussing the fate of gold. I had been a long term bull of gold, ever since NUGT was $13. Yesterday, based upon the conditions I saw in the market, I stepped out of all my gold positions and bought DUST.

This was a successful trade.

This is the type of person I am, pal. I’m both a good person and an even better manager of money. I can pick the winners, just like the best of them.

For example, just today I stepped in and bought MNK. That’s a freebie for those too poor or cheap enough to join Exodus.

I bought about 5 or 6 stocks today, one an over weekend hold. Each and every day I buy one stock in the later afternoon and sell it the next day. 1 stock, 1 day, you know the rules.

I’m 8 for my last 10 trades. I am a prolific trader and a genuinely kind and overall great person, the best believe me. I wish you well and hope that you have yourselves a nice weekend.

If you do not like what I just said — fuck off.

I must take credit for this rally, as I called it yesterday. In my mind, I was the only one to own stocks heading into today’s rally; and because of that, I believe that you ought to pay me some sort of tribute — give me some sort of accolade and/or credit. I’m a very sensitive man and need to be told nice things all the time, otherwise I grow bitter and stale and I started throwing hard rocks at people.

Markets are drifting higher, after some morning shenanigans. I see most of my stocks are up and gold is weakening. This all makes sense, being that I sold ALL of my gold yesterday. Well, technically, my Quant is still heavily invested in gold — but I do not have any trading positions in the shiny metal any more. And for this, you owe me some sort of tribute, perhaps a collage of photographs showing me catching the big fish, or diving off a cliff — being a good Dad with the kids — a nice stockbroker with his clients.

It’s Friday and my car is still in the shoppe. I am presently driving a piece of shit that smells like a crayon box and my house has 900 unopened boxes in it and junk is strewn across the floors, festooned across the bannisters — a real mess here. My life is the sum total of my stock market wins minus everything else.

Oh yeah, we can’t stop the buying. Get in there you silly fucking bastards.

Reasonable people hate this rally. But what do you plan to do, fight the war without ammunition and a flam-flam army of ragged fucktards?

Clearly, the bulls have the initiative here. Clearly, the FAGBOX has been broke and with that the consolidation phase.

At a minimum, new highs are likely. However, there are cross-currents and I took measures to address that today. I sold a lot of stuff and bought a lot of stuff, pretty much conducting an entire portfolio makeover. No sense it letting stale stocks sit around doing nothing.

I think gold has lower to go. I think rates will reflate a little. And I think “The Fly” has a series of magnificent wins just around the bend.