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Here we go. Now is when it starts to get interesting. Do we FOMO into tomorrow’s tape and chase a +700 ripper or do we fade? Or, if we’re long, do we bless our intact cocks and sell and cash up? We all have different perspectives, but the one indelible fact is — everything has changed. We see Asian markets stable tonight, Korea up and Japan marginally down. Following Trump’s presser, where he announced targeted loans, payroll tax cuts, and a slew of stimulus items, futures are +600. Wonderful — but is it over?
Lots of data suggests NO.
Crude is up 5%, but at such a comically low level it does’t really matter unless we’re talking $40. The 10yr has bounced and is now 0.61%, but for the love of God — it’s 0.61%.
Consider the following.
S&P/LSTA U.S. Leveraged Loan Index, largest one day drop since 2008 pic.twitter.com/BEmdAybAoI
— The_Real_Fly (@The_Real_Fly) March 10, 2020
S&P/LSTA U.S. Leveraged Loan 100 Index -5.5% YTD
— The_Real_Fly (@The_Real_Fly) March 10, 2020
And let’s not forget about the $2 trillion + debt load of American oil companies and the 10 million jobs associated with the industry. The funny thing is, we’re talking oil now, but the central issue is the coronavirus. Nothing has been resolved and nothing has dissipated. For the love of God, Coachella has been delayed.
Ladies and gents, I stand before you with a double blue blazer on, fully prepared to oversee the apocalypse. The +600 tick in futures tonight is an invitation to an oven that will charr your ass black once you step inside of it. Do not buy +600. Do not FOMO your way into the apocalypse. We have RECORD collapses in the LSTA index, blowouts in CMBS spreads, and overall fuckery and chicanery that had only occurred once in my lifetime — 2008 financial rigging.
It goes without saying, Exodus is extremely OS. A snap back rally to rip some idle faces off is in order. A man of my stature would never pretend to be in a position to be caught off guard, let alone being off guard. I am 75% cash, the balance long. My Quant is 10% TLT and GLD from two months ago with a cost basis of $144 and $144, respectively. A rather odd occurrence that my basis is the same for both — but it’s true.
I will trade fast and furiously tomorrow — wind behind my sails as I smash my enemies into their soft skulls with my Bec de Corbin.
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It looks like the desperate scramble for bonds has fianlly died down. Will be interesting to see where they settle a week from now.
Thsi week is a gamble. Now that US testing is ramping up in a big way, we’ll finally see how much of a proble mthis already is in the US. My gut says that with community spread in cities suhc as NYC, the numbers will be pretty big. The US has the third largest population i nthe world, bigger than Iran, Italy, South Korea and Japan combined. The base case is proabbly 10k+ infections.
Is that part of the public’s expectation already?
How high will it get before leveling off?
Will Congress and the Presdient give yet another corporate handout, or actually give the money directly to affected workers? Corporate handout: stcok spike, then recession. Lower/Middle class benefit: less initial stock boost, but better mid- to long- term effect. The ball is in Pelosi’s court (it woul;d be stupid to let her give the President the lead on this).
LA also has community spread
And in other news, The Misquitoes have landed on Gilligan’s Island looking for some peace and quiet.