iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,344 Blog Posts

DRINKING THE KOOL-AID — TASTES LIKE HOPE

If you’re shorting stocks now, you might need to wait a while to see a profit. The market is running on hope, the Federal Reserve fueled rally that is seemingly endless. They have a printing press that they operate every morning and with that printing press, they use the money to buy everything. If something goes down, they buy it. If you’re a bank and have shitty bonds you can’t sell, you call them and they’ll buy it from you. Since they’re the Fed, there is no margin call and no one can ever made them sell. They have UNLIMITED MONEY, quite literally and there’s nothing you can say that changes that.

Is it fair?

No, but life isn’t fair.

What does it mean?

It means markets will remain upward trending until we get a catalyst that causes a DELUGE of selling, the sort of selling even the Fed can’t control. Right now the market is running on hope that the coronavirus will subside and everything will go back to normal. So normalization is being priced in, sort of, and many stocks are still down 50% the past month — even after the recent melt up.

Sure, we’ve bounced 20% off the lows — but we’re still WAY down, so put that into perspective.

Am I bullish?

For now. Things are changing fast and we’re getting monthly moves inside of a day. I sense the fear subsiding and I see people drinking the Kool-Aid. I’ve tasted it and it’s quite delicious. I will ebb back into stocks quietly and try not to get too crazy — but we’ve probably got a few days of rally left before the rug is pulled.

Look at how fucking stupid the Empire State Building looks now, a giant fucking siren on top of building to induce panic.

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17 comments

  1. numbersgame

    Hope isn’t an investment strategy, but hedging your bets is.

    I’ll note that QQQ closed the gap from 2 weeks ago ($195.22) and reversed, so will monitor how that plays out.

    Gap still open on SPY.

    MSFT closed up YTD yesterdey , for more perspective.

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  2. alty

    Fly. When will you buy back into your retirement accounts? We are at least 2% above your sell point. How long can you hold out?

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  3. flea

    The VIX continues to fall hard, -22% in the last two days (though still over 50!). It’s very hard to pull a signal out of it’s movement, but together with low volume, things might be quiet for a short while …

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  4. alty

    Broad REITs getting discarded in the early going today

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  5. tjnyt

    The rug is slowly being pulled, my shorts are moving.

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  6. edge

    Good day for getting your balls smashed. might bounce here but not yet yet, the vice will tighten a little more.

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  7. numbersgame

    Anybody want to try and guess how much profit AMZN is actually making ***delivering groceries***?

    Or does it still not matter to investors?

    Anybody else actaully gone to a Whole Foods near them and then compred prices to AMZN delivery prices? Nah, that sounds like too much effort to make investment decisions.

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    • alty

      Or wasted effort.

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      • numbersgame

        “Emperor has shimmering, rainbow garments.” Got it, thanks.

        That’s the input from the plebes I was looking for, so I guess I’m still way too ahead of the curve. Will wait on shorting.

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        • alty

          I mean, explain how that would work? I’m going to walk into a Whole Foods and document the price of 100 random items, go home, look up all the same items, figure out percent differences. And then run it through my valuation machine, finally, profit?

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    • narwhal

      You are clearly a better businessman than Bezos.

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      • numbersgame

        Actually, Bezos is most likely a much better marketer than I am. His branding of Amazon and Alexa is remarkable.

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  8. og

    Is there a reason not to short Disney? People won’t be packing theaters for awhile and not sure how they will be allowed to open their parks till the end of the year.

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  9. sftradeallday23

    I think the ultimate pain will come in a couple weeks when we continue to build on daily cases and then they start wondering why.. At this point it will be way too damn late to stop the tide because managing the number of cases will be impossible. They have done a lot wrong and have learned NOTHING from China. Some of the biggest issues below.

    – There is not a consistent full shutdown across the country and even in places there are the level isn’t even close to China’s control methods(temperature checks at businesses and factories, requiring anyone in public to wear a mask)
    -We are not quarantining anyone unless they need hospitalization. One of the biggest downward trends in Wuhan started when they went door to door taking temperatures daily and placed people in quarantine temporary hospitals to prevent them from spreading it to their families and neighbors. If you are holed up with your family member who is sick you will likely get it and the R0 will never get below 1 which means we will continue to grow daily cases slowly even with social distancing for a long ass time. We haven’t made any efforts to actually do this and at this point it is pretty much to late and not really on their radar as a method to get this under control.
    -Mask are not required to be worn at work or in public and there is no effort to get our population a supply of masks since they can’t even figure out how to get our healthcare workers masks. China required everyone to wear a mask outside and required employers of essential businesses to provide 2 masks a day to employees.
    The market thinks our cases will flatten in 2 weeks and trend down for a couple weeks and we are going to go right back to it. I think daily cases will continue to grow slowly for a month until much harder control measures are put in place across the country. Once the curve finally does flatten it is going to be hard to get it down to a point where you will be able to say it is safe for everyone to start running around. You will be lucky if we are able to get back to 50% work force and consumer levels in 2 months. There will not be a full normal for a long time. This is taking place around the world and there has never been a scenario to run through modern capitalism like this. It’s not just our country that will be 25% unemployment.. It will be the whole god damn world. This bear market rally has been nice but the reckoning in the next 2 months will be staggering and the ripples will seem to never stop. All of this cancelled out if there is a real deal treatment.. not something that improves 10% of cases.. Talking a 75-80% treatment rate..

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    • purdy

      Yes. We have essentially gone to marshall law in several place without even having taken the step of informing people how it lives and spreads from hard surfaces and from asymptomatic people who clear their throats. Write your governor and local papers. MSM and the feds are criminally useless.

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