Western Sanctions Cause Spike in Metals

Ok, in the latest round of getting Russia — it appears the LME and CME are now targeting speculation in metals, specifically copper, aluminum and nickel. Bear in mind, this doesn’t stop real world transactions. It just will stop speculation or any trading of Russian metals on these exchanges. The interesting part about this conundrum is the fact that 91% of all aluminum trading on the LME now is of Russian origin. I would imagine once they get through all of the Russian stocks — there will be very little trading done on the LME.

Moreover, and this goes without saying, this is likely to cause a spike in those respective metals and apply inflationary pressures. At the moment, aluminum us +3%, nickel +1.4%, and copper +1.5% on an otherwise weak day.

Russian copper stocks on the LME is 62% of all trade and nickel 36%.

High beta stocks are down over 2% and the big story is the US 10yr +14bps to 4.63%. I haven’t formulated a cogent description of what I want to do just yet, as I view the Israel-Iran situation as fluid and I’ve been wrong in my positioning thus far, down 1.5% for the session. The collapse in $BTC has surprised me, since in the past Bitcoin served as a defensive measure against risk off. However, since then the price of BTC has risen a lot and I suppose the hands are a bit weaker now. Nevertheless, I am reticent to believe markets are going to collapse, which is ironic because I almost always feel that way and there is all of the prerequisites for it to happen happening right now.

I often hear the term “world war 3” bandied about on X, as if any conflict that might arise is on par with global war. As much as it chagrins me to see Iran and Israel at war — even if we entered the conflict — it would not lead to “world war 3”, unless of course China and Russia had a military pact with them.

From my novice point of view in all things to do with war, yesterday’s attack on Israel, in response to their bombing of the embassy in Damascus, was child’s play — not a serious attempt at causing harm to Israel. If Israel responds, then we’ll have pressure applied to oil, which will jar markets. But as deleterious as this conflict might seem to you, it is provincial and not global — bears little to no effect on capital markets — and might actually cause stocks to go higher as a result.

Our opinions on this matter are meaningless as investors. The only thing we can glean from the initial phases of this conflict is the price dump of $BTC — which is down $2500 from Friday’s close.

The Saudi market was down 0.3% today and Israeli UP 0.27%; ergo, we have ourselves a nothing burger.

CAVEAT: In the event Iran successfully attacks American assets in the region, this will greatly jar markets temporarily — but then adjust to the reality that war, unfortunately, equates to greater spending and is a net benefit for markets.

I am not a believer in gigantic Iranian attacks, based simply off recent historical events. Nations who work via proxies are inherently cowardice and I expect some sort of normalcy next week. Because of this, I took a net long position over the weekend, but not without hedges. I have some $TZA and $UVIX just in case — not enough to stem the tides of world war — but enough to contain any true panic to the downside.

I closed the session +55bps and this is where I tend to shine, gaining whilst you are losing — never drawing down and maintaining a sense of decorum even in the face of tragedy.

I wasn’t always this good and used to fall victim to my caprices, a younger Fly loaded with too much testosterone making bets to demonstrate the size of my penis. As the years waxed on and things became clearer to me, I learned to moderate myself and not fall prey to folly and tricks and gambits.

I remain obstinate in the face of crumbling facades — the one true pillar of excellent in all of finance that you can depend on to offer excellent advice, at the low cost of me insulting you with very mean words and insults directed at your person and all of the people you hold dear.

Have a great weekend.

Let me be clear: I do not like being toyed with. I find myself publishing the same Iranian war threats for the past week and grow weary. I’d also not like to see war, if I’m being serious. Because war afflicts the innocent and I’d prefer people to live in peace, building for the future of mankind, rather than be relegated into to senseless conflict.

NEVERTHELESS, we are here, a place where man has been countless times throughout history — on the precipice of war.

As investors: how do we protect ourselves?

It’s simple: you hedge against your longs with inverse etfs, such as $TZA, $SQQQ or $UVIX. I have in my strategic long term account $SQQQ $FAZ and oils with 15% cash. Hedges should be used to hedge, not to be instruments of greed. Take profits when you can and try to remember, even when things look the bleakest, ultimately markets are designed to go higher.

I closed out my trading hedges in $FAZ and $UVIX and only possess $BITX and oil stocks now with 63% cash, proven to be right, +75bps for the session so far.

Do not fool yourselves into believing you are anything like me — a stock market prophet — able to peer into the future by melding the time space continuum and folding its layers like a cake and eating it.

I closed at my session highs down 34bps and I feel really good about it. The brief sojourns into loss enable me to understand how many of you pedestrians feel on a regular basis. Oh, the helplessness. Oh, I do not not know thou art have in store for me!

Meanwhile I was in the laboratory concocting my next wins — all to do with global war, shortages of oil, and a large and unrelenting spike in interest rates and Bitcoin. There is a very heavy easterly wind blowing now and you can’t see it. If you allow yourselves to be still and aware of your surroundings — you can feel it. However, it’s impossible for the uninitiated and you’ll just keep yammering on buying $NVDA and watching transexual shows on $NFLX.

Inside of my Capstone, I have concocted a severe plan to profit from what I see coming. You betting against me is folly and those who’ve been following me long enough inside Stocklabs understands it’s akin to suicide by the rope.

Consider the following:

Nuclear war busts loose between American and Russia and all American cities are targeted and all of its inhabitants are vaporized. Really think about that for a second. It would behoove me not to suggest we could build back better, dare I say. The crime rate would be inexorably ZERO and blue dyed hair would be a relic of the past, something akin to when dinosaurs roamed the earth in search of meat.

People hiding out in farm in rural centers or well to do enclaves in the suburbs would come out and build anew. Denizens of ill repute and democratic watering holes washed from the earth. Sure, the fallout and the clean up would be arduous, annoying even — but I’m sure we could deploy AI powered robots to do much of the heavy lifting.

HOWEVER, it should be noted the vast majority of programmers would be “vaporized” in the fires and folks in W. Virginia are largely retarded. NEVERTHELESS, nuclear war doesn’t have to be a completely bad experience, if you come to think about it.

Some believe Iran will strike “while the iron is hot” and others believe they’ll strike “soon.” I tend to lean on a fortnight or at the very most two weeks.

While one week is possible and 3 weeks too long, I do believe 14 days is the proper amount of time to wait for war. There are many things that can and will happen, once war begins. The only question is: “when do you think it’ll happen?”

I think about this often and have sifted through endless documents trying to find a timeframe and after all of my research I’ve concluded it’ll happen in exactly one day less than 15 days. Perhaps in about a half month’s time we’ll look back on this most and consider it to be prescient. The Persians rarely bluff and are well known warriors, so it’s only a matter of time now.

Dear Sirs —

I am obligated to inform you that I do believe markets are at the precipice of sheer and utter collapse. However, I will preface that bold statement with a disclosure: I am almost always thinking markets will collapse and find myself often disappointed by the specter of it all “working out in the end” so very often.

I closed near my session lows of -2.2%, mostly due to a very large $UVIX position gone sideways (actually fucking lower) on me late in the day. I did not sell it because I am obligated to have shorts into tomorrow. Whether I make to lose money is immaterial. Some things are more important than money, such as being involved at the very beginning of what could end up being THE TOP for 2024.

Bear in mind, the dollar index ran higher today with oil and all of the banks and interest rate sensitive companies fell through the fucking floorboards. Look, it’s all very mundane stuff and I am sorry you just don’t get it. The point is we are at a crossroads from which true disaster might materialize, especially if the regionals start to tank and all of the companies who depend on refinancing their credit to remain in business. Let’s not even delve into ‘cash sorting’ and the housing market just yet. Today was merely the opening salvo of what might turn into an orchestral masterpiece of gloom, regret, and cataclysm.

I am happy to have lost some coin today, as it gives me the proper motivation to get it all back. I am heavily long oils, short bonds, short small caps, and long volatility into tomorrow.

See you catamites tomorrow.

If you’d just entertain me for a moment I’d like to remind you that the housing market is fucked, as well as the regional banks, and quite possible REITs. The US 10yr is now at session highs above 4.5%, +15bps, with eyes on MOAR. It’s important to remember that the entire western economic scheme is predicted on low interest rates. Now with rates moving higher, eventually, all will collapse.

Meanwhile, we are seeing some bogged pin action in various financials today. In a perfect world, this small start will soon blossom into something much larger.

$RKT -11%, $VLY -8.5%, $FNF -8%, $NYCB -7%, $VNO -7%, $IVZ -7%, $BXP -5.5%, $OZK -5%, $ZION -5%

Bear in mind, the treasuries are still on the books of the balance sheets and the regionals need tier 1 capital to pass stress tests, meaning they’ll either have to sell at heinous losses or raise capital or simply go out of business. Because of this, I have a position in $FAZ and will hold it at least until tomorrow, in the hopes that rates continue to climb and this causes fractures in the banking system — permitting me to profit from its eventual demise.

Because the CPI came in hot, bond yields have soared 13bps to 4.5% on the 10yr, the dollar +0.9% v euro, and stocks have collapsed. I’m of course greatly chagrined by this all, especially since I came into today 141% leveraged with just 20% short. I had to pare down my longs immediately to get me into a slightly net short position and now possess losses of 1.75% for the day. I did not think the CPI number was going to be deleterious since Biden rigs everything. He is all knowing, a true Machiavellian genius hiding behind a grotesquely large cone of iced cream.

My temptation is to unequivocally tell you that “it’s over” and there’s no way the housing market can sustain at 9% mortgages and how the idea of a rate cut is now fantasy. But I’ve learned many lessons the past two years and will not underestimate the stupidity of my fellow trader, to get in that fucking market right now and bid $NVDA higher.

I wish I had more bad news to give you, such as broken elevator cable pin action, or some regional bank about to bust lower on liquidity concerns. After all, they’re all leveraged long treasuries at fresh fucking lows.

But it’s all papered over and we live in fantasy land.

I’m 42% cash, 20% short, still thinking on which direction to bet on.