The Greek Drama Has Ended

Futures are no longer down 100+ and European markets are higher.

I’d like to discuss a movie that I saw last night, The Exterminating Angel. You can catch 5 of 7 parts for free on Youtube. Naturally, I am about to spoil the entire movie for you, so if you care about that sort of thing and want to see the movie, like a child, completely ignorant to the events that will transpire, log off my website now.

The movie is about a dinner party, attended by rich folks, who suddenly, and without explanation, are unable to leave the room after dinner. The facade of dignity is quickly denigrated, and base human nature reigns supreme. A few people kill themselves and they are stuck in this room for at least a week. Outside the estate, there is a carnivale like atmosphere, with police looking at the house, but unable, for reasons unbeknownst to the viewer, to physically enter the house to rescue the idiots who are stuck in a room. They even raised an army detachment to do the deed; but the soldiers lacked the courage to follow through.

Long story short, after the crowd hit rock bottom, they undergo a small ritual and then one brave woman musters up the courage to step outside of the room. No one dared to do it until she went first. After she was successful, they all rushed out and into safety.

At the end of the movie, the same folks are in a church and then the same absurd set of events appears to repeat, the movie ending with a crowd of first class morons unable to leave the church, priest included. Everyone was simply saying stuff like “why don’t we leave after he leaves? Or, “I’ll go when she leaves.”

This is human behavior. As an investor and trader, I’ve seen this idiotic behavior play out in the markets countless times. A small thing snow-balls into a big one, and all of a sudden, CRISIS STRIKES, causing people to sell stocks and get stuck in ‘fag-boxes.’ For example, during the financial crisis everyone was convinced the world was ending. Equity markets plunged, even after bailouts were doled out. Then we’d get news of leaders, like Warren Buffett or David Tepper, stepping into buy ‘cheap shares’ leading to ferocious rallies. The idiots found it safe to leave the room because someone else did it first.

The movie, like the market, is about confidence and dealing with the unknown.

German exports are booming with the euro-slide, which is why their market is leading the charge higher by 8.5%. All of you strumpets are crying bloody murder this evening, pointing to waterfalls, and other inane shit, as preludes to a coming crash in equities. By golly, the homosexuals in the ass of Europe elected a party who doesn’t like austerity and that, my furry little friends from the middle of nowhere, is cause for alarm–shoving futures and oil barrels down into the dirt and fires of hades to burn for eternity.

PUHLEEZE.

This is NOT 2011 and the Grexit fears are nothing more than an illusion, an advertising campaign for the egotistical cuckholds in Davos, who’re merrily eating $43 hotdogs from their private helicopter lairs.

Reason being: sovereign bond yields are at record lows. Nothing-else-matters.

Repeat after me: nothing else matters but sovereign bond yields.

As for oil, I think it’s rather romantic that the oil shieks in the middle east are going the rout of Robber Baron to dispatch our idiot producers in the shale. May the shale workers gets hit in the head with shale rocks and perish under the weight of their own hubris. For those unfamiliar with the term “Robber Baron”, it merely beckons an age, late 1800’s/early 1900’s, when industrialists would crush less capitalized competition by lowering the cost of services until said competition vanished from the face of the earth. Old Commodore Vanderbilt would reduce his ferry fares down to nothing, just to bankrupt his competition. Once victorious, he would raise prices to the fucking moon, then bask in his millions whilst spitting tobacco juice onto his friends expensive persian rugs.

The Srirachi (sp?) party won the elections and have declared Greece’s austerity to the a thing of the past. I am sure these devils are more than willing to go back to the Drachma, in order to fully enjoy some old fashioned runaway inflation, amidst all of their planned entitlement programs. The Germans must be so grateful for having these philosophers and pole grippers in their union.

As such, the euro should weaken on this news, dollar up, oil down. The same old, same old, horseshit, until the entire pile of cards falls and burns.

More good stuff for you rubbernecks to trade off of this week. Enjoy the carnage and bloodshed.

The Dow closed at the lows. We will not break out without bonds collapsing. This relationship between deflation and rising asset prices cannot last. One will cave, either bond bulls or equity longs.

Have a great weekend. See you next week for more chop.

These are supposed to be the finest companies. They’re not babies anymore, most having impressive streams of revenues and an idea of prospective earnings. So then why do their shares suck? Most social media companies have been crushed over the past year–companies at the forefront of revolution, enacting change in human behavior and commerce.

Here are some social media stocks, with 1 yr returns.

ANGI -67%
YNDX -58%
SALE -54%
P -49%
YOKU -47%
TWTR -38%
AWAY -35%
QIHU -34%
GRPN -31%
YELP -30%
TRIP -14%

On the other side of the ledger, only FB (+37%), Z (+28%) and LNKD (+7%) are up over the past 12 months. I have to believe share price performance will, once again, track the growth rates of the aforementioned companies. The culprit? Fucking vulture capitalists and investment banks for pricing these companies so expensively. They came public at such high valuations that they were bound to disappoint. As such, they’re now trying to meet their elaborate valuations somewhere in the middle.

For my money, anything less than 12x sales is reason enough to get long, providing they are still growing and exceeding estimates.

The Euro is now 1.12 and change to the dollar, the lowest level since 2003. The USD/Canadian dollar is over $1.24, leaving the mapled syrup iceberg to the north in shambles. The Aussie dollar is now 0.79 (LOLz). Remember when it was $1.10?

All of the gold bugs swore the dollar was worthless, when in fact the exact opposite was true.

How do we play this trend?

Go on a foreign vacation and behave like Boss Hog. Also, buy foreign exporters or real estate in these lands.

The drop in crude should equate to a +0.7% boost for both US and Chinese GDP. The big winner, however, is the Philippines, who will enjoy upwards of a 2% GDP boost thanks to spiraling lower crude oil. At the same time, China is expanding their strategic oil reserve, which has more than doubled over the past year.

Look, it’s real hard for me to suggest a stock here, with 11 countries at zero % interest rates and bonds soaring to new highs. This isn’t a normal pattern and something is wrong. It’s indicative of crisis. Nonetheless, I am 90% long.

Barring a crisis, the following foreign names might offer some upside, when considering the size and duration of the european QE programme.

LUX (sunglasses)
LULU (yoga clothes)
PHG (electronics)
UN (processed/packaged goods)
PHI (Philippine telephone co)
ALU (telco equipment)
BUD (beer)
FCAU (autos)
TTM (autos)

Today’s rally was 100% horseshit, with just 75% of stocks higher. For a +300, this is the very definition of fuckery.

A person asked me today “if you think we’re going lower, then why aren’t you selling?”

My answer could’ve been told by the Captain of the SS Titanic more than 100 years ago. This is my boat and I am going to drown inside of the cabin, playing with the buttons and the furniture.

We will trade hundreds of points lower from today’s close. The whip-saw volatility is going to kill many people. Deflation is here to stay and there is nothing you or your stupid central banks, sans US Fed, can do about it.

Eventually, stocks will trade up. However, in the near term, we’re going down–led by a wide swath of broken stocks in ruined sectors.

DEATH BECKONS AND AWAITS YOUR ARRIVAL.

$1.3 trillion in quantitative easing means there will be an attempt at reflation. Post US QE, we can see there wasn’t any discernible affect on inflation, sans stock market gains.

I expect the euro will trade to parity with the dollar. Since oil is priced in dollars, oil will trend lower, as long as the dollar trends highs. European QE all but assures lower crude.

Stocks will benefit and bonds should trade lower.

Gold and silver might catch a bid, as a de facto short against central banks. But the number one place to be, over the next 12-18 months, will be european exporters.

Ignore the volatility and short term moves. Everything I just said will come true, as the Gods are my witness.

The market is up today, which is unacceptable. Before the day finishes, let us prey for sharp reversals of misfortune, whereby everyone gets tossed into the chopped meat grinder, broiled, then served to monsters for expeditious devouring.

There isn’t a reason in the world to trust anything on the screen. But there are trends worth pursuing, long term. With gasoline in the shitter, gas station plays will work higher. Names like TA, MUSA and IMKTA look solid.

Consumer sensitive names that cater to the bedraggled, my former and future class, benefit the most from lower gas prices. Now what do the lower class folk do with extra coin? Having been from this class as a young lad, I can tell you, with unequivocal confidence, they eat at the panned cake house (DIN) and buy Nike (NKE) air jordan’s, from either Finish Line (FINL) or Footlocker (FL). It’s part of the hip hop culture now, to be fashionable with $200 rubber basketball shoes on one’s feet. The quality of one’s clothing and brands that he/she advertises (free of charge) tells the rest of the world how important/unimportant one is, truly.

So, if you’re poor and living off grilled cheese sandwiches and cup o’ noodle soup containers, be sure to buy some fashionable $200 basketball shoes at your local FINL this week, in order to ‘pop off’ and acquire easy to impress female counterparts, who are equally bedraggled and of course highly fashionable, with all of the decadence and splendor that one can muster from the bottom of the capstone.

I made one final purchase of NDRM. The market looks real good, which probably means we will reverse lower tomorrow. Either way, a man has to stay true to his convictions. Right or wrong, “The Fly” is true.

Like I said earlier, The PPT hybrid (mixture of both technical and fundamental scores) are indicating biotech stocks are about to bounce hard.