Flirting with Disaster

All jokes aside, this market scares me. I have a lot to lose and for a moment, back in early August, I thought I lost control. I went from +16% to -8% in a few short weeks. I was on edge, even while in Turks and Caicos. Sleep was virtually impossible, since I needed to monitor Europe. When the shit is hitting the fan, I find it necessary to watch how all world markets trade to “get a feel.”

I can honestly say, while at the lows, I had a feeling that everything I had built over the years was in jeopardy. My saving grace was two fold: I didn’t have margin. Instead, I had about 30% net cash. And, I had confidence that I would be able to pick the right pivot points to make my money back, like I have done so many times in the past, from 1997 to date.

Believe me when I tell you, many of my peers are out of business. You might find it humorous to hear of hedge fund managers blowing up. But, in reality, the hedge fund manager will be fine. It’s his partners that get fucked. Regular millionaires with only one or two summers homes, wrecked to pieces by some dicksucker with a cocaine addiction. The shame.

This market is a destroyer. It is not something to get all jovial about, with your camel fucking humor. Don’t you see what is at stake here? From my vantage point, we are in the beginning stages of the grind to the bottom. It’s easy for some to take this lightly, trading at some bullshit Staples desk, whilst making bubbles in a retarded glass of chocolate milk. That’s because these people manage anywhere from $00.00 to $500,000. Look, if you’re not managing at least $10 million, you’re not managing real money. When you have $200 million to invest, understand the difficulty in getting in and out of stocks due to liquidity, then shut the fuck up.

I am real close to just shutting it down for awhile, due to my belief that we haven’t seen the worst of the crisis. Italian 10 yr bonds are closing in on 6%. I guaran-fucking-tee you this will be headline news inside of one week. The higher yields go, the further Italy goes into the abyss of no return. However, policy makers are constant interventionists, making playing the short side close to impossible. With year to date gains of about 15%, I’d be stupid to risk much here, in the face of all of this bullshit.

Off to drink a glass of chocolate milk from a “non-retarded” glass.

Well, I am sure most of you got lured into the market as it was about to “go green” only to find yourself mortified by the late day sell off. Then you were bailed out by a small counter counter trend rally.

One big bag of nothing, in other words.

As for me, I ended up slightly, thanks to WNR, OPEN and RFMD.

My position remains clear and outright pessimistic: this is the last leg of the rally. Prepare for black smoke and chards of metal to bustle throughout your idiotic neighborhoods.

It’s coming. Just sit there and wait for it.

There is a real divergence today, with banks in the shitter and tech ripping. However, trannies are weak, so don’t get all excited and shit about a late day rally. I can say with an enormous degree of certainty, the market will not reverse higher today.

See tech is stupid, trading on the whims of frivolous and gratuitous takeover rumors. The real tell is the banks. Look no further than JPM, BAC, MS and GS.

Instead of selling out of my VXX, I added to my position today. It was a small add, in an effort to reduce my cost basis. Make no mistake, we are due for a 3% pullback.

All of my other positions are performing admirably, putting me flat for the day. Yesterday’s purchases of OPEN and RFMD proved accurate–so far–trading up for the session. More importantly, my WNR is barely down. Trust me when I tell you, “the WNR” cannot be kept down for much longer. It is worth at least $25, if not more.

To be clear: if I thought a steep drop was imminent, I’d sell my longs. I am net long because the market is speaking to me. My next play will be to remove most of my longs in an effort to allow my 15% short exposure benefit from the coming drop in stocks. I will not up my short exposure to more than 25%. My future allocation will likely be 10% long, 25% short and 65% cash.

Okay, this market is on auto-wreck now, so I am going for a spin in my new coffin. As some of you know, I intend to be buried in a pineapple coffin when I perish, which will not happen for another 300-500 years from now. Nevertheless, I am a fanatical organizer, stemming from my wealth of knowledge derived from my community.

President Fly

You are enjoying a morphine shot right now. Before you know it, the market will be knifing lower again, as 0bamanomics kicks in and strips wealth from the land. Obamanomics will salt the earth and set flames to your hospitals.

Over the past 6 days, we’ve rallied 13%. Do you remember when I told you the bears who were betting on the eventual collapse wouldn’t profit from it because of their lack of patience? Well, this is what I was referring to. Bear market rallies are fucking insane and they make you feel like “we’re back.” The reality is, none of this is real. I am sorry to inform you of this, as you are young, stupid and naively bullish on the prospects of fucking nothing at all. The systemic dangers are more relevant now than ever before.

Look how low interest rates are and ask yourself “why is the housing market still in depression?” The top 4 banks are cartels and will not refinance the mortgages of millions of people in need because they desire the old, high coupon, debt. With the government fucking the banks with “The Volcker Rule” and Dodd-Frank, we are, essentially, a bankless nation.

Having said that, short squeezes are infectious. We can easily rally another 2-4%, defying all of the laws of reason and democracy– in true asshole fashion. My goal here is to remove beta and grind my volatility down to nil. Yesterday’s purchases pushed my long exposure up, so I will need to sell or add to shorts to achieve my goals. The point is, I am patient. I know exactly where this market is going, but not so sure when it’s going to get there.

I’ve been thinking about the market and know where it’s going in the near term. Due to trade secrets and pending patents, I will withhold this information in order to protect you from civil lawsuits.

I told you last week that I was looking for a single day 10,000 point rally. Well, I bring you good news and fortune: it is coming. The robots who trade this market are experiencing an “overwhelming sense of elation and euphoria” thanks to the year on the calendar. Believe it or not, the programmers had the wrong date inside of the HFT matrix. Up until last week, the robots thought it was 2008, when in fact it is 2011.

Holy shit to the upside!

As a result, we should all kick back, relax, smoke some marijuana, and protest the protesters on Wall Street. As a point in fact, Wall Street is back and we’re all gonna be richer than “Fat Fuck” Rick Ross, if you could fathom that at all.

I’m gonna close out my day with this post because there is nothing else to say. We’re not in 2008 and Europe has decided “it will not accept another Lehmans (sic).” That is some powerful shit right there. Smoke it. Once again, 10,000 apologies for my rough and tussle use of the english language. “The Fly” grew up on the wrong side of the street and has deep seeded issues that have never been addressed. So, should you venture to iBankCoin from some shit-box library down in the bible belt and find my prose to be somewhat offensive, say a prayer to your God for Plutonium Petey because he really doesn’t give a fuck what you think.

Once again, VXX is taking me to the woodshed, now down nearly 15% of my basis. I am cutting losses on it today. If the market tops today and VXX soars 50% from here, I will tip my hat to those who bought my liquidation. A line in the sand needs to be established in order to restore order. With regards to TZA: it’s a much smaller position and I am willing to let it sink deeper before I cut losses there too.

Little did I know, amidst all of the insolvency and bank fuckery, the world was on the verge of entering a new Gilded Era. This is splendid, as I will be in London during November to celebrate this achievement.

If only for a moment, take your shades off and you will see people of substance drinking from golden chalices, eating beluga, chatting amongst themselves while listening to Bach. The Occupy Wall Street crowd are just mad because they are not “rich as fuck.” Because if they were, as logic dictates, they wouldn’t be smelling up NYC.

All that aside, I was forced to join the club today, buying size in OPEN and RFMD to minimize my idiocy through VXX. For the day, I am up, mostly thanks to PWRD and WNR. However, I could have made so much more money over the past few days had I kept my original positions. I made a choice to avoid the envelop altogether in favor of stability and profitability.

For the year, my gains stand at 15%, just 1% off my all-time highs.

Bending to the will of the market, I allocated a healthy amount of cash to OPEN and RFMD.

The market is going to explode to the upside again today because, apparently, Europe is fixed. Not only is Europe fixed, but the recession is now off the table. That’s right, everyone has deduced that there is no fear of European insolvency or recession anymore because Belgium nationalized Dexia. Forget about Italy, Spain and THE PIGS. This market is running higher because it’s not 2008.

Because we are NOT in 2008 and find ourselves in 2011, stocks are ceiling-less. John Paulson is on the verge of breaking the fuck out to the upside, as the banks are poised, mind you, to soar the fuck higher, based upon two things.

1. This is not 2008.
2. Belgium nationalized Dexia.

Fuck yeah!

Also, apparently, Apple is worth more with Steve Jobs dead than alive, not so much different than a Mickey Mantle rookie card.

I’m just happy I did not expose myself with my shorts. My late day purchases of RENN and PWRD should ensure that I “go green” yet again today.

As for the bears, guys wandering the Earth looking for despair: you’re gonna lose today. Actually, not only will you lose, your dicks will get chopped off. My apologies to all of the gentlemen and ladies out there for my most abhorrent usage of the English language.

Oh, I almost forgot to mention this unbelievable note of importance and substance: CHINA IS NO LONGER SLOWING. That shit was just rumor mill stuff, fed to the birds, digested, and excreted out onto the windshield of John “creepy as fuck” Chanos.