BEWARE OF THE HOMO-HAMMER

Many of you query “hey Fly, if the market is so bad, why don’t you short stocks? (heavy Brooklyn accent)”

Before I answer your question, let me just re-warn you of retardation taking place in the Empire of Accounting Fraud: China. Met coal prices are plunging and the global growth story is in jeopardy. Very soon, you will be tempted to own stocks with low multiples. Moreover, you will feel a certain sense of instant gratification upon short term runs in these commodity names. Before you know it, BAM, the homo-hammer of certain death and destruction will crack your skeleton in half.

Look at ANR, ACI, CLF, AKS and X– all very attractive no? Those stocks can easily lift 20% from current levels, or continue their fucked up trip to hell and drop by another 50%.

Right now, I have a net 15% short position. My cash position is around 70% because we are very oversold. I am a firm believer in the “rubber band” effect and have seen markets run hard in the most arduous of circumstances. All we need is one positive headline and this market is going to decapitate all of the newly minted bearshitters. I am not ruling out adding to short positions; but for now, I am purposely opting for the safer route via cash.

My original intention was to hold cash until the market got hammered, in order to step in and buy names. However, now I am starting to think it makes greater sense to wait for a rally and sell it short. We are in a very difficult market and selling short isn’t for the faint of heart. I do believe there will be a run on a number of hedge funds who are long commodity names, which is why they are getting hit the hardest.

In closing, I cannot justify buying stocks in size until the S&P touches down below 1,000.

Some of you are new to iBankCoin and do not know whom you are speaking to, when commenting on “The Fly’s” blog. That’s alright to a certain extent, as all of us deserve a good talking to and education to expand, mentally. I’ve watched most of you make heinous jackasses out of yourselves for the past 5 years, with unique and unparalleled consistency. It’s entirely understandable because you are retail aka “goat fucking misfits” who are here to serve as bag-holders for the managing elite.

Oh, by no means are these so called hot shot hedge managers any better, mind you. They are simply holding a bigger bag.

Thanks to my rocket ship technology and time machine capsule, “The Fly” has never participated in the holding of bags. The very notion of it is somewhat foreign and arcane to him. I’ve determined the direction of this market far in advance of your newspapers and know when to press bets and when not to.

You should know, most of iBC is bearish now, including RC, Wood, Jakegint, Scott, Caine, Chess (to a certain extent, although more open minded) and myself. This is a very rare occurrence. The last time we were all in synch was late 2007, just before the proverbial and literal dismantling of the stock market.

A great many of you are optimistic about the price of shares only because “everyone else is bearish.” Frankly, that’s an asinine investment thesis, hinging upon the outer-banks of sanity. If you are buying XYZ, you should have a reason to own the shares that are based upon the companies fundamentals, not the color of your fucking mood ring.

With regards to your investment portfolios versus net worth: you shouldn’t have more than 50% of your worth in stocks. If you are placing all of your eggs in one crooked basket, do not blame anyone but yourself when your mood ring wipes out your 5 figure ThinkandSink accounts.

What is the bottom line to all of this drivel you ask?

See the title of this post.

[youtube:http://www.youtube.com/watch?v=hXJbngoQDZA 603 500]

Up until now, I’ve ignored this Occupy Wall Street crap. However, the shit they pulled yesterday resulted in a 2 hour traffic delay for yours truly. I do not like being inconvenienced, especially by unemployed hipsters. Don’t they know 0bama is the biggest Wall Street supporter in the country? These dicksuckers should go to Washington and demand 0bama’s organic resignation, instead of fucking around with my traffic algorithms.

I am celebrating the coming depression with extreme opulence. While at home in your lazy boy chairs, watching re-runs from a 10 inch black and white teevee, feel free to join me for a drink to commemorate the end of the western banking apparatus (No RW). You geeks can sip on that Miller light shit. “The Fly” drinks from a diamond encrusted chalice filled with dark red wine, derived from the left bank of the Gironde river.

It’s all downhill from here. You might as well get your sleds out and make the best of it.

I held my shorts in the event something “awesome and amazing” happens over the weekend. My allocation is 23% short, 8% long, 69% cash.

Please take a moment to educate yourself what a “Brazen Bull” is and how you might want to perform when you become the “instrument.”

I sold short another 10,000 EXH.

Disclaimer: If you sell short EXH because of this post, XOM will buy the company out for a 300% premium. And, you may lose money.

Look at Morgan, ticker MS, and run for cover.

Rumors are swirling and doing so in grandiose fashion.

And I am not talking about the street vendors selling turtles. There is a widespread belief, amongst those with brains, that China is a house of cards, readying to implode. Chinese CDS have been blowing out and all stocks related to the land of accounting fraud have been beheaded. Now short sellers are simply pulling out the delicious (no Hannibal) entrails of big American industrial players who have exposure to China, Braveheart style.

Look at the coal sector: decapitation. Shares of ANR, JRCC, ACI, WLT-gone.

The metals are dead men walking: CLF, X, STLD, AKS, MT- laughable.

Retail: TIF, WYNN, LVS, YUM- splat.

Today’s big hits are in IR, FLS, MTW, PCX, ROC, CE, FLR, etc. I could go on.

So, what do we make of this? Do not look to America for guidance, as this country is filled with fucking idiots who would buy stocks on the day of a nuclear detonation over Los Angeles. If China is slowing significantly, there are zero chances for us to rally. Actually, it’s quite laughable that people are buying stocks today, with all of these potential headwinds.

With a Chinese slowdown, our S&P 500 will need to rely on domestic sales: ROFL. One could paint an argument for S&P falling to 600 under those circumstances, as EPS cuts will be far more insidious than any fucktard analyst is factoring in.

Nevertheless, it’s a slow Friday afternoon on the last day of the 3rd quarter, so anything can happen.

With my money, I remain on the sidelines, with a net short exposure. I cannot get bogged down in negativity because that’s a money loser. I am simply acknowledging these risks and keeping a keen eye on them. Why the fuck is TEX so cheap? It makes me wonder about the viability of these firms, under a draconian scenario playing out in China. Keep these things on your back-burner and trade accordingly.

We are entering the 4th quarter with style. The 3rd quarter sucked balls, marked with grotesque absurdities. Going into the month of October, I am on high alert for a “fuck you, you’re dead” rally. My beard is growing in thick and my rambo knife is sharp as shit. Just a little piece of advice, if you happen to see me in Target, or at the Short Hills Mall, don’t fuck with me. I am on edge.

European banks are getting obliterated, down 6% plus. On the final day of the 3rd quarter, expect wholesale liquidations, Ingersoll-Rand style. China is slowing and the wheels are about to come off of this car made from dynamite. Nevertheless, I am not adding to any shorts because we have asshole dip buyers galore in this country. We buy stocks for no reason at all, mainly due to our natural instincts to take on risk. America was built on risk and is now being buried in it.

In short, TLT is your tell and China is your catalyst.

Ever since May, the S&P has been down. With September’s 5.5% decline, followed by the 5.5% decline in August, we are now down for 5 consecutive months. The last time we had losing streaks like this was in 2002 and 2008 to 2009. In both cases, it led to a monstrous rally. Although I am bearish as a hairy human living alone in the woods, I need to be on guard (no Jerry) for an 8% rally in October.

The market has been grinding lower, led by the absolute destruction of basic materials, financials and tech shares. The leaders have been killed and people have pigeon holed themselves inside 80 year old man stocks. Coupled with the glaring fact that everyone is bearish, Zerohedge’s popularity is at an all-time high and I am 90% out of the market, something is astray, if I might so bold as to say so.

This just dawned on me, as I was doing some reading, thinking about the future. When thinking about stocks, I always lay out scenarios that might play out, then try to support them with historical precedence or hard facts.

The reality is, we are down 5 straight months and the news is as bad as it gets. Despite the bad news, we haven’t cracked lower. Instead, we are meandering around, grinding swing/momo traders into dust.

The real negative developments, aside from Europe, is the deterioration of China and the rise of Chinese CDS. What the fuck is that all about?

What to do, what to do?