Crisis of Confidence

Charlie Gasparino is stoking the flames of uncertainty, revealing a “secret meeting” that was hosted at Goldman Sachs, following Geithner’s idiotic speech.

Look, President Obama is conducting himself with disgrace. His lack of readiness and savvy is showing in spades and as a result Wall Street is fearful. Despite strength in select infrastructure plays, for the most part, stocks are in full retreat today, thanks in large part to the lack of leadership at the White House.

Banks and commercial Re are leading the market lower, with oil, essentially, getting a pass.

If you are short and up big, remember to use this sell off to take profits. You don’t have to switch to the long side. However, you should be covering some shorts, in order to raise cash.

If you are long and dying, you should take on some hedges. Personally, I like short oil here, via DUG or ERY. And, select commercial Re stocks, like FRT, ESS, MAC and SLG can be sold short with impunity.

Into this bullshit, I bought some EEV. No real reason, just a hunch.

My downside exposure is not horrific, considering I am nearly 50% short or in cash. Believe me, I am tempted to take all of my cash and get long egregious amounts of SRS and FAZ. But, the voices in my head keep telling me “asshole, go eat a fucking sandwich, ova here.”

No worries, The Blogfather has arrived and he has a bowl of meatballs to throw at you. Do not concern yourself with the art of investing, as it pertains to me. I work in mysterious ways. I throw banana peels in your path.

Much to my chagrin, I have a carton full of Chinese stocks, while the market depreciates under the albatross of stupid. In a broken market, such as this one, there is no escaping capital losses. One might be clever enough to out fox the lowly subhumans for a period of time. However, eventually, losses shall and will be had.

I have a choice to make, which is not an easy one. Either I “stick with my longs,” sort of just ride them out like a carnival geek. Or, I cut them out like a cancerous tumor and restart.

At least temporarily, I misjudged the zeal of the sell off, due to outlier events. Typically, the bull/bear cycles run in short time spans. What we are enduring now is somewhat unprecedented and bewildering to witness.

There is a lot of ironic shit going on right now, at least from my point of view. When I started the business, the Dow broke 7,000 to the upside. Lo and behold, here I am, more than a decade later, and the market is getting ready to break 7,000 on the downside.

How quaint.

Thus far, I have refrained from making any moves.

Past generations were marked by national heroes. Men like Babe Ruth, Lou Gehrig, or the countless World War veterans, conjure up visions of greatness for millions of Americans. I remember when my Grandfather told me stories about the heroes of his generation, which included baseball players, champions of industry, politicians, police officers, actors, family members, neighbors etc.

Conversely, today, we are a viagra driven society, whose only interest is to fuck something or someone, out of coin or innocence.

Our athletes are cheating fabulists. Our politicians are criminals and/or too stupid to lead. Our “titans of industry” resemble the mafia from 50 years ago, minus the honor amongst thieves. Families are fractured, due to asshole parents taking a greater interest in their own vanity, instead of raising a family and leading truthful/admirable lives.

Don’t get me started on today’s actors and actresses. Let’s just say the days of Cary Grant are long gone.

The stock market is a reflection of a failed society.

A society without virtues is one worth blowing the fuck up and starting over.

HOLY SHIT UPDATE:
Entergy (ETR) announces that it was not able to successfully remarket its Senior Notes, Series A due February 17, 2011, which form part of its outstanding 7.625% Equity Units.

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I’m getting the fuck out of here—off to my local dentist, so that he may torture me.

Right or wrong, I am sticking with my present weightings, which is 50% long, 25% short (exclusive in oil) and 25% cash.

Fuck around, those silly bastards from Congress will eliminate mark to market accounting and send this bitch 1,000 points higher. If you notice, the market tends to trade with a bullish or bearish bias for only short periods of time. We get sharp drops, which last for 3-5days, followed by bear market squeezes.

The text book says, barring the country descending into civil unrest, we are due for a fucking rally. I know: “blasphemy.” However, rallies never announce themselves in advance. They sort of sneak up on you, when you least expect it, and blow your brains out, providing you are short.

Top picks: FXI, CHL, MT, BUCY, ACM, LNN YZC with bountiful oil shorts via DUG/ERY.

…so I am told by Dennis Kneale. Something tells me that little fucker was dropped on his head as a child.

Up here in NYC, the weather is Godly. However, much to my chagrin, I must ruin this gift, bestowed by Zeus himself, with a visit to my local dentist. I am sure he will go through great lengths to torture me, via his little hand tools, during my cleaning.

The market is very indecisive today, with only gold and silver stocks holding onto gains. As you know, I changed my mind on gold, at least temporarily, to a somewhat bullish opinion, based upon an obvious flight to quality.

Incidentally, gold is now the #1 ranked sector in The PPT. The top 5 ranked securities in gold are EGO, GG, AUY, KGC and IAG. Personally, I think gold/silver stocks are fucking ridiculous. If I wanted precious metal exposure, I’d just buy GLD or SLV.

As an aside, silver has lagged gold significantly. There might be some sort of arb play setting up between gold and silver. But, the whole gold/silver scene is far too “homofied” for me to get involved.

Basically, partly thanks to the inviting weather outside, I have done nothing, all day long. Early this morning, I had nice gains in BUCY, ACM, MT and JRJC. However, they have withered away to nothing. The only thing that has gained ground for me, all day long, are my oil shorts.

In short, as per the paraphrased words of the great Dennis Kneale, “let their be more bonuses for Wall Street. John Thain is a hero!”

UPDATE: My name is Joe Blow from “Fuck You, You’re Dead Holdings” and I have received $25 billion in TARP funds. My salary is $50 million and I have received $300 million in bonuses.

Good Day

Following yesterday’s bloodbath, asshole dip buyers are out and about ripping out offers, especially in the basic materials. On the back of okay numbers from MT and RTP/Chinalco partnership news, the sector is getting a lift.

Already, I am long MT, BUCY and YZC. In addition to those names, I like MTW, SCHN, BHP and NUE for a trade.

As for the banks: fuck them. I have zero interest in playing the upside or downside.

My sense, we get a bounce here. My favorite longs are Chinese related, specifically FXI, CHL and JRJC. And, I like LNN (big short position) and ACM too, which are, as a point in fact, entirely unrelated to China.

At the present, my only meaningful downside hedges are DUG/ERY. I will stay short oil until dead and buried in a fucking pineapple coffin.

NOTE: Ag stocks look strong here too. There I like MOS, CF and SYT. However, be careful with those fuckers. Should they reverse, they can eat 20% of your portfolio, faster than Cramer apologizes for making RIMM one of his “four horseman.”

NOTE II: Remember to frequent CRONKITE, if you desire such things like “news.” He is “Johnny on the Spot” with the news and has been doing a bang up job.

Here is an email that was sent to me from Mr. Woodshedder:

Woodshedder to me

show details 12:23 PM (20 hours ago)

Reply

fuck man. I am really scared about the market, man. I just packed up all my dry goods and took my guns to an old mountain village that I owns me a house at. I tooks alls my moneys out of the banks and dug a ditch under house and put it there. My best guess, looking at these here charts, the markets will crash tomorrow.

Back to packing up these here dry goods, lol.

Wood

– Show quoted text –

My response:

The Fly to Woodshedder

show details 12:25 PM (20 hours ago)

Reply

STFU

– Show quoted text –

Calm down people; it’s only the beginning of the end of civilization as we know it. If today taught you anything, our government has no idea how to arrest the ongoing financial collapse. Public support has been eroded to the point where plumbers want to murder investment bankers, rightfully so.

All of my investment bank friends, who were making 2mill per annum a few years back, are dutifully unemployed now, with banks leaning on them and tow trucks repossessing their fancy cars, rightfully so.

As for me, I am one of the very select few who have benefited from this crisis, through various time machine trips, possessed by an overall sense of extreme pessimism. I feed off the hate. My business, despite not really giving a fuck, has flourished to the point where I reject new money, as if it was tainted with polio.

As for this tape:

It’s possible we will retest the lows. However, I get the sense there are too many people leaning short here. I rather stay long China, via FXI, CHL, JRJC and WX, with large and sizable short positions in big oil, via ERY and DUG.

Just a quick reminder: XOM is $30 rich.

Despite today’s meltdown, I only lost 3%, thanks in large part to my oil shorts (25% of assets) and 25% cash position. God willing, I will regain that 3% and more tomorrow. Also, for the most part, I am still up on all of my longs.

Longer term the country is in bad shape. I am hearing there will be a crisis in retail, in fairly short order. I will be taking on some new retail shorts, within a week.

Either way you slice it, the best shorts of 2009 will be found in commercial RE and oil. Stocks like ESS, MAC, KIM, SLG, BXP, FRT, XOM, CVX, NOV, CHK and RIG have significant downside left.

In other news, the fucking bastards from McGraw Hill dropped Barry Ritholtz’s book: Bailout Nation. Being the parent company of S&P, I am not surprised by their unprofessional conduct.

UPDATE: Barry opines on his ordeal with the fuckers from McGraw Hill.

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