Seether-Fine Again

[youtube:http://www.youtube.com/watch?v=Li2PVKMZCo4 450 300]

Barring a huge move, I am done for the day. I took advantage of weakness in SRS and DUG, in order to add to my positions.  At the same time, I am very tentative to sell out of any longs.

As an aside, it is amazing to see commercial Re stock draw investor interest. For example: FRT has very little cash and $375 million in debt due in 2009. As of now, it would be impossible to roll that debt over. Moreover, if they were to raise money via secondary offering, it would be dilutive as a mother fucker.

Within CRE, dozens of firms face similar, if not greater, risks. In no way would I be a buyer of commercial RE stocks, especially while the credit markets are closed to them.

The text book says the market should be down 300-400 points, based upon GE getting the “homo hammer of certain death.”

However, for whatever reason, investors are optimistic over a pending GE crisis.

Fucking idiots.

I refuse to sell FAS, UYM or even PFG, for fear of late day shenanigans. My best guess on the future direction of the market: next week, we dive lower, based upon worse than expected numbers coming out of big oil.

As of 3:00pm, I am 40% long, 50% short and 10% cash.

As an aside Update: California has 2 months of cash left and a 9.3% unemployment rate. Can you say “higher sales taxes”?

I’m down slightly on the day, mainly thanks to sharply higher oil stocks, effectively raping my DUG/ERY positions. Truth be told, I am buying DUG, down at these levels, based upon the belief that the major oil/gas companies will not deliver on numbers next week.

As a reminder: Along with my SRS, DUG, ERY, EEV and REW positions, I am long FAS, UYM, PFG, amongst others.

However, you fuckers need to pay attention to something: GE.

Chatter on the street says GE will need government assistance, in order to firm up their balance sheet. Although it’s fun to buy stocks, based upon some bullshit number out of GOOG, many of you foam mouthed bullish type will be brutally dispatched and clown raped, if the GE story gets worse.

Don’t look now, but GE is hitting the lows of the day, while the market melts up—stuck on stupid.

As always, the prophecies of “The Fly”, as it pertains to the future single digit share price of GE, will come to fruition. The question you need to ask yourself: can the market deal with a distressed GE?

NOTE: GE paying a 9.5% dividend, during such bad times, is ridiculous.

UPDATE: I bought 2,000 SRS @ $61.51.

A good friend of mine has been screaming from the roof tops to sell short treasuries, via TBT, and roll into gold, via DGP or GLD, on the belief that gold will become the new safe haven.

Although I not believe gold is a good place to park funds, I am open to the idea that it can become the “new safe haven,” for big money.

The writing is all over the wall today. T-bills are getting nailed to the floor boards and the dollar is up! And, at the same time, both gold and silver are through the fucking roof.

That makes no sense.

Also, oil/gas and other commodities are down, with exception to gold and silver of course.

So, we have money fleeing t-bills, en masse, and that selling is NOT promoting risk in commodities or stocks. Odd, no?

The bulls case, for a long time now, has been to get long stocks and commodities, in anticipation of the “safe money” in t-bills getting put back to work in riskier asset classes.

Well, we have severe selling pressure in t-bills, but no dice for equity holders.

Look, at this point, stocks are like warrants attached to the overall health of the economy. It is the sideshow, compared to the action in currencies and bonds.

Bottom line: I’m not a fan of gold/silver; however, today’s run should not be ignored. It is clear, the “safe haven” money is being transferred from t-bills to gold. Should this trend continue, gold/silver can move much, much higher from current levels.

Top gold/silver picks: ABX, EGO, AUY. PAAS and SLW.

UPDATE: Everything just changed. Oil is out of control to the upside.

UPDATE II: I bought 5,000 DUG @ $24.44.

First, I’d like to say, there is nothing more poetic that a sharp reversal to the upside, while a “Fuck You Bulls, You’re Dead” title saddles the front page.

Aside from that, XOM refuses to go away and die. In the short term, the market is going to do whatever it wants to. However, I wanted to highlight a disconnect between how investors are valuing XOM compared to its peers.

At current prices, XOM‘s market cap is approximately 388 billion, which is equal to the market caps of CVX, BP and TOT combined.

So, since XOM‘s cap is equal to the combined value of CVX, BP and TOT, let’s compare the two entities on a valuation basis.

Price to Sales Ratio
XOM: 1.10
CVX/BP/TOT: .57

Revenue
XOM: $464 billion
CVX/BP/TOT: $826 billion

Price to Book Ratio
XOM: 3.15
CVX/BP/TOT: 1.47

Gross Profits (last qt.)
XOM: $37.5 billion
CVX/BP/TOT: $54.8 billion

Price Earnings Ratio
XOM: 8.4
CVX/BP/TOT: 5.24

So, either CVX/BP and TOT are egregiously undervalued or XOM is idiotically priced. I choose the latter.

In order for XOM to trade in parity with CVX/BP and TOT, its share price needs to trade in the $40-$50 range.

Bottom line: If XOM got cut in half from current levels, it would represent the best value in the oil space, but just by a little. With a market cap of nearly $400 billion, it represent more than 5.5% of the entire S&P 500.

Developing…

Dear Mr. Lewis,

I require fancy things, because I am accustomed to such niceties. Prior to receiving my services, I request several things from your embattled firm, which are, as a point in fact, non-negotiable.

The interior of my office is to be laced with pearls and my desk must be of the antique variety, preferably colonial era zebrawood. My wife says I look good tanned next to zebrawood.

Once inside my office, I must feel captivated by the decadence of 17th century Persian rugs, which can be acquired from the Newport Restoration Foundation. And, let’s not forget, I must have several chrystal chandeliers, made from Strass, all within 14.5 feet of each other, in order to capture the perfect lighting and establish proper ambiance.

My chairs must be from Africa, made from 100% pure ivory elephant tusks; and my bathroom is to be constructed with the rarest black Moroccan marble available, preferably from the Pietra Naturale quarries.

Last but not least, because I am an awfully busy, busy man, of great importance and consequence, I must be in possession of a regal commode—as I am too busy to walk to the rest room during work hours. See, I am in the business of creating wealth for the world and find it extraordinarily cumbersome to gallivant to the local bathroom, which is 20 feet from my desk.

When I have to go, I must go.

Oh, one more thing, I will also need all of the crown moldings and lamp shades replaced, with something of a French, 16th century flavor.

Be sure to spend no less than $1,220,000 on these small, minor luxuries. Remember, your company is in great need of my expertise and services.

After these demands are met, I shall endeavor to increase the quoted share price of your beleaguered firm, in exchange for a small stipend of only 300 million dollars in stock and cash bonuses.

All agreements and conditions of my employment shall be agreed upon under strict contract, which shall be forwarded to you from our legal department, by the end of today’s trading. Failure to live up to such said demands shall lead to my automatic resignation, by which your firm will be obligated to offer severance of 550 million dollars.

Good Day,

Mr. J. Alexander Thain

[youtube:http://www.youtube.com/watch?v=kNBnX3N1Ask 450 300]

What a fucking retarded tape. With GE and GOOG earnings ready to be released, prepare to get your face ran over by a lawn mower.

The only productive thing I did today was blow out of TNA and buy some cheap SRS. But, as sure as I’m sitting here, the market will pop like a box stuffed with defective dynamite sticks, based upon some better than expected erroneous GE report tomorrow. And, you know Jim “the midget” Goldman will suck the pants off of “The GOOG.”

Needless to say, I kept a bunch of longs, namely PFG, FAS and other unnamed stocks, not worth mentioning—since I failed to mention them prior.

At the end of the day, John Thain is a fucking lunatic, buying portable shit boxes, worth north of 35k. What the fuck happened to this country? We went from heroes to zeroes in one generation.

Finally, I am convinced, commercial Re will feel the blade of certain death, during the year of our Lord, 2009. To capitalize on such misery, I would like to unveil “THE REVERSE FOUR HORSEMEN OF CERTAIN DEATH, FIRE AND DESTRUCTION,” for 2009.

They are: FRT, ESS, MAC and SLG.

Short them good and often.

Be well, or not.

[youtube:http://www.youtube.com/watch?v=Q5VxvF7DaCw&feature=channel_page 450 300]

Good Day to you Sir.