Special Emergency Message From Your Government

Buy the banks or we’ll kill you.

Hank Paulson, U.S. Government Bank Bailout Department, Goldman Sachs

UPDATE: Even though I believe technical analysis is the “special reserve” ambrosia for the ignorant and laziest sort of investor, Senor Woodshedder has done an excellent job reading the tea leaves.

Read his recent missive here.

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

Another 400 point rally?

It seems every other week, the market runs 400 points. This is absolute tomfoolery, coupled with fuckery, to see stocks gyrate like this.

Much to my chagrin, I lost several boat loads of appreciating dollars today, getting “skull fucked” in [[SRS]], [[SMN]] and [[DGP]].

To make matters worse, I neglected to cover my [[MON]] short, when it was down near $104 earlier today.

So, the 2nd quarter has officially begun with a mind numbing 3%+ rally, effectivley wiping out 1/3rd of the year-to-date losses, in one day.

With this strength, expect to see a lot of banks raise capital, adding fuel to the bullish fervor. However, in reality, all of the deals will be dilutive and do nothing to help produce earnings.

On days like this, I just want to walk around NYC and throw dynamite sticks at birds and shit.

Final note: Fuck the banks.

Maria and Co. are quite busy laughing it up, telling their viewers how “everyone knows the banks are losing money.”

So, since everyone knows the banks suck, we might as well buy them, right?

That’s like saying, it’s okay to go hang out in the house that is lit aflame, since everyone knows it’s on fucking fire.

Go ahead, get drunk and buy some [[MER]], [[LEH]] and some [[RL]] to boot. Who cares if you are inadvertently burned to a cinder, trying to catch a bottom?

After all, the ungodly folks at CNBC are not permitted to invest in the market. They’re just idle spectators, trying to catch a few ratings points.

In other news, “The Fly” is being flame broiled, like a a filthy Burger King Whopper.

I realize my title could get me shot, if i were living in China. However, that is not the case. And, since I live under the protection of former Italian mafia bosses, in NYC, I have no problem saying: “Fuck China” over and over, until the goats come home.

I’m going out on a limb here, exclaiming [[FXP]] is a screaming buy—down at these levels. It is so cheap, meaning its components are so expensive, I feel like cleaning out other positions in order to load up, sub $85.

Unless we are entering some new trading range, the components of FXP should trade lower, within days, if not tomorrow.

The stocks you need to watch, when long FXP, is [[CHL]] and [[LFC]]. Both names are heavily weighted in the ETF and pretty much dictate where the fucker goes.

My chart chomping friends swear the market is going to 12,750, short term and maybe retest 13,000. I, on the other hand, believe this rally will fail, like all the others.

However, in the event that I am wrong, it makes sense to get long something. Right now, if forced to go long, I’d buy [[RIG]], [[CLX]] and [[AAPL]].

By the way, I am long all of the above stocks.

So, to sum things up, fuck China, via FXP, works here. Don’t overshoot and leverage your accounts, like some sort of degenerate OTB guy. Trade in small numbers.

UPDATE: [[FED]] cannot get a break. If this fucker can’t rally in this tape, when will it?

[youtube:http://www.youtube.com/watch?v=cb4Dd9itgzo&feature=related 450 300]

I bought 2,000 [[FXP]] @ $84.24

UPDATE: I bought 4,000 FXP @ $84.57.

Disclaimer: If you buy FXP because of this post, the summer rally will begin now. And, you may lose money.

I repeat, “The Fly” has officially switched over from hot/scolding coffee to the iced variety.

As you know, this can lead to a “pandemonium style” sell off in the market.

Developing…

Someone once said: “hell is a place where there is no reason.” Well, this, my little internet friends, is hell—for nothing reasonable is transpiring.

For example: [[UBS]] writes down 19 billion big ones, and reports a 12 billion dollar loss, sending the stock significantly to the upside.

Or, [[LEH]] raises 3 billion dollars, under unfavorable/dilutive terms, sending the stock through the roof.

Or, the ISM and construction data, which was released this morning, was bad—but could have been worse. As a result, the market runs 300 points in your face.

Basically, we have a bunch of bottom bitches out and about buying stocks, who have no regard for the laws of reason. What’s reasonable to me is seeing [[MON]] lower. Also, it makes sense seeing gold get the “hammer of certain death.” And, I understand why commodities are weak.

The bulls are running on the notion that we are out of the mess. There is no longer a “credit crisis,” and the recession will be very shallow. Before you know it, the low rate environment will spur a new round of economic growth and we all live happily ever after.

However, the problem with that story is that it does not include potential inflationary effects of such a rapid turn around in the economy. The only reason why commodities are “somewhat tame” is due to forecasted economic weakness in the States.

If you think copper, steel, coal, natty, oil and concrete are expensive now, imagine what they will be if the U.S. was growing at a 4% clip.

My point is this: in order to pop the commodity bubble, the Fed should be raising rates, not lowering them to zero. All this jibber-jabber of a bottom is ridiculous, as long as the consumer is saddled with high finished food, gasoline, natural gas and electricity expenses.

With my money, I will buy [[FXP]] under $90, [[SRS]] under $95 and [[SKF]] under $105. Also, with commodities under pressure, I will buy more [[SMN]], [[DCR]], [[DUG]] and sell short [[POT]] and MON.