250 Billion Ways to Die, Choose One

Before you throw yourselves into lit fireplaces, I want you to consider one thing: the entire country might, very well, go bankrupt one day. Aside from the mountains of national debt, $19 trillion and counting, our burgeoning oil and gas sector has about $250 billion, most of which is now low quality paper, thanks to the collapse in crude.

Just like when home prices collapsed, causing the underlying debt of those who financed that sort of shit to vanish, one could make a similar argument that the shale oil boom laid the seeds for the complete and utter annihilation of these United Steaks of America.

Let me explain.

The credit crisis of 2008, actually started in 2007. Things got dicey and were quickly swept under the rug. As home prices continued to decline, the credit quality of that paper got downgraded, causing banks to take action, raise capital, in order to offset the write downs they were taking on illiquid, seldom traded, debt instruments. I suspect a similar scenario, albeit smaller, might be taking place now.

As that price of crude dives lower, the knife inside of CHK turns rapidly. Their guts are being mangled, strewn out across the ground. It’s only a matter of time before it bleeds out. If CHK were to go bankrupt, who is affected by it? I am not merely picking on CHK. This is a question that needs answers. Who owns all of that oil and gas debt?

How much does CFR, a Texas bank, own?

Within time, all of these questions will be answered. Since the drop in crude is somewhat fresh, I’m guessing the financial ramifications won’t be realized until Q1 of 2016.

She just doesn’t have the swag that the good Dr. Bernanke had. Perhaps it’s her lack of beard. She could’ve done anything yesterday and the market would still spit in her face today.

Emerging markets are the credit crisis of today. Nothing the Fed can do will stop the Canadians from entering debilitating depression.

As this market swan dives lower, I want you to remember who caused this: your good friends in Saudi Arabia.

In the state of Texas, high paying oil and gas jobs are being lost and low paying service jobs are being added. In other words, thanks to Saudi Arabia’s decision to break the price of oil and the US economy, our oil and gas workers are being fired and those gents are taking new jobs at the Holiday Inn.

This all happened because we hated to be dependent upon evil foreign oil. So over the past decade, we expanded our domestic oil production, levered up the debt, and made a drastic difference in where we buy our oil. We were becoming energy independent, contingent upon one minor detail. In order for this scheme to work, oil needed to trade above $75, because our cost to drill was so high.

Now we can vividly see the errors in our ways, once again.

The price of oil has been destroyed. As such, global econmic growth is now in recession. The next step will be to fetter out who has exposure to all the debt, see them go bankrupt, then watch The House of Saud celebrate our collapse, just like they did when they destroyed our buildings.

I like gold here, specifically GG.

As much as I relished the short lived rally of 25 minutes ago, it’s over now. The path of reversion has commenced, yet again, stymying all remnants of momentum.

Once again, each time the market looks like it’s about to bust loose, sellers meet them with vigor.

The NASDAQ is still up; but the reversal of 40 points from the highs is indicative of a market without purpose. Stock prices are fluctuating back and forth, resulting in a great nothing. If you sell short or get long into the teeth of any movement, you will end up on the receiving end of a ‘fag box.’

I am out of the office today; but able to monitor things closely. I added to SHAK today and retained the bulk of my cash, which is significant. My largest holdings are AMCX, BIDU, AAPL and PANW. I’m somewhat bullish on gold too, via GG.

As I write this, the market has fully reversed, setting the stage for late day trickery. Often times, on Fed day, the first move is wrong. On occasion, the secondary move is a head fake too, paving the way for the true move the next day.

Who knows? It’s all noise anyway.

The market will likely do a lot of nothing, at the end of the day. Sharp rallies will be sold and fades will be bought–a giant circle jerk of epic proportions– pounding impetuous traders into clown dust.

I gave RAUL front page privileges today because I am busy, attending to a personal matter. However, being that I am armed with a wifi capable ipad and ability to trade from off-location, I felt it was incumbent of me to inform the masses of the reader class of people that I have, once again, and indeud, added to my burgeoning SHAK position.

“The Fly” envisions an era of mammoth gains to be had over the next decade, or so, long shares of SHAK. He will bathe in the grease of their frenched fries and relish in the horrors of their coronary clogging meats.

Grandma Yellen will not hike rates today, beucase that would be a very stupid thing to do now, amidst global recession. Prepare for a rally and possible fade. If God is great and just, he will lower the price of SHAK, so that I might buy more of it. Or, he can simply permit it to rise.

Either scenario is perfectly acceptable to me.

I am going to pitch you now, like a two bit salesman. Membership levels are at all-time highs inside the halls of Exodus, for good reason. It works. Many thousands of you have taken me up on free trials, and many walked away impressed, but not enough to spend money. The people in my industry, brokers and money managers, traders, are some of the cheapest people on the face of the earth. I used to be one of those people, always looking for deals. I think it’s because we’re a skeptical breed, rooted in the fact that we’re in sales.

This is what I want you to do: try us out for a month. Hit me up and I’ll dispatch one of my servants to walk you through a live demo. The market is for shit, but our algorithms will help you see things clearly.

Here are the most recent oversold signals, all up from watermark.

Here is our track record for timing oversold inflection points, since 2009.

And here is the current reading, which is overbought on our 3 and 6 month algos. As you can see, it is flawless over a 10 day hold, indicative of a market that might be setting up for a let down.

Why am I pitching you?

This is what I was born to do. I make 10x the money by managing other people’s money. But building software and servicing the investor community with kick-ass tools is where my passion lies. iBankCoin is only a small fortress city, with a limited scope. Ultimately, I intend to branch out, which is why I need you clown-fuckers to “like” our Faced Book page, so I can spread my infectious brand of propaganda amongst the Grandmother class on the book with many faces (extra GOT).

You’re getting excited, aren’t you? FIT is +3 since my morning post and markets look grande again. The Federal Reserve meeting is scheduled for tomorrow and nothing can go wrong, apparently. Reflecting on my personal struggles in the market, over the past two years, I am not excited, whatsoever, about current price action. Even if 100% of stocks were up and all of the bears laid dead, strewn out across Wall, I’d still compose myself with a stoic oddness, often seen in department store mannequins.

Let me rephrase how I feel, so that you really understand where my head is at.

My third largest position is BIDU, currently up 9 dollars. If BIDU were to go up 90 points today, effectively making me a rich-er man, I wouldn’t stop reading the book that I’ve been reading all day long. I do not care about short term squeezes or “potential breakouts” anymore. It’s all shit. Fool me once: shame on you. Fool me twice: fuck, I’m an idiot. Fool me for two years straight: I’m a god damned piker who deserves to lose money.

Quit being a piker. Don’t believe anything they tell you. It’s all lies.

“The Fly” is the truth.

You have no excuse for owning 2nd rate stocks now, following a correction in the market. Now is not the time to buy dog-shit money losers, when all of the good companies are on sale.

For me, FIT is one of those good companies, trading at a discount. I know what you’re thinking: FIT is another GPRO. Well, there is a discernable difference between the two. Case in point: today they just cut a deal with TGT to grace all 335,000 employees with their little illuminati friendly tracking device.

The skeptic in you says “big deal.” That’s because you lack motivation and are accustomed to eating bags of cheesed doodles about the couch. To me, this deal speaks volumes about management. It seems the folks at FIT have their shit together, more than what I can say about the clowns at TWTR and YELP.

FDX missed earnings. They always do this ahead of the holiday quarter. This is your chance to step in before the pagan holidays.

Lastly, I am still obsessing over who GILD is going to buy, following their $10 bill convertible bond raise. I spoke with the good Dr and he believes they will target NASH, cystic fibrosis or oncology plays: a pretty wide field.

Some names that came up are ICPT, Gentif, VRTX and QURE. If any of you good folks have some cystic fibrosis biotechs with good pipelines, I am all ears.

One of the things I insisted on having in Exodus is a wide array of fundamental analysis tools, catering to those like me who sometimes eschew technical analysis like the Black Death.

Since the market has pulled in a little bit, I thought we’d take a journey into the bowels of the tech sector’s valuation. Shall we?

Weighting wise, tech now comprises more than 21% of the overall market’s capitalization. That’s a high number, because every other sector, aside from healthcare, sucks.

Median p/e ratios are historically high, especially when compared to the median p/e of the overall market.

Price to sales ratios are somewhat on the low end of valuations, since 2005. More importantly, the tech sector is now trading at a discount to the market, for the first time in over a decade. My suspicions lie in the vast amount of biotech IPOs that have come public over the past year, inflating the median p/s ratios of the overall market. As you can see, the average p/s of the overall market is way above trend, twice as high as 2011.

As much as I’d like to say tech is cheap; it just isn’t that cheap. There are other parts of the market, specifically basic materials and consumer discretionary, that are pricing in armageddon. I suspect will continue to frustrate people, offering outsized gains and losses to the trader class.

So far selling CYBR and ONCE proved to be a smart move. But now comes the part when the markets are rising and I have a boatload of cash and nowhere to allocate it.

Today’s market gain is nice, but it feels tepid. Lots of good stocks are down and others are marginally higher. The rally lacks resolve and could reverse by late afternoon. Plus anyway, none of this counts until after Thursday’s Fed decision.

I am fairly certain that if the Fed raises interest rates, it will spell doom for equity prices. Maybe the initial reaction will be bullish and maybe shorts will cover no matter what they do. But after the dust settles, I think investors will come to realize how fucking delusional a person this Grandma Yellen is.

Aside from that, I have to be somewhere Thursday and will not be able to trade. So, the best course of action, for me, is to sit tight and make the best of a small book, one with AMCX as my largest equity position.

What are you clowns buying? Tell me what your largest position is and maybe I’ll join you.

This business makes an old man out of a young one quickly. From the moment I entered the business its been wrought with drama and collapse, perfidy and mania. There is nothing unique about my tenure in the market. As a matter of fact, I am reading a book written by Henry Clews, 28 Years in Wall Street, circa 1885, and the same stuff was occurring back then. Fred Wilson was alive back then, doing deals just like he is now, only under a different name. Like vampires, the same characters stay with the market, swindling others who aren’t paying attention, not because they need to, but because they can.

Here are some excerpts from this gem.

I rarely recommend investment books here. But if you can get your hands on a copy, you will be doing yourself a great favor. It puts a lot of things into perspective, makes you understand that nothing is fucked up or special about our times in the market. Wall Street always has been and always will be 1.0, the same characters pick pocketing one another, running scams, playing the game.

Many have made and lost fortunes. I can tell you first hand of fortunes that I’ve made and squandered, some are embarrassing to talk about in an age where the internet stock market coach reigns supreme. The truth is, we’re all subject to bad days, weeks, months, even years. I’ve been able to last this long because I’ve been able to adapt. But I haven’t been adapting quick enough the past two years. I’m pretty sure the Fed put has messed with my way of thinking. In the past, if a market looked bad, I took action to hedge or get defensive. But ever since the Fed has intervened in markets, I’ve adopted a perma-bullish position, one that has paid off handsomely since the lows of 2009.

Right now I am undergoing a project to document my missives from 2007-2009, to consolidate my real time posts into book form. I am not doing this to boast about my trading, but to document the anxiety and conditions that existed back then. The unique thing about blogging, as opposed to writing a book, is the fact that it is done in real time. Back then I went through a metamorphosis from bullish to bearish. I had to adjust to the times, else get eliminated from the game. I think my work from 2007-2009 is probably the most important thing that I’ve done since starting the site. That period was somewhat unique and future generations of traders could learn a great deal from what I had to do to survive, despite my prose being somewhat juvenile and abrasive.

Going over my work, I can clearly see that I’ve matured a great deal since then. If you think I’m bad now, you should read the crap I was talking about in 2008.

I’ll keep you fine gents updated on how my project progresses.