THE FUCKING ROBOTS ARE BROKEN

Holy shit I am conflicted between good and evil. On one hand, I want to load up on TVIX and launch scud missiles heading towards the stock exchange, just to see black smoke emanate from Wall. On the other, the contrarian in me, amongst SHOMP, says this is some bubble gum bullshit, nothing to see here but the wind rustling a few leaves.

Here’s what I do know, for a fact: uncertainty is back in vogue and the cocaine addled gorilla with a naked ass hanging out of the limousine is dead. All we have to trade on now is news headlines, which are controlled by complete imbeciles.

Fuck this shit, I am not selling a single share of stock, despite my belief that it’s all falling down. “The Fly” will dine with dignity amongst the rubble.

As I write this news broke that Greece was just kidding, ROFLMAOLUZ! They aren’t really going to call for a referendum vote on the bailout. Instead, they’ve decided to sodomize the Germans for their treasury. Fuck Greece and feta cheese.

Everything is ass-backwards. Generally speaking, I spit on all of you readers who claim market dominance. Fuck, if I can’t get a handle on this shit, none of you ball-shiners are nailing it. None of you.

You know what I’m gonna do? I’m gonna buy millions of dollars worth of silver stocks and prepare to kill werewolves. These government hacks don’t give a shit. Nationalism is dead; therefore, they will extend and pretend via funny money.

Bottom line: gold and silver trade higher.

Policy makers are adamant about creating artificial inflation in order to hedge the real deflation. We have seen their insanity first hand for over three years. Just because Greece is on the verge of collapse doesn’t mean the dollar will remain strong forever. Keep in mind, there is a pecking order to these things and, eventually, US debt will be called into question, just like Italy.

The reoccurring theme that is worth noting is strength in precious metals. The stocks get crushed and come back to hit new highs, over and over again. There is no reason to believe the gold and silver trade is dead, just because they are weak today.

Having said that, I added to my EXK position this morning and bought some ERY. I realize my ERY buy is sort of after the fact. But it is being used as a hedge because I am retarded long a variety of idiot stocks.

In summary, the theme going forward is to buy precious metals whenever my urinal shadows whistle and hedge that with long volatility trades. Additionally, I will be trading in and out of stocks based upon The PPT OS/OB signals, as always. And, should 321 crack spreads firm, I will buy refiners on dips, but not here.

Italian 10 yr bonds are north of 6.3% and Spanish 10 yr yields are north of 5.6%. European banks are down 10%+ across the board. And here I am fighting fucking werewolves, long silver like a fucking paradiddle. I sold my TLT about 8 points cheaper and half of my VXX 20% ago. I am, without a doubt, the angriest man on Earth today. How fucking retarded is this perpetual Greek tragedy? It’s the gift that keeps giving.

In case you are unaware, the Greek government is on the verge of collapse. They are questioning whether to accept the bailout or not and as a result the leader of that ass-fucking nation might resign. This is the worst case scenario for Greece and the EU because it will lead to an unorganized collapse of the Greek economy. They are heading for decades of national poverty.

The MF Global collapse resonates with people because of contagion. They collapsed because they were levered 40:1 on Euro-trash sovereign debt. Now we all want to know, who is next? The result will be a rout in any and all financials. Moreover, the deflation trade is now the only trade that makes sense. Remember, if Italy goes, it brings the fucking world down with it. If Greece is the ass of Europe, Italy is the cock. Pardon the grotesque imagery so early in the morning; but Italy will be fucking people shortly.

How to play it?

Well, go raise cash and get short exposure ASAP, even if it means being wrong. The reason why you short here, at these oversold levels, is because of the possibility of total and absolute collapse. Should that occur, you will be beaten like a baby seal and your skin will be used to manufacture Chinese organic tents.

UPDATE: As discussed here last week, institutions are selling low quality sovereign bonds because of the voluntary 50% Greek haircut, which disallowed CDS buyers to cash in. Think about it: they bought CDS to hedge their bond exposure and and now find themselves fully exposed to a 50% Greek haircut. Is that fair? As a result, Italy and Spain gets sold.

[youtube:http://www.youtube.com/watch?v=rAOJJ15hHhk&feature=youtube_gdata_player 603 500]

I am about to go out for a little trick or treating with the kids, so pardon the brevity of this post.

The end of day sell off is indicative of hedge funds teetering on the brink of liquidation. There will be a tug and pull between underperforming mutual fund managers and hedge fund managers vying to stay in business via locking in profits.

I got suckered out of my TLT position at the range lows. I’ve said it numerous times, 2011 has been a very tricky tape for me and my paltry 16% gains reflect that. Nevertheless, the year is not over and there is plenty of coin to be made.

At the close of trade, I was heavily weighted in EXK, RENN, NFLX on the long side and short EXH and VXX on the short side for a grand total loss of about 0.7%.

Bank stocks are dropping again, as the ghosts of Jimmy Cayne and Dick Fuld haunt the minds of perverted speculators. Just a short while ago, banks were deemed to be “uninvestable.” Now they are all the rage at metrosexual NYC house parties.

When it comes to the banks, all you need to monitor are the shares of MS. They are at the epicenter of all that is wrong with society. When it comes to white shoe firms on Wall Street, no one holds a candle to Goldman. In the event something BIG occurs on Wall Street, you will see it first in the retarded second fiddle shares of MS.

Ahead of the GRPN ipo, shares of GSVC are holding firm. Look at the volume of GSVC and ask yourself, “do the unwashed know about this company?” Without a doubt, the answer is no.

With the dollar and treasuries spiking and commodities getting plugged, I am holding off on any new buys, aside from degenerate Chinese accounting dice-rolls.

Additionally, I still have about 10% downside exposure via VXX and short EXH. I will close out these positions if The PPT flags OVERSOLD.

Parting advice: stay the fuck out of those zombie banks. They’ll eat your brains out and send you packing to Zucotti park.

I don’t give a fuck and I’m not scared of ghosts.

I bought more RENN.

A great degenerate man once said “the fucking charts are lying to me.”

The market is knifing lower and MF Global is “Corzine’d.” Is that a reason to panic? No. However, the market is up about 15% over the past month. Based upon the laws of reason, we should pullback 3-5%. But I am not counting on that shit to happen. Just like the ruins at Puma Punku, logic does not exist on Wall Street.

For the day, I am down 0.25%, thanks to gains in my VXX, short EXH, long RENN, long BORN etc. My silver stocks are getting hammered. But all of that is likely a temporary phenomenon. Remember, I fucking hate stocks and would love to see them dismembered.

At any rate, I would not buy stocks here. Italian yields are north of 6.1%. I cannot justify buying stocks with meatballs under pressure.

I refrained from opining on the EFSF because I know how to comport myself when in defeat. Unlike many of you, “The Fly” knows how to behave graciously when things do not go his way. Whether it be in a game of chess or the acknowledgment of egregious grammatical and/or syntax errors in a self penned manifesto, “The Fly” tips his hat and continues to fight the good fight, as any gentleman of stature would behave.

Having said that, it’s true this stock market is the biggest piece of offal to ever exist amongst mankind. The EFSF bailout is a complete fraud and you will understand this lesson soon, as Italian 10 year yields scream higher. The reason why Europe cannot bail itself out is because there is a nuclear bomb in a box, atop the altar of the Eurozone, and it has Italian words scribbled on it. Some dumbass German guy is gonna open it and the entirety of Germany will be distinguished. It will be quite the spectacle. Moreover, the idea to leverage 440 billion of imaginary money by 500% to purchase Greek bonds is insane. I hope you realize this main hypothesis of mine.

Aside from Greece, Portugal, Belgium, Ireland and Spain need help too. This is a little early, but Turkey is a highly levered economy and will die, soon enough. China is not Santa Claus and Brazil couldn’t care less.

Eventually, these chickens will come home to roost and my original thesis will be proven correct. In the interim, I will play the rape-tape and assume all is well, even though it’s not. It’s clear to me, the “powers that be” have a firm grip in the price action and it would beguile my good name to incessantly call for sheer panic. As a point in fact, I am not expecting a panic. Instead, I am anticipating a total snap and break of the equity arm of this tree of bullshit, all in due time.

Until that happens, stay flexible and as always, avoid those murdeholes.

Not the psychopath political one, but the stock.

I’ve been recommending purchase of it since $20, yet haven’t bought a share for myself. I was going through personal strife, whereby Italian bonds yields infected my brain with visions of dust.

Buying a high end, mall based, retail chain is risky, especially in its infancy. Without a doubt, the high end retailers, COH, WSM, AAPL etc, is where the money is flowing these days, as the 1% continues to denigrate the pathetic, hapless, lives of the 99%. In all seriousness, buying TEA here may lead to a swift decapitation because the stock is gaudily valued.

At 43x 2012 EPS, the stock could easily lose 50%, similar to the pinless hand grenade action in Herb Greenberg’s taste test fav SODA. Nevertheless, all early stage growth companies trade in this manner (rich premium) until they lose credibility. Right now, TEA is being given the benefit of the doubt, despite trading below its IPO price.

Here are the hard facts.

The company opened 18 new stores in the second quarter and intend to open a total of 50 in 2011. By the end of 2011, the company should have about 200 stores, a very small footprint by any standard.

They’ve partnered with Alshaya to open retail stores throughout the middle east.

To date, they have zero stores in China. It is estimated that more than 70% of Chinese favor tea over coffee, making it a prime expansion target for TEA.

Approximately 55% of their revenue derives from the sale of loose tea, while 35% comes from merchandise.

Their same store sales are increasing at a 9% clip, buoyed by a robust e-commerce platform.

Annual sales will be in the ballpark of $160 mill, a 38% increase over last year. Net income will be around $16 mill or 0.43, an increase of 78% over last year.

Here’s the kicker.

Shorts are all over this stock, just like a variety of high growth retail. People simply do not believe in the model, considering the economic vitality of America. Where I believe they are wrong, and will get bludgeoned, is the wide array of expansion possibilities for TEA. This country is ripe for TEA to expand. For more than two decades, SBUX and copy cats have flooded every city with their asshole cafes. The time has come for a change of flavour, if I might be so bold.

Aside from the international possibilities, TEA could easily KCUP their product or even develop their own machine. That’s not the reason why you buy the stock, however. Right now, just 7 million shares lie in the float. On any upside news, this stock will flame higher, fueled by the tinder that is represented in the 40% short position.

The company has $5 million in debt and total liquidity of $35 million.

It’s hard to assign a price target to TEA because it’s so young. Clearly, they can expand in the US by at least another 500 stores and start to rollout TEA cafes, similar to SBUX–if they so choose. In my opinion, the big opportunity is in China. Like GMCR three years ago, there is tremendous upside to a story like this; but you have to be patient when buying the stock. Dollar cost averaging every quarter makes sense, unless the company is proven to be incompetent.

At a minimum, I think the stock can hit $50 by the end of 2012, based on the current trends.