Hysterical Drama

For today’s market session, I hired three violinists to play the shit that was playing in the Titanic movie, in order to set the mood. I am drinking brandy, ignoring EVERYTHING Mrs. Fly says to me. It’s as if she isn’t there, a ghost of sorts.

Early going, my losses stand at just 4% intra-day. I said “only” because I expect a great deal to come. However, the problem with selling anything right now is it goes against what my urinal shadows are telling me. So you know, the urinal shadow in the butlers uniform is a NET BUYER of stocks here.

Let’s put something on the table, shall we? Ben Bernanke is a fucktard. As such, I removed his iBC cocaine theme. He does not deserve it.

Hey, as the price of crude collapses, fucking hedge fund managers with vigor, jet fuel prices will drop. With that, airlines make money money. As logic dictates, profits will rise and the stocks will soar. HOWEVER, I am assuming people will still fly inside of airplanes. That’s the rub!

The market is singing beautiful tunes today. It is the songs of horror and desperation, designed by the devil himself. “The Fly” welcomes the end of the global banking system, so that he may begin his life of crime.

Oooooh, as my violinists go into diminuendo, the market is rallying. I need some fucking opera singers in here.

Developing…

Wow, I cannot believe my eyes. I am not just talking about the whoosh lower in futures. I am looking at T-bills trading at a negative yield and TLT north of $122. Euro Libor is at the 2009 highs and European markets are crashing. Moreover, the safe havens have been bombed, namely GLD. In this environment, everything trades lower.

If we are using the 2008 model, this is just the beginning. This crisis will be absorbed without TARP or bailouts. The political will is gone and we’re on our own.

Inflation was never real. I know Peter Schiff and others made millions off scaring people into believing that lie. But the truth is, the Fed can’t print money fast enough to offset the destruction of capital. Don’t take my word for it, go take a look at copper, oil and coal.

Regrettably, I missed this move to the downside. Hindsight is 20/20 and there is no point lamenting over losses. They just happen. As tempting as it is to deploy my 30% cash into this market, I will likely do the opposite. Despite being technically oversold, there are many other factors that take precedent.

This is it. This is the collapse that everyone said would happen. At this very moment in time, while our leaders twiddle their thumbs, the global banking system is collapsing. The only thing that has me scratching my brain this morning is Italian 10yr bonds, actually easing a bit here to 5.75%.

Aside from that, the European banks are way over-leveraged and our economy is in the grips of a deflationary vortex.

Good morning to you too!

I can’t sleep. My “calculator brain” is working overtime tonight, thinking of strategies to fix my situation. The great thing about the market: as long as you have capital, you can always make a comeback.

Looking over my screens, based upon the numbers in front of my face, a wide array of stocks are absurdly cheap. Or, maybe, just maybe, those numbers are lying to me. Like in 2008, had you stepped into names based upon value, you got the Grandfather Clock kicked the fuck out of you, as EPS for the S&P were slashed by 57%.

Let’s get bearish, shall we?

IF we slash EPS by 57% this time around, fair value for the S&P, based upon trough FPE of 13, is 530. That’s more than 50% lower from here, LULZ. So, before you declare the market to be “soooooo homosexually cheap” consider what I just told you. I find my lecturing especially humorous coming from a guy (me) 70% long into this mess. However, I promise you, on a stack of really cool King James bibles, I will repent for my sins against the stock Gods and get my shit together soon. See, if we have 50% lower to go, there is lots of time to get it right. In the big scheme of things, we’re barely down over the past 3 months, like 7%. I piss on 7%.

I hope you realize this market is EXTREMELY OVERSOLD at these levels. I mean, we haven’t been this oversold all year long. So, despite the gloom and the doom, like a fucking idiot, I am expecting a sharp rally and soon.

However, rallies should be sold into, until further notice. These are the things you need to look at, in no particular order.

Italian 10yr yields
Spanish 10yr yields
Earnings guidance at big industrial companies
TLT
UUP
FXY
GLD

If you can figure the shit out above and how they correlate with the market, you will figure this tape out. As of now, they are all showing signs of extreme panic. Incidentally, extreme panic leads to jubilation, as bottom feeders eat the carcasses of those being liquidated via margin calls. Oh, by the way, I know A LOT of people readying for margin liquidation. This is no garden variety sell off. The carnage in the basic materials, a sector heavily weighted by hedge funds, is destroying funds across America–like democrats on capitalism.

One other thing, beware of rumors that will start leaking out, regarding LM, MS and other asset management firms, maybe even custodians like BK and TROW. The credit markets are seizing up and things are about to get real sporty and fast.

Look at these year to date losses in some large cap stocks. Absolutely staggering.

No. Ticker YTD Return Market Cap
1 CX -63.49 5,480,000,000
2 ANR -62.95 7,320,000,000
3 RIMM -62.91 16,010,000,000
4 MT -55.97 32,710,000,000
5 MTL -54.24 7,380,000,000
6 AIG -52.46 42,310,000,000
7 BAC -51.95 70,840,000,000
8 CCJ -50.25 8,770,000,000
9 LPL -49.80 7,210,000,000
10 MS -48.95 33,390,000,000
11 RF -48.28 5,600,000,000
12 WLT -48.01 5,200,000,000
13 RCL -47.95 5,600,000,000
14 LYG -47.93 43,320,000,000
15 VE -47.06 8,350,000,000
16 JNPR -46.48 11,670,000,000
17 NBG -46.43 5,490,000,000
18 SNE -46.23 21,710,000,000
19 C -45.94 83,020,000,000
20 TCK -44.87 25,160,000,000
21 ACH -44.35 9,360,000,000
22 SID -44.14 14,290,000,000
23 GGB -43.67 14,580,000,000
24 TTM -43.54 10,410,000,000
25 FSLR -43.51 8,830,000,000
26 FBR -43.29 7,160,000,000
27 BCS -43.14 29,960,000,000
28 GM -42.76 34,940,000,000
29 NOK -42.75 22,930,000,000
30 TS -42.66 18,940,000,000
31 HPQ -42.52 53,650,000,000
32 NMR -41.85 14,920,000,000
33 LFC -41.49 69,160,000,000
34 GS -41.42 58,710,000,000
35 FFIV -41.06 6,350,000,000
36 PHG -40.89 19,940,000,000
37 F -40.62 41,530,000,000
38 SPLS -40.25 10,540,000,000
39 FCX -40.23 43,420,000,000
40 STI -40.21 10,540,000,000
41 AFL -40.00 17,020,000,000
42 LNC -39.93 6,480,000,000
43 BSBR -39.49 34,890,000,000
44 HST -39.23 7,990,000,000
45 SCCO -39.23 27,160,000,000
46 DB -38.80 36,050,000,000
47 NFX -38.54 6,540,000,000
48 STM -38.54 5,830,000,000
49 TLM -38.00 16,790,000,000
50 CS -37.86 33,190,000,000

Everything is falling apart. The world is burning and the Fed is buying 30 year bonds to lower mortgage rates, yet banks do not lend money to people. So what’s the point?

Bernanke stepped in with a meek $400 billion. Not enough.

The result: massive sell off in equities, crushing everything in its path. The GOP should be pleased now, as this economy is sure to devolve into a devastating depression.

As for me, I did everything wrong. I had over 10% of my holdings in TLT yesterday, but sold to finance a purchase in AG. I am now down 4% in my AG position. My tech shares are going lower, albeit not as much as commodities. Speaking of commodities: they are in a NO BUY ZONE, ever. Expect dramatic eps cuts and wholesale liquidations by hedge funds going bust. The sector is over-invested and the great unwind is going to continue. See ANR, WLT and FCX to see what the great unwind looks like.

I am far from out of the game, still up around 9% for the year. However, this move to the downside is especially worrisome because it is occurring at oversold levels. In other words, we could get a real fucked up sell off soon, firmly placing us in the 4 digit range for the Dow.

Just to recap what I’ve been telling you: pricing in a recession, in my estimation, puts the S&P at 850 to 900. Any rallies should be sold and cash should always be heavy.

Holy shit bonds are soaring now. Be patient, prospective home buyers. You will be able to get a 30 yr mortgage for less than 3% in no time at all.

The initial market reaction is ALWAYS wrong on Fed days. I’ve warned you about this countless times. The news by the Fed was as expected and frankly not enough, in my opinion. However, it’s important to note that Ben Bernanke just outed his cigar on the faces of the GOP.

Fuck you GOP. Ben’s pimp hand is indestructible.

The outlook is bad and you should take heed to the Fed’s warnings. At a minimum, this means no margin accounts or large directional longs bets through derivatives. Eventually, this market is going much, much lower.

However, I am not against a little cocaine induced relief rally either.

For now, I am in a holding pattern, still with 30% cash. Earlier today I added to my AG position. But precious metals are now under pressure, as TLT goes fucking gangbusters to the upside.

Fuck. I should have held it.

Forget about the silly european debt crisis and downgrades of US banks by Moody’s. Do you want to know where the real dangers lie? In case you didn’t know, China.

Look at WLT’s earnings warning today. That is unassailable proof that China is slowing down, drastically. As a matter of fact, do not be surprised to hear about a full fledged collapse in their cardboard economy, and soon. Make no mistake, the materials, led by copper, have been warning you of this reality for months now. Admittedly, I was a bit skeptical. However, after today’s evidence through WLT, I am convinced: we are heading for a most heinous economic downturn.

Clam this, clam that.

The Fed can create inflate. Before QE, monthly CPI was at the lowest in recorded history, at 0.6%. One year later, it was north of 2% But if the buyer of last resort (China), goes offline, we’re fucked.

My minimum cash level is 30%, which is exceedingly high. I intend to bank a little coin in my longs, believe it or not, just prior to selling them for mounds of cash.

Gentlemen, I hope you are dressed to the nines, as instructed (tux, white gloves, cane with ivory tip and top hat). The fate of your country, as well as your bullshit portfolios lies in the balance.

Top picks: AG, LCC, VMW

Rumors are running rampant in Europe, surrounding French banks. There is talk the government is going to force French banks to merge, in order to recapitalize and Qatar taking a stake in BNP Paribas. On that news, French banks are rallying and US futures are climbing.

Goldman upped the price target on AAPL to $520 and Janney lowered the price target on NFLX to $102. Clearly, there is a tale of two cities taking place in America, where the haves and doing exponentially better than the have nots. Howsoever, that doesn’t mean the government is entitled to redistribute capital on behalf of the “little guy.” People who are rich worked hard for their money. They shouldn’t be penalized because the dicksuckers in Congress don’t know how to manage a budget.

I read a story yesterday that the Department of Justice spent $16 per muffin, $10 per cookie and $8 per cup of coffee for their fucking conferences. Really? You have to be kidding me. And then these same assholes come to us and say “we all have to pay our fair share.” How about this, go to Dunkin’ Donuts for your coffee and lay off the fucking cookies and muffins you fat faced hacks. Not only will you save the country money in cookie expenditures (yes, I said “cookie expenditures”), but you will avoid a coronary, leading to even more savings by not having to foot the bill for your hospital expenses.

Mr. 0bama, do you want to create new jobs without spending another nickel? Here is my proposal. Since we all need to pay our fair share, ask your people at the Unions to implement a 20% pay cut across the board, in order to hire skilled American workers. That makes sense, doesn’t it? We all share in the struggle, build a sense of community across the nation. It will be good for the soul.

Into the Fed, I am staying put, 70% long–mostly in tech.

Today was clever. Even though I lost, I do enjoy watching the market do extraordinary things. I am a fan of the stock market first, investor second. Today’s incognito decapitation of the bulls was perfect. They lulled suckers like me into the tape, with headline strength. Slowly, they boiled the clumsy pigs all day in underperforming momentum names. Then at the end of the day they threw down the gauntlet and QWICKLY (NFLX) decapitated all of the bulls, AND MORE.

The S&P showed minor losses, but the damage was far more extensive.

Should that fuckfaced Clam do nothing tomorrow, you’re all going to hell. And, you’re getting Rick Perry’d too.

Nevertheless, sleep well and try not to worry about stupid shit, like money. Eventually, this shit will sort out and we’ll all be rich as fuck, or desperately poor, battling one another for water sources and/or farm land. I went from gains to losses, like a gentleman in the night, tipping his hat to a lady draped in pearls. I didn’t bitch about it like some of you dicksuckers, but behaved in a very dignified and honorable manner.

Tomorrow, for the occasion, I expect all of you to visit iBankCoin dressed in a tuxedo, top hat, white gloves, black cane tipped with white ivory. Failure to do so will lead to your immediate banning.

NOTE: Women ARE NOT exempted from this dress code.

Just 51% of stocks are up today, with marked weakness in commodities and tech. In other words, despite what the indices say, we’re really down today. Many widely held stocks are weak, including some of mine. As the day progresses, tech falls into “QWICKSTER MURDERHOLES.”

Don’t worry about me, pal. I’m in the high income tax bracket, paying for all of your food stamps. If I lose money, I will simply chalk it up to “paying my fair share”, fully supporting the communist regime in America.

In summary, I sold out of TLT, added to VMW, LCC, CIEN, AG, MU and LCC. For the day, I am barely up, grossly underperforming the broader indices. To be fair, I am underperforming HD, but fantastically outperforming shares of NFLX.

True to the game and consequences, I am going into Le Fed day with a 70% long position, reserving 30% cash for market calamities.