18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,001 Blog Posts

The Important Matter of Inflation

I just got back from dinner. I had a grand ol’ time, with grilled steaks and potatoes to nosh on, while drinking excessive amounts of Bordeaux.

I lived it up, mind you. While at dinner, “The Fly” exclaimed (using a hand gesture): “2 1/2 inch rib eyes for all,” as if they grew on trees. At this small, but high end, restaurant, people referred to me as “The Santa Claus of Steaks.”

Being in a generous mood, I ordered several rounds of poor people beer, for the wolves at the bar. I even let my guests order a giant chocolate cake for dessert.

Feeling good, despite recent market chro-bars to the cranium, I was pleased to be tagged “Santa Claus of Steaks,” being that everyone seemed so hungry at this restaurant.

However, and I do mean however, once the bill came I was somewhat vexed. The grand total for my charitable acts amounted to an absurd $1,333.06.

I shouted to the waiter: “How dare you approach me with such lies. If this were medieval times and I were King, I’d have your head removed from your neck for such an affront. Go fetch me another bill.”

The young waiter replied: “Yes, Sir,” and went to discuss matters with his manager.

Feeling as if I had just defeated this young aspiring actor, I ordered another round of whiskey for my party. Things were looking up, yet again.

However, and I do mean however, this young insolent fool re-approached my table of “steak and honor” and handed me an even more egregious bill.

He exclaimed: “So sorry, Sir. I forgot to add our 25% gratuity. Your new bill is $1,666.33. Will you be paying with cash or credit”?

I stood up with great emotion and determination, stating: “What’s the meaning of this? I demand a thorough explanation. I’ve been a customer of this shit house for 10 years. I’ve never had a bill so erroneously high.”

He shot back, with a sarcastic tone to his voice: “Inflation.”

Feeling defeated and desperate (I cannot believe what I’m about to tell you), I replied: “But, but Dennis Kneale says inflation is a figment of my imagination. It’s backward looking after all. I refuse to acknowledge your costs.”

By then, people throughout the establishment were looking at me strangely, with the exception to the wolves at the bar—who encouraged me to “punch him (the waiter) in the fucking face.”

So, being the man of honour [sic] that I am, I paid the bastard of a bill and “accidentally” broke a few glasses, prior to leaving my “table of steak and honor.”

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Off to Dinner

Oooh this fucking rally has infuriated me to the point of sheer violence. Throughout the day, I broke two monitors, threw 9 bagels at my trader/servant and severed the photographic heads of 22 Gasparino pictures.

Sure, shit is bullish for the markets. We have gapping oil, wheat, corn, soy, natural gas, heating oil and sugar prices. We don’t need any of that shit. Just as long as [[ABK]] and [[MBI]] can get some love from the BANKING FOOLS, everything is sweet—like golden creamed corn.

Personally, I could care less about new home starts or “growth” in the economy. Frankly, I’m perfectly content with poor people living their pathetic lives out in dire boredom, subject to repetitive [[WMT]] “shopping sprees” and vacations to [[SIX]].

With the money I stole back from the homeless guys from yesterday, I will stand tall and sell to lowly people, like Dennis Kneale or James Cramer.

I could give two shits and a gay goat about your fucking charts or “new breakout plays.”

“The Fly” has his own agenda, which doesn’t include having his head lit aflame in erroneous [[SRS]] or [[SKF]] positions.

Until my ridiculous, but definitely pending, revenge punches out the teeth of Sam Zell, when dining out, I will send back the first dish served, in protest of this egregiously poor recession, telling the waiter: “Go cook this with more fervor. Next time I will not be so kind.”

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Bulls in Charge, For Now

Sometimes it’s helpful to take a step back and be objective, regarding the market. Unfortunately, I’ve been on the wrong side of a trade or market, numerous times, throughout my career. What’s important to understand, when positions are going against you, is the reason why you hold them (positions) in the first place.

And, when initiating or building those positions, make sure you have ample cash reserves to buy cheaper—just in case you’re wrong.

Personally, the last thing I want to do is admit defeat, sell my losers and succumb to “what’s working.” However, many times, that’s exactly what should be done.

For example: I should have sold all of my [[AAPL]] a long time ago. The stock has been a bowser in 2008 and has been a significant drag on my portfolios. Instead, I should have put the money to work in oil/natty or something else worth the fucking paper it’s written on.

With regards to my current short positions:

Rational people would suggest to run for cover, since the bull is back and the sellers have no balls. For now, sitting on top of good year to date gains, I will give myself a little more rope to hang myself with, while eagerly awaiting this run to fizz out. Keep in mind, I believe the market will be down between 10-15% this year. Being down a mere 5% (YTD) on the DOW doesn’t scream “fucking value” to me. Considering the 450 point run, in three days, I feverishly suggest selling twice over.

With that being said, doing my screens, I’ve come across a good list of stocks that are working (today)— and a few that are not.


Good: [[BX]], [[FCSX]], [[FIG]], [[MBI]], [[JNS]], [[TROW]], [[COF]], [[C]], [[LEH]], [[ABK]], [[FMD]]

Bad: [[ABK]], [[RMG]], [[SDA]], [[ICE]], [[RJF]], [[GS]]


Good: [[RSH]], [[M]], [[MSO]], [[BID]], [[AZO]], [[SHLD]], [[KCP]], [[BEBE]], [[BGP]], [[GES]], [[COH]], [[ZUMZ]]

Bad: [[KSWS]], [[LULU]]

Food and Beverage:

Good: [[LNY]], [[JBX]], [[BWLD]], [[TXRH]], [[ABV]], [[DRI]], [[HANS]], [[DPZ]], [[PZZA]]

Bad: [[COT]], [[GAP]], [[BAGL]]


Good: [[NTG]], [[TSO]], [[DWSN]], [[STP]], [[CHNR]], [[PQ]], [[DPTR]], [[CLNE]], [[ARD]], [[FTO]], [[PDC]], [[CSIQ]], [[WNR]], [[ALJ]].

Bad: [[USU]], [[PKD]], [[NGAS]], [[YGE]], [[GASS]], [[LNG]], [[LDK]], [[TSL]], [[HOKU]], [[NWN]], [[BTU]]


Good: [[TER]], [[CREE]], [[EMKR]], [[ATE]], [[SMTC]], [[SWKS]], [[FORM]], [[INTC]], [[KLAC]]

Bad: [[TSRA]], [[SNDK]], [[SIGM]]


Good: [[NFLX]], [[CTRP]], [[PCLN]]

Bad: [[TSCM]], [[GOOG]], [[BIDU]], [[WBMD]], [[MELI]], [[EBAY]]


Good: [[GWR]], [[ACLI]], [[GBX]], [[OSG]], [[BNI]]

Bad: [[DRYS]], [[EXM]], [[NM]]


Good: [[ERS]]. [[IIIN]], [[PAAS]], [[ROCK]]

Bad: [[ZEUS]], [[ZOLT]]


Good: [[DCO]], [[GRO]], [[CLX]], [[LAYN]], [[DW]], [[MHK]], [[KAMN]], [[VMI]], [[LNN]], [[LECO]], [[EXH]], [[WHR]], [[TEX]]

Bad: [[CRDN]], [[PCP]], [[IRBT]], [[TITN]], [[CSL]]


Good: [[DELL]], [[HTCH]], [[EMC]], [[AUO]], [[TRMB]]

Bad: [[AAPL]], [[RIMM]], [[DISH]], [[NNDS]], [[GRMN]]


Good: [[CNTF]], [[TKC]], [[VM]], [[IDCC]], [[SWIR]], [[MBT]], [[USM]], [[NIHD]], [[VIP]], [[MICC]]

Bad: [[SKM]]


Good: [[FXY]], [[FXE]], [[FXC]], [[UDN]]

Bad: Dollars

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Who Cares?

I bet you thought the market was gonna get its false teeth knocked out today, huh? After all, we are “enjoying” hyper inflation in food, at a time when the economy is contracting. However, the conundrum the bears’ find themselves in is rooted in the “forecasting” camp.

Everyone is “forecasting” a robust second half of the year. Therefore, any news that comes out now is ignored and spit at, by the buyers. These are very intelligent people, after all. Nothing matters, with the marked exception of price.

This whole rally has been wonderfully orchestrated, with fine precision. Shortly, we will hear of a deal to support the AAAA rated [[ABK]]. Then, out of the blue, there will be another deal for AAAAA rated [[MBI]]. After that, Bernanke will shave rates another 50bps and send the bears packing.

Get ready.


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I Just Destroyed Mars

Any pictures of “The Red Nuisance,” from this day on, are nothing more than Hollywood photoshops.



  C Citi’s hits: 15 times $100 mln – WSJ (24.74 )
  The Wall Street Journal reports Citigroup (C) disclosed that traders in its investment bank piled up daily losses of more than $100 mln on 15 separate occasions last year. Those 15 days, which Citigroup disclosed in its annual report filed late Friday but declined yesterday to describe in detail, added to worries the bank’s problems are deeper than those that led to about $20 bln in mortgage-related write-downs last year, the ouster of its chief executive and a sinking stock price. In a statement last night, a Citigroup spokeswoman said the trading disclosure “highlights the volatility that existed in the markets in 2007. There were many days when we saw significant gains, including more than 55 where revenue gains exceeded $100 mln.” In its report, Citigroup gave significantly more detail about its exposure to and involvement with off-balance-sheet vehicles. The figures suggested investors still need to worry about what they can’t quite see on the bank’s books. Citigroup said off-balance-sheet entities connected to it had total assets of $356 bln, compared to $388 bln at the end of 2006. The 2007 figure, however, didn’t include $58 bln in SIVs, assets Citigroup now carries on its own books, which were included in the prior year’s tally. Of those assets, Citigroup has a maximum possible exposure to loss of about $152 bln, compared to $148 bln the previous year. About $14 bln of this potential loss comes from the bank’s continuing exposure to CDOs which analysts fear could be in for further downgrades.

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Maybe “The Fly” Needs a Bailout

It’s a lunatic market. What else is there to say?

Stocks go up, when they’re supposed to go down and vice versa.

One thing is abundantly clear: The bears are a bunch of old pussies, unable to ride a bicycle without training wheels, let alone drive this market lower.

Bottom line: [[POT]] is booking for $200. Retail stocks climb, despite a dead consumer. Bank stocks gain, on the backs of deceased lines of credit. In total, with the exception of a handful of tech names, the market is barely down, year to date.

This is supposed to be a “bear market” with a recessionary economy. However, investors are treating it like 1999 on vitamin B-12 injections—during boom time.

With the small amount of money I have left, I will throw money at homeless men in Manhattan.

UPDATE: The near Godly folks at iNo.com have agreed to give a free subscription, to the winner of the “Final Four” contest, offering two of their paid services for one year—with a total value is $548. Click on the myriad of of iNo ads for details (no, I do not get paid per click). More on this later.

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