Fuck Oil

There is some serious margin compression taking place in the oil sector, especially in the refiners. With oil wounded like a sick dog, down at these levels, I want to increase my short exposure to the space.

I know the whole dollar argument and the possibility that inflation may reemerge its ugly head. To hedge inflation, I am shorting treasuries, via TBT. However, I feel extremely comfortable shorting the like of XOM, CVX and COP, up at these levels.

When you narrow it down to marginal players, like HK or GMXR, one can make an argument for a total loss in those names, eventually. I mean, if financing is unavailable and margins are squeezed to the bone, what do you have left?

I’ll tell you what you have:

XOM buying your capped wells in bankruptcy.

At any rate, like I said earlier, I reduced my downside exposure this morning. But, at the present, I am 100% balls to the wall short crude/gas stocks, via DUG and ERY.

Fuck them.

Okay, I am done shuffling shit around. You should see me trading. I’m like Bernie Maddoff, minus all the lying and fraud and shit.

I accomplished a variety of things, such as:

Selling the rest of my TNA position.

Taking profits on SRS.

Taking profits on some FAZ bought in the 30’s.

Hedging the remainder of the FAZ position, which is still sizable, with FAS.

Selling some ERY, for a quick trade.

Buying back some of the ERY, that I sold for a quick trade.

Selling out of some losers longs, like BDK.

Adding to dice rolls, like CBL.

Essentially, the short term direction of the market is anyone’s guess. Who knows what kind of bullshit bailout news might print this afternoon, or Sunday evening. The smart thing to do is play it safe, with a bias to the downside, in my opinion.

The retail season will be a woeful one, with retailers set to close stores in droves. It is estimated, following the Christmas season, up to 125,000 store fronts will be closed. Can you imagine the impact that will have on commercial RE? Without a doubt, at some point, SRS is a keeper.

On the long side, you want to be careful here too. By no means are we out of the water and the indices may fuck you hard, towards the end of the day. I don’t know about you, but I am sick and tired of dealing with the daily grind.

It may be that time of year to just shut it down, celebrate a fantastic year, amidst the rubble, and start to enjoy the holiday’s.

UPDATE: I bought 5,000 TBT, just north of $44.

The news is too toxic right now. On one hand, there is a possibility for some staggering downside here. On the other, there is a chance for a classic asshole dip buyers rally.

Bottom line: If you are short, you may want to cover. If you are long, you may want to hedge. Going into the weekend, you do not want to have too much risk on the books.

NOTE: I will be busy trading all morning. Just know, I will be balancing out to reduce risk.

UPDATE: I took profits on SRS, north of $100 and ERY, north of $41.50.

UPDATE II: I added to my CBL position. And, I sold out of some of my FAZ, which was bought in the mid 30’s.

UPDATE III: I balanced out the remainder of my FAZ with some FAS, with a slight bear bias. However, I may sell the FAS on an intra-day bounce. I sold out the remainder of my TNA. And, I sold out of my BDK. Essentially, I took profits, hedged my portfolio to almost neutral again and have a ton of cash on hand, ready to put it to work. I also sold half of the ERY I bought yesterday.

Today you fuckers will learn, once again, never to fuck with the guy in the time machine.

Developing…

Talking to my consultant contacts (some high up guys), they tell me their clients (Goldman Sachs, Smith Barney, Merrill Lynch) are being gutted. They tell me, JPM is way overstaffed and need to feel the ax, in a pretty egregious way. Mind you, these are the guys that would tell the guys at JPM to put the hammer down on the work force.

If you live in NYC, prepare for some pretty dicey shit. Now, I’m not talking ordinary pullback, walk in the park, get a quick blow job, type of recession. I’m talking investment bankers becoming cab drivers, renting a studio in Hell’s Kitchen amongst the rats, type of hardship.

If NY State gets 31% of their revenue from banks and insurance firms, tell me, where will they generate revenue in 2009-2010? The garment industry?

This Madoff scandal is going to leave a serious dent. Who has exposure? Who is going to eat the large sausage on this one?

Then we have the GM crisis. The GOP has nothing to lose. They are going to shoot this fucking bailout down, in an effort to appeal to the current “fuck the bailouts” mentality that is sweeping the country.

You know, I heard a staggering stat the other day. If you count all of the money the government has doled out during this crisis, it equals approximately $100,000 per U.S. citizen. Call me fucknuts, but I think sending 100k to every American would have stimulated the fuck out of this bitch, as opposed to just giving it away to some asshole CEO, who will horde the cash and/or dump it into treasuries.

Bottom line: There is NO FUCKING WAY this market starts goose stepping higher, in 2009. This is not a one year, recession is over, ha-ha funny, sort of situation. The cycle we find ourselves in will last a long, long time. Earnings will continue to slump and equity prices will underperform for years to come.

Low ball estimates on the S&P for 2009 were at around $65 p/s, when oil was trading at $75. Let me tell you, at $45 per barrel, you can look for earnings for the S&P to register in around $50 for ’09. We need to bottom out at 10x earnings.

You do the math.

[youtube:http://www.youtube.com/watch?v=eg-HAGgAybE&feature=channel_page 450 300]

You fucking clowns are simply vomiting on yourselves right now, long in the tooth, following a classic bear market rally. What did you think, we’d go up forever?

As discussed early this morning, “The Fly” nailed the top in the oils, selling his ERX into the fervor and buying ERY into the fire. As a result, he (“The Fly”) is now roaming around his office, fully robed, egregiously sandaled.

My largest position, FAZ, is sprinting higher, as well as my other inverse etf’s, namely SRS. My feelings, as always, is to murder all of the bulls, stuff them in a back of a caddy, then bury them somewhere upstate NY—goodfella’ style.

See folks, life is not about being herded with dumb people then winning. Life is all about taking the high ground, then mechanically sniping fucktards who are traveling in the herd below.

Top picks: FAZ, ERY, UNH

Here is a clip of the CEO of JPM, Jamie Dimon, demonstrating to officials at the Treasury what he will do with TARP funds. Truly enlightening.

I bought 5,000 ERY, sub $35.

Disclaimer: If you buy ERY because of this post, in the year of the pig, menacing armies from the east will afflict irreversible damage to your nations treasury, amidst the black smoke, you will choke. And, you may lose money.

I sold 20,000 TNA, north of $31.