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
21,146 Blog Posts

Are We Priced In?

Usually, prior to a Fed decision meeting, the markets flatline. However, as you can see, optimism, coupled with good earnings at [[LEH]] and [[GS]], is catapulting stocks higher.

The conundrum: “is the rate cut already priced in”?

For the day at least, I believe there is 200 points of foamed mouth upside, with 400 points of downside. Incredible volatility makes everyone nervous.

So, with those odds (at least in my head), I will take a shot and short stock, up at these levels.

No matter what the Fed does, DO NOT execute any trades, until 3:15, unless you’re into gambling. It’s okay to do something prior to the meeting. However, immediately following, often times there is a lot of misdirection at play.

With my money, I am buying [[SMN]], [[SRS]] and [[DGP]].

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Go Eat a Sandwich

Pardon me, I’ve been in meetings all morning. I come back, much to my chagrin, the market is up like a thousand points. What the fuck?

Taking a quick look, I can see [[GS]] and [[LEH]] posted good numbers. However, it’s worth noting, LEH lost 5 billion dollars under management for the quarter. Nonetheless, both stocks are off to the races. I will not touch them.

What really perplexes me is the fantastic run in [[BSC]]. I mean, isn’t that bitch going out at 2 bucks? Something isn’t right. Right off the bat, my default reaction says people are gambling fools.

In general, the market is gapping higher, thanks to a short squeeze. My guess, once the Fed announced their decision, we will sell off.

However, should that fucker really lose his mind and cut by 1%, there is a remote chance the market will close up 500 points plus. So, whatever you have in mind, be careful.

My approach is to wait out the rally, then pounce on a few of my favorite losers, like short [[FED]] or long [[SMN]] and [[SRS]].

In short, playing the market requires patience and conviction. It’s very easy to get scared one way or another. Luckily for “The Fly,” he drives a plutonium powered time machine.

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Bottom Dreamers

Go ahead, keep on buying. As far as I’m concerned, today was a very bad day for the bulls. We need a flush-out. This was not that.

Erroneously, the asshats in charge were propping stocks higher, as if it will stop the melt down. It will not.

The crisis is in full motion and it’s too late to stop it. I compare it to a runaway train, with no brakes, heading for a dynamite factory. An egregious train track blueprint, indeed.

Tomorrow, I suspect the buyers will claim, ad nauseam, that today was the bottom—thanks to a high vix reading.

Look, I’m not saying we are heading for total collapse. All I’m suggesting is the financial crisis is far from over.

Despite today’s Dow run, “The Fly” was up 2.66% on the day.

Top pick: Short [[MOS]]

Stolen from: Barry

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Cramer Appears to be Lying

Wow, talk about spinning his [[BSC]] comments to his favor.

He’s been recommending purchase of BSC since $95, immediately following the Fed’s 75 bps cut. He was so far out there, vehemently recommending BSC: he even suggested that foreign bankers would be burning the mid-night oil—trying to outbid one another for Bear’s assets.

Now, in a shameless denial, Cramer is saying he suggested to “keep your money” at Bear, not the stock—but the firm itself.

Come on Jim. You have to be kidding me.

The main concern was not the guarantee of assets at Bear, but the stock price itself. I mean, I’m sure some people were concerned and started pulling money out. But, generally, people ask Jim for stock advice—not solvency issues.

It appears, someone is scared of that Drudge headline.

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A Source of Funds

Believe me, Wall Streeters are hurting today. May of my colleagues keep a large part of their life savings in the company’s stock they are loyally employed to. Look around, from [[MS]] down to [[TWPG]], it’s carnage.

This, as you know, serves a severe psychological blow to the managers of assets, those who balance risk for pension funds and retirement accounts.

So, what sector will get hit next?

I can tell you, with a high degree of certainty, the ag plays will get their comeuppance. With portfolio’s getting annihilated, across the globe, managers will sell their up stocks, in order to raise cash and take a breather.

As you already know, my largest position is [[SMN]], which gets you short [[MON]] and other basic resource plays. However, I also have short positions in a variety of single stocks, like [[MOS]] and [[POT]].

Personally, I’d like to see the whole house of cards fall. The ag story is over saturated and full of excess. Every loser with a series 7 has been piling into the sector, a key tell of a top.

Fuck all the demand from China and India. At the end of the day, the stock market is about survival. When shits gets blown up, like [[FCSX]], [[IBKR]], [[NCC]], [[MF]], [[GFIG]], [[MGT]], [[PNSN]], [[KCE]], [[CIT]] and [[LEH]], everything is for sale.

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You Go, I’ll Wait Here

Today’s trading reminds of my childhood, growing up in Brooklyn. As a youngster, little Fly had many friends who knew no boundaries. Every day, they’d think up new ways to get into trouble. Whether it was lighting a bag of shit on fire, leaving it on someone’s front door, then ringing the home owners bell or simply sneaking into a backyard to steal a sour apple, from a stupid Brooklyn apple tree, young Fly would always decline to participate (remember my IQ was higher than theirs).

My typical response to overzealous activities was “you go, I’ll wait here.”

That’s exactly what I’m saying to my new Wall Street friends today, who are out in the backyard of mystery, picking a sour apple from the tree of [[MER]], [[MS]] or [[WM]]—trying to pick a bottom.

It’s a fairy tale to believe we walk away from the [[BSC]] debacle unscathed. It is foolishness, at its highest level, to fathom the market will bottom here today, because [[JPM]] ripped off 14,000 employees from Bear.

With my money, I will continue to buy gold, via [[DGP]], short commercial real estate, via [[SRS]] and short basic resource stocks, via [[SMN]].

In addition, I will continuously sell short the shares of [[FED]] and [[DSL]], until they hit zero.

Take a look at [[NCC]] today and tell me if you have faith in our financial system.

While it’s true, dumber people than me may temporarily prop the market higher, via erroneous buy orders. However, “The Fly” is here to tell his loyal readers, when your broker calls you up to suggest purchase of stock, declaring “this is the bottom,” just know, it’s a flaming bag of shit he is attempting to leave on your front door.

Don’t you dare step on it.

Next Shoe UPDATE: [[MF]] is being ax murdered. No news, so far.

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Emergency Asshat of the Week Award: Jimmy Cayne

It doesn’t get worse than Jimmy “Crack” Cayne, when it comes to managing risk, does it? This man, James Cayne, was President and CEO of [[BSC]], since 1993. He is the guy who fucked Bear, plain and simple. When the whole subprime mortgage crisis hit last summer, Jimmy was playing golf—instead of guiding the ship.

As a matter of fact, I think Jimmy was teeing up often, for a very long time, while the internals at the storied investment bank, Bear Stearns, rotted from within.

Think about all the men and women, who worked at BSC or not, that had a large part of their retirement accounts wrapped up in the stock. What happened this weekend, BSC being “bailed out” for 2 bucks, couldn’t have happened without the irresponsible stewardship of Jimmy “Crack” Cayne. No doubt.

Words cannot express how much Jimmy deserves this Asshat Award, so I’ll just shut up and give it to him.

Congrats to Jimmy “Crack” Cayne, Destroyer of the 401k plan—winner of the Asshat of the Week Award.

NOTE: While it’s true, with today’s JPM-BSC “deal,” Jimmy stands to lose about 1 billion dollars, much of that is offset with this here Asshat Award. A lucky and blessed man, indeed. Congrats again.

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Welcome to the Crash of 2008

[[BSC]] going out for 2 bucks per share? Whores from the Bronx go for more.

As a result, ALL banks have to marked down considerably. Monday may be the worst trading day in years. Unless of course, the great bearded one comes swooping down in his gunship.


UPDATE: Gold is soaring, more than $23 an ounce.

ROFL UPDATE: The Fed just cut rates. On a fucking Sunday evening, mind you. Nothing screams panic more than a Sunday evening rate cut.

SPECIAL DENNIS KNEALE UPDATE: Bear Sterns [sic] shareholders, fear not of losing money. You only lose money when you sell. If you do not sell, you will not lose money. Plus, what’s the big deal? BSC represents like 0.00000000000009% of the market. Nothing to see here folks. Long optimism!

Fly UPDATE: Fuck a horse, Dennis Kneale.

$2 per share questions: I wonder how the negotiations went? I mean, I’m sure the BSC fuckers thought they’d fetch more than $2 per share. I bet the [[JPM]] players were like: “yo, check this out, son. I’ll give you 2 dolla’s for your company. Take it or leave it.”

Naturally, the BSC nerds were like, “come on guys, we need more. Our wives will leave us, for making a mockery of ourselves. How about where it closed on Friday—$30, please?

As you can imagine, the JPM ballers were like “what the fuck did you say to me, fool? Don’t make me jump over this conference table and cold smack you with the “qwerty” buttons of my blackberry. All we gots for you is 2 dolla’s, in stock that is. No cash.”

In my head, that’s how the JPM-BSC negotiations went.

Time Machine UPDATE: Sift through the iBC commentary of BSC, over the past few months. Quite accurate.

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