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
21,323 Blog Posts

Non-Position Update: CIT

Another financial eating pavement.

CIT CIT Group takes liquidity action, announces it is drawing upon its $7.3 bln in unsecured U.S. bank credit facilities (7.94 -3.70) -Update-
  Co announces that it is drawing upon its $7.3 bln in unsecured U.S. bank credit facilities. The co will use the proceeds to repay debt maturing in 2008, including commercial paper, and provide financing to its core commercial franchises. Over the near term, the co will continue to actively seek additional funding sources, as well as explore and execute on the sale of non-strategic assets and/or business lines. “Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies. It provides us with added flexibility and ensures that our clients have the financing they need to operate and grow their businesses successfully. We are actively positioning CIT to maximize value by optimizing our business portfolio and sizing our company to market conditions.” Co will host a conference call at 4:00 PM EDT today. (stock is halted)

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Take Profits

Now this market reminds me of the NYC street hustlers, who perform card tricks, such as “follow the bee.” The object of the game is to watch the street hustler shuffle three cards, right in front of you— on a milk crate, and identify the card with the bee on it—whenever he decides to stop “street shuffling.”

Ten out of ten times, you will not find the bee. However, if you are just playing for fun, with no money, often times the “kind street hustler” will let you find the bee, in order to lure you into a money game of course. The moment you put down 20 bucks, no bee.

Well, not only does this market remind me of that egregious game, it is making me want to play without money.

Seriously, over the last 4 months, I’ve made more than enough to take it easy and work on other things. There really is no point in pressing my bets, since the markets intent is to try to take my money, via shifty street hustlers.

More on this later.

Anyway, with a decent Philly Fed number, the market is, once again, melting up. As you know, this is the last trading day of the week and we are one week away from the end of q1. Basically, anticipate a lot of window dressing and foolishness.

Take some profits and walk away from the milk carton.

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Late Night Thought

Ever so quietly, the Chinese stock market has crashed!

UPDATE: For those of you who like March Madness bullshit, go join Dpeezy’s (King of the PG) iBC tourney.

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Lights Out for the Bulls

The silence from the CNBC hatfuckers is deafening. No more Charlie rumors or Cramer bottom calls, just plain ol’ vanilla murder.

As you know, “The Fly” was early to short the “ag plays.” Quite frankly, I spit on “global growth” and demand from China and India. Anyway, as a result of my time machine investing style, I was up 8.1% today.

That’s right. In one day, I just murdered your entire YTD returns. With today’s gain, I’m pushing on 40%. Keep in mind, we are talking a lot of money here, not your bullshit 5 figure e-trade account.

All day, rumors were rampant, regarding [[MER]] fuckery. There is massive put buying taking place and the stock is out of control down.

With my money, I want to lean on weak banks/asset managers here. My short list includes: [[FED]], [[DSL]], [[CLMS]], [[MER]], [[WM]] and [[LEH]].

I’ll have you know, LEH trades to the 20’s, short term.

Finally, with clearing firms demanding less leverage at hedge funds, get short the ag and oil sector. All of those hedge fund idiots have been long [[POT]], [[MOS]], [[CF]], [[MON]], [[DE]], [[AG]], [[BG]], [[XOM]], [[SLB]], [[COP]], just to name a few. They have “ag plays” coming out of their ears.

The sell off in commodity related stocks has just begun. To hedge my short bets, I’m long [[DGP]].

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Non-Position Update: CLMS

It appears the “clams” from Calamos are in deep shit, via auction rate securities.

Calamos Asset seeks to refinance auction-rate preferred stock issued by closed-end funds (15.11 -0.74)
  Co announces that it is seeking to refinance the leverage on the five Calamos closed-end funds that have issued auction-rate preferred stock. The co is in discussions with a variety of market participants regarding new debt financing to refinance a portion of the A.R.P.S. Within the next several weeks, The co intends to begin announcing ARPS refinancings, subject to necessary approvals. “The recent decision by major broker-dealers to withdraw their support of auctions and the resulting failure in the auction rate market has created uncertainty for both our preferred and common shareholder… With our announcement today, we are looking to begin to restore liquidity to our auction rate preferred shareholders and confidence to all Calamos closed-end fund shareholders… At a time of unprecedented developments in the credit markets, we nevertheless continue to believe that leverage for our closed-end funds is beneficial to our common shareholders. At the same time, we recognize that the lack of liquidity has created both uncertainty and frustration for our preferred shareholders. We ask our valued clients for their patience as we aggressively work to address their concerns and restore liquidity by developing and securing alternate forms of leverage.”

In other auction news:

Over 75% of auction rate securities sales fail Wed – DJ
  DJ reports over 75% of public auction rate securities up for re-sale failed Wednesday, according to a document provided by a person familiar with the situation. Out of 255 securities on offer, 192 failed, the document showed. This is compared with 182 auctions failing out of a total of 231 on offer Tuesday.

via Briefing.com 

Odd, no?

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“The Fly” is Winning, Again

While I sit here, gingerly sipping on a cup of tea, I am winning. I’m happy to report all of the erroneous losses from yesterday’s melt up have been erased, and more!

Thus far, thanks to my “calculator brain” and efficient money management methods, “The Fly” is up a staggering 6.5% today.

Regarding the market, it is a triple sell. Sell, sell, sell. Sell, sell, sell.

Once again, Cramer’s scurrilous “this may be the bottom” call from last night has been “deballed.”

This is the worst case scenario for the bulls. After a big up day, it’s important to have a decent follow through day or moderate down day. But today, geez, this is just carnage. We are throwing up yesterday’s gains, at a profuse (and alarming) rate.

To sum things up: Fuck this market. Fuck [[LEH]], [[MOS]], [[POT]] and long live “The Fly.”

Oh, by the way, fuck all of “The Fly” imitators. You know who you are.

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Commodities Unraveling

Ultimately, the end of the commodity run is in the best interest of our country. The speculative run up in commodities has trickled down to finished foods and is hurting the consumer. As you know, the price of gold has served as a hedge versus the declining dollar.

At least for now, some of the speculative excesses are being bled out of the system, led by big drops in [[GLD]] and [[USO]].

Personally, I own gold, via [[DGP]], to serve as a hedge against my ag shorts. However, compared to my [[SMN]], [[POT]] and [[MOS]] short positions, DGP is nominal.

In no way do I believe the the dollar is a buy here, quite the opposite. If you want to take advantage of this dip in gold, it makes sense to hedge it with an SMN purchase, which gets you short some gold stocks.

Best case scenario for the bulls: commodity prices collapse, alleviating the inflationary pressures on the economy. As much as I would like to believe that, it is likely this dip is just an ordinary pullback, prior to hitting new highs.

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Fly Sell: LEH

I sold short 3,000 [[LEH]] @ $44.75.

Disclaimer: If you sell short LEH because of this post, Jamie Dimon will buy your largest position for 2 dollars. And, you may lose money.

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