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
23,154 Blog Posts

Fly Short: LFC

I sold short 5,000 LFC @ $45.22.

Disclaimer: If you sell short LFC because of this post, you will believe Cramer’s advice at face value. And, you may lose money.

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Don’t Expect Santa to Bail You Out

I’m not looking for any significant move, up or down, prior to the New Year. We will likely grind lower, as traders call it a year and go fuck themselves.

Thus far, the holiday shopping season can only be described as “a fucking disaster,” with retailers giving shit away—desperate for capital.

With regards to the markets:

There are many idiots tied up in low yielding t-bills, which may begin to unwind itself in 2009. However, do not expect it to happen right away. Bubbles take a long time to pop.

With gains of more than 60% booked for the year, and bus loads of freshly minted coin going into “The Fly’s” checking accounts daily, I find little need to press the envelope here. Methodically, I’ve been selling longs and covering some shorts, in order to raise cash. My goal is to have more than 50% cash by the end of this week, in order to get a ‘clean slate’ going for 2009.

I’m a huge believer in ‘clean slates.’

Also, I will make an effort to unwind most of my inverse etf’s; because they’re bitch of a whores. Again, the CEO of Proshares is a ‘corn on the cocks’ for inventing these ‘tools of terror.’

As you can see, oil is defying the laws of reason and romance, if there is such a thing, via stabbing dollars in the eyes of oil producers. Expect the oil trade to continue on the path of ‘most pain.’ For the most part, I am pleased with DUG, short XOM, short RIG positions. However, I will be selling DUG soon, due to my inverse etf protest.

The ag sector caught some downgrades today. It’s amazing how poorly the classic ‘inflation stocks’ are behaving, post Fed cut to zero. I knew the market would fuck everyone, via marking the classic plays down. Expect that trend to continue.

Finally, bullshit biotech stocks, like MAXY and ACET, have been outperforming. Stay away from that sector, for it is a ticking time bomb that will blow your arms off when you least expect it.

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The Fallacy of Mustard Seeds

If you only look at the positives, it’s easy to think the market is set to explode to the upside. After all, the Treasury is pumping billions, while the Fed is printing trillions. Rates are at all-time lows and corporate balance sheets are in good shape.

However, the same cannot be said about the balance sheets of state and local governments, as well as the individual. See, during the last boom of 2003-2006, corporations were very stingy with their balance sheets, sans the stupid banks. For the most part, they were very conservative in controlling head count and building up inventories. As a result, a lot of companies have fortress balance sheets and will be able to endure the coming downturn.

The exact opposite occurred at the state a local government level. They went balls to the wall, hiring everyone in sight. They wasted money on a variety of pet projects and now find themselves in a very bad deficit situation.

As for the consumer: she’s been fucked for years, only worse now.

So, the whole notion that low rates and free money will make everything better is somewhat idiotic, considering no one will have a job in 6 months. As a point in fact, “Cally-forn-ia” is entirely fucked.

On a worldwide scale, things appear to be getting worse.

Japanese exports declined by 27% in November. TM, for the first time in company history, will begin to bleed capital, a la GM. Russian oligarchs are requesting a 78 billion dollar bailout from their government. And, to make matters worse, their ruble is about to get devalued.

The Chinese growth engine has all but stalled, yet here were are buying stocks.

For the love of gold chains and big rims, it’s Christmas. That’s what we do. For the most part, Americans are a bullish breed, always looking for the upside in things—even in death.

With my money, I’m afraid of getting lulled into some sort of drunken holiday stupor, only to be quickly woken up to the harsh realities of a world in economic decline—come 2009.

My advice is simple.

If I had 100k to invest right now, I’d keep a 30% cash position, 50% short and 20% long. With the 30%, I’d utilize it for intra-day or swing trades, in order to react to an upside tape, effectively stemming my losses. But, the main point is to keep the downside exposure in the majority, since it has proven to be a profitable bet for more than a year.

At the moment, I like short XOM, short KIM, short VNO, short CHL, long C, long UNH and long SMN.

UPDATE: Barron’s, 9/23/1929— The commentary was very bullish, but at the same time cautious. In other words, they wanted the market to go up; but, you can tell they were somewhat apprehensive to go “all in.” Repeatedly, they discussed the peculiar nature of the markets and defaulted to weak arguments, such as “in the long run, stocks will do great.” One big laugher was a recommendation of German bonds.

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2008 was the year of the asshat.

There were so many dicks in 2008, one would think the world was one big dick factory, incidentally, chock-ful of asshats.

There was the likes of Dick Bove, and his insane “buy of a lifetime” call on C, above $20. Let’s not forget he emphatically said LEH would “make it,” just prior to its demise. There was the CEO of Profunds, Mike Sapir, and his fucking lunatic set of 200% inverse/upside IRON LOTUS etf’s, which are kindly designed so that EVERYONE loses.

Fucking asshats!

Let’s not forget Paulson, Kass, Cramer of TSCM, Yang of YHOO, “Dr. Eli Harari” of SNDK, Feder of TTWO, Bernie Madoff, Chris Cox, Spitzer, Fuld of LEH, Ken “hands” Fisher etc. No kidding, I could go on and on.

However, in my humble, yet potent opinion, only one man deserves the Asshat of the Year Award for 2008. Without further adieu, let me introduce:

Bill Miller, Retarded Money Manager, Legg Mason

At one time Bill was a good investor. Fuck all of the accolades that erroneously labeled him a “great investor.” For the love of small microchips and green trees, the market was going up, when he was sucking its dick. However, in 2008, the stock Gods gave Bill a steel pipe to the mouth, taxing his Legg Mason flagship fund by more than 56%, according to the most recent data.

Hell, Bill’s whole family of funds is down in the deep 30-40% range, all because he (Bill) is a large sucker of bank cock, not to be confused with the cesspool in Thailand.

His portfolio is littered with all sorts of stupid shit, from AMZN to C. However, Bill nailed down the Asshat Award for one reason and one reason only: He fucking doubled down on his Freddie Mac position, just prior to it being seized by the government.

Let me clarify. If you recall, at the time Bill “averaged down” in FRE, it was almost a foregone conclusion that the Gov’t was going to takeover FNM/FRE, in order to ‘save the world’ part 20. For the love of nuclear bombs and hydrogen fuel, some of the “smart managers” stepped in on FRE bonds or preferred. But Bill, in his infinite asshattishness, stepped in and bought more lowly common stock.


Despite being fired by pension funds and crushing the 401k plans of millions, Legg Mason is still backing Bill. They must “enjoy” his investment performance, in some sick, distorted, mentally ill manner.

Even though Bill is an extreme asshat, with very little investment skill, CNBC was proud to announce that he called another bottom in the banks, just a few weeks ago.

Prepare for another “legg lower,” if I may be so bold. Get it? HAR-HAR-HAR.

Bottom line: If I am correct about Bill Miller, which I most certainly am, LM is in for a very arduous 2009.

Nonetheless, congrats to Bill Miller for winning the Asshat of the Year Award for 2008; he certainly earned it!

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BEHOLD: The iBC Dictionary

Danny has a perpetual work of art going on with THE DICTIONARY. Feel free to give suggestions.

NOTE: Sunday evening “Santa Fly” will announce of the winner the 2008 Asshat of the Year Award.

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“The Fly’s” Friday Surprise

As I stepped onto the dirty snow, on the way to my destination, a man with a long gray beard accosted me asking for twenty five cents, so that he could “buy some food.” Quickly, I shoved him away, exclaiming “go get a job you homeless bum.”

I entered the building, my destination, which looked like an old widget factory, prior to when workers had rights. The walls were painted dark blue and the ground was covered with grease. A young man, with a 3 day old beard, approached. He asked: “How can I assist you?”

I told him my business and how he could be of assistance. He complied, but informed me that his services would cost a great sum and it may take awhile to complete.

I was anxious and had little time to fuck around with idiots. I shot back: “Fine, but be sure to do it right.”

This was all happening around noon. The streets were covered with snow and crowded with obese people, who were constantly feeding themselves heart clogging slop, while talking on telephone machines. I chose to stay inside of the dreary building, instead of outside where the fat people roamed. After all, I had business to conduct.

There were machines running non-stop and underpaid workers scurrying back and forth, desperate to complete their task. I was amazed by the working conditions, which were sub-standard by any measure, sans the lower income factories in Bangkok.

Four hours passed and the job was not complete.

I approached the boss (Bob) of the operation and quizzed him: “Hey you, when will it be done? I have things to do, you know.”

For ten seconds, Bob ignored my statements. He was busy shuffling through papers and giving orders to his scrawny looking underlings. There was a certain destitute undertone to Bob’s voice, when he barked orders. Suddenly, he responded: “15 minutes.”

Content with his answer, anxiously, I waited in a small cigarette scented room, sitting in an aged Orwellian chair, watching the news of the day on a pre-LCD era tube.

Another hour passed. By now I was fuming with rage. I was checking my telephone machine for messages from work and the condition of my common stock portfolios. Much to my chagrin, the trading day had worked against me, in a very subtle, benign sort of way. It’s the type of day that can kill someone, without him even knowing it.

The greasy door swung open: it was Bob. He said: “It’s done. Follow me.” Obviously, Bob was a man of few words.

Before I had a chance to retort, the greasy door had shut. I opened it and followed Bob, like a dog chasing after a can attached to a bicycle, until he reached his desk.

Bob said: “you are lucky we could finish the job in this weather…”

Quickly, I interrupted Bob and slapped him in his face and roared: “give me my fucking car keys asshole.”

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No More Volatility

For 2009, I will make a sincere effort to cast away all inverse/upside etf’s. They are a disease on Wall Street. They represent everything that is stupid in finance, from the leverage to the asinine ways they are calculated.

While it’s true, being long 10,000 SRS on a 9 point day can be fun; it also can twist your stomach into knots when the opposite occurs, going up. For the love of large intestines and sanity, in 2009, “The Fly” will “go old school” and start short selling individual names directly, rather than through proxies.

Today is options expiration, so expect to get jerked around all day. The auto bailout is a fucking joke and the Treasury is about to steal another $350 billion from the U.S. tax payers.

What else is new?

As you know, I was supportive of the original TARP program. Many of you were against it and you were right. I thought the money would be used to provide liquidity and help the economy get going again. However, thus far, it appears the banks are hording the cash and/or using it for bonuses (GS) or to make acquisitions. And, to boot, there is no oversight. No one really knows where the money is going.

To put it plainly: Paulson and Co. are fucking ransacking the treasury and no one give two fucks and a gay fiddle about it, sans some dick head bloggers.

Into this strength, I want to short a little more XOM and KIM. In addition, into a significant oil charge, I will short more RIG.

The reason why I chose to short XOM, instead of a lesser name, is due to volatility. Shorting XOM, north of $81, represented little upside risk, whereas, shorting a stock like GMXR or NOV could easily rip my face off in a matter of hours.

The play on KIM is pretty straight forward: their tenants are liquidating. It’s just a matter of time until some of the lesser quality REITS run into some cash flow issues.

For now, I’ll just sit here and wait.

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The Days of Our Lives

Unwind, go to cash and enjoy the -40 degree weather outside. I’ve had enough of the market. It’s like one big fucking soap opera, with rescues, panics and ponzi schemes. There are diabolical characters and heroes. Then, there is the innocent bystander who gets hit by a speeding Mack truck. Naturally, the driver is drunk, while doing lines of blow off the dashboard.

I’m selling more of my longs, in order to restock my cash position. Oil and other commodities are in the midst of a death spiral and there you are trying to catch the falling knife. Never catch the falling knife people, unless of course you are buying MVIS into CES.

My coolest position, by far, is short KIM. Within months, I believe that bitch KIM can find herself in a very bad vacancy situation, causing her shareholders to be maligned with greatly deserved grief.

At any rate, my take is to fade this rally. Then, go take a nap, wake up at 3pm, in order to buy a little FAZ into the close— like a rat in a cage made from sweet corn.

NOTE: My UNH is still working.

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Go Eat Some Baked Potatoes

I just finished my 5th round of Christmas shopping, this time at Macy’s.

Everything was marked down 50%, with an extra 20% off, providing shoppers use their stupid credit cards. In the past, I was accustomed to long lines and stupid people at the registers. However, tonight, the lines were short, the cash slaves were smart (probably former Goldman Sachs traders) and the mood was grim.

But nothing beats the depressed nature of TJ Maxx. I went there a few weeks ago and was fucking astonished at what the cash slave said to me, and I quote: “sign up for a TJ Maxx credit card and get a free 2 liter bottle of Coke.”

I couldn’t resist the opportunity to zing her; I shot back: “Are you kidding me?” I continued: “You have no idea how bad it is out there. People are losing their jobs and you’re nuts for offering me 2 liter sodas.”

Shortly thereafter, I was escorted out of the store by Mrs. Fly, who was somewhat embarrassed by my outburst, to say the least.

How does this pertain to the stock market?

Fuck you. How about that?

Dude, it’s like 12:30 am and we have like 2 weeks left in the trading year. Do you think I want to spend my time giving stock picks, in a stupid tape? Please.

Everything is stupid anyway, with moronic red nosed clowns manning the trading turrets, at major shithole banks.. Here a bottom, there a bottom, everywhere a bottom—bottom.

Anyway, I am a huge believer in starting the new year with new ideas, which will lead to quick success. If you start the new year with a bad streak, it can become an albatross around your neck all year. Over the next two weeks, I will unveil my strategy for 2009, along with useless predictions, which is always fun. Furthermore, I will award the “Asshat of the Year Award.” If you recall, last years winner was Angelo Mozillo, deservedly so. Just so you know, I already have a winner in mind. None of you will ever guess who he is.

As for tomorrow:

It’s options expiration, so anything goes. Keep in mind, the bears are weak and old. They do not like to hold shorts over the weekend, since the God damned government likes to cut deals on Sunday night. Into any morning strength, I may slap on a few upside trades, possibly in TNA or FAS.

Or, maybe I’ll just do nothing and eat sandwiches all day long. You’ll just have to tune in to find out what “The Fly” is up to.

[youtube:http://www.youtube.com/watch?v=cM9Axgwx6Gs&feature=channel_page 450 300]

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