UPDATED: Live Blogging the Recession of 2008

12/13/2008

8am- Woke up early this morning, in order to drape the house with Christmas lights—which, incidentally, I have been putting off. Mrs. Fly is not too happy about the lights not being on the house, nor on the front lawn..  I will be getting the ladder, ample supplies of coffee and the “blue radio,” which I found hidden in the garage. Wish me luck.

11am- Boy was it cold outside. I finished putting the fucking lights on the house and nearby killed myself doing so. I saw my neighbor Steve. He does not appear to be doing too well. The recession has him down, literally.

12pm- I searched the internet and people are still stupid. All is well. I will be heading out for some Christmas shopping today, somewhere in Northern New Jersey.

1pm- I Just got a call from a buddy at Morgan Stanley. He’s been shitcanned and needs to find alternative employment. I suggested he become a cab driver and to move from his house in Scarsdale, for a run down studio apartment in Hell’s Kitchen.

2pm- I started “live blogging” the recession of 2008. After this post, I will head out into the cold, grim world of retail.

12/14/2008

12am- After bathing and putting the kids into bed, after a long day of shopping, much to my chagrin, I found gas leak in my heating unit. While I sit here, waiting for National Grid to arrive, I can tell you the New Jersey shopping scene is quite brisk. Men are walking around, dressed in white robes, smoking pipes and making their servants fetch 100 inch flat screen televisions.

The women are fat as hell, buying themselves Christmas presents and getting the kids stuff too. All in all, I saw vultures at Walmart and Emperors at the local mall. Wagons were bumper to bumper and parking was nonexistent.

Without a doubt, the pending depression that everyone talk about is nowhere to be scene, in these egregious neck of the woods. I tell Mrs. Fly all the time: “No one has money. It’s all credit card purchases.”

She never believes me. Her theory: people in the tri-state area are all rich and never in need of surplus currency.

My guess, people went on mugging sprees, just prior to entering the mall. Or, many of the people at Walmart just hit the lotto, or some shit.

However, I will say, at my local mall, everything inside of Macy’s was 50-70% off. The cashiers told me things were okay, nothing to rave over.

All in all, the shopping at Walmart was frenetic, while the mall scene was your standard holiday “get me the fuck out of here, it’s too busy” type of venue.

[youtube:http://www.youtube.com/watch?v=skV5N4hN2qo 450 300]

Fuck this shit. I sold 50% of my FAS, for a quick $1.50 profit. I’ve been blogging like the wind, mind you, all for naught.

Here I am, dressed in an unprecedented “Golden Robe,” matched with cast iron slippers, expecting some sort of monumental day—considering the GM/Maddoff crap—and I get nothing. Absolutely nothing.

Blah.

Ecuador just defaulted on their debt. Venezuela and Argentina are next. Yet, here we are up a smidge, going into a glorious weekend. Aside from the stupidity of it all, this is very bullish behavior.

Any analyst worth his water must downgrade XOM and companies like her. Goldman and Merrill both are suggesting crude will trade down to $30, yet XOM has 6 strong buys and 4 buys. Aside from what you think will happen to the price of crude, the analysts think it goes lower. With that logic, they MUST downgrade XOM to conform with their new bearish position.

ERY and DUG will benefit from such egregious actions.

The whole auto bailout business is nonsensical. If GM, F, HMC and TM are cutting back on production, don’t you think that will hurt their suppliers? The brains of our elected officials are very small, much to my chagrin.

At the end of the day, I came out a champ, amidst The Maddoff Jerkoff. I even made money on my dice roll: CBL!

Bottom line: we should trade a lot lower from today’s closing levels, wherever that may be. Time is working against those who are long and I intend to kill these people in the weeks and months ahead.

Wish me luck!!

UPDATE: Nibbling at SRS down here, sub $81.

Place your bets, riverboat gamblers.

I bought 3,000 SMN, a touch under $68.

Disclaimer: If you buy SMN because of this post, you will become addicted to the stock market and develop a minor case of hypertension. And, you may lose money.

No use fighting this fuckery. It’s hard to ignore intraday reversals like this.

As a result, I bulked up on more FAS and will trade no more.

Oils are reversing here and following the banks higher. Who the fuck knows why? All I know, the market is batshit crazy and I’ll be damned if I let it torch me.

Thank God I sold SRS. However, if that fucker gets in the 70’s again, I shall and will back up the truck. All in all, I’ve lost my patience trying to make sense of this market. I’m much better off trading in and out like a fucking dodo bird with a laptop, than trying to stick with a theme.

How is GM up? The Congressman said their would be “pain” for equity holders, in the form of dilution. This makes no sense.

Off to eat a sandwich.

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…