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
23,585 Blog Posts

A Special Message From the Dressing Room of Larry Kudlow

I see mustard seeds everywhere. You got to love free market capitalism, despite it not being here folks. I predict a panic buying spree. You got to make love these mustard seeds. They’re great. Folks, you just got to do it.

-Larry Kudlow’s mafia clothes

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Gambling Gets You Nowhere

I’m not cracking the champagne bottles, due to my shorts are working this morning. Fuck, for all I know, this market can spin like a Tasmanian Devil—upwards—into the close.

What I do know: gambling on big event economic data is a suckers play. Sure, from time to time, it’s cool to roll the dice and get on the right side of the trade. There is no better feeling than nailing a controversial pick, no?

But, I must say and insist, gambling in this market is foolish. We’re up too much too quickly to be levering up long, hoping for more.

I remember when the dot com bubble burst in 2000; I believe it was March, to be exact. I knew stocks were ridiculously expensive. As a matter of fact, I was in 100% cash, just prior to the collapse—sometime in April. However, seeing the market go up everyday, watching my colleagues bank millions on asinine dot com ideas eventually got to me and forced me back into the market—just in time for the fucking crash. I was young and overzealous.

I could have been a fucking hero. But, instead, I ended up being like all the other poor losers/saps, getting poleaxed by panic selling. I will never forget those lessons and will punch it into your fucking heads, if you choose to ignore these warnings.

In other news, PALM and DRYS are off to the races. It really is a non-event. They are not leaders. Ignore them.

Let’s talk about important shit:

Oil cracked $40. It cracked $40, despite a weak dollar, because the world economy is grinding to a halt. And, my guess, there are lots of asshole speculators out there who have been storing oil or long contracts, waiting for a higher prices. As the price action deteriorates, those fuckers panic sell crude.

Ignore the eps warning at CVX , if you must. But, there will be many crude warnings to come and cap ex budgets will be slashed. It is a dead sector, regardless of the price of crude. That damage has been done.

There is strength in select banks, like GS and MS. However, if you are long those names, I’d suggest taking a profit.

By the way, the main distributor for HANS, old Budweiser, has begun selling its own energy soda, called 180. This is a fucked up thing for HANS, since BUD places it right next to Monster, on store shelves. I think HANS can be shorted here. However, keep in mind, it is always a takeover play.

Finally, my shorts in XOM, NOV, KIM, VNO and HANS are working well, for now. As for my longs, they are doing poorly. However, with all of the 200 and 300% levered etf’s (SRS, FAZ, DUG, REW, SSG, EEV, ERY, SMN) on my books, I find myself in a rather enjoyable predicament, at the moment of course. Stubbornly, I will hold my shorts until I sense capitulation.

As of now, the market sentiment is still extraordinarily bullish.

UPDATE: More Madoff fun.

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Those were some kick ass employment numbers. For the month of December, only 524,000 people were fired—keeping the national unemployment rate at a lowly 7.2%. And, to make matters better, the November fired data was revised up to 584,000 people getting the ax.

Mind you, 524,000 folks is less than 600,000 and 700,000.

People, I got to tell you, this is great news for the markets. Sure, if you factor in temp workers and other losers, the unemployment rate is about 12%. But remember, Obama is going to print $1 trillion dollars, in order to make new sewer caps and underground pipe fittings.

We’re saved!

Most of my Wall Street buddies, who are recently out of work, will likely take Obama up on his construction machinations and put down their 24 karat commission pens for a nice yellow hard hat.

Hell, I expect the market to punch the life out of the bears today, as Wall Street rejoices and basks in the glory of such a prodigious number.

Think about it: it could have been worse.

With that being said, after enjoying today’s trading session, I’ll be sure to scurry on over to the local pub, with a few of my Wall Street buddies, in order to celebrate this fine number. God willing, we may be able to share our good nature with some blue collar folk. I am sure they feel just as rambunctious, as the coked out money managers at Legg Mason putting in market orders for DRYS this morning.

We’re saved and rally time!

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PPT Stats

Just so you know, “The PPT” will be available for subscription in due time (whatever that means).

Here are is how the engine is reading the market:

Market Overview
Average Technical Score: 1.67 Strong Sell
Average Fundamental Score: 3.64 Buy
Average Hybrid Score: 2.50 Sell

Overall, it is ranking the entire universe of stocks it follows, which is north of 3,200, a “sell.” The average technical score is abysmal, while the average fundamental score is a buy. Basically, should the market confirm a breakout, the “Hybrid Score” will quickly shoot north of “3,” marking it (the market) a buy.

Before Wednesday’s sell off, there were 55 out of 202 sub sectors ranked a buy. However, because of that move, only 1 sector remains a buy, which is Education and Training Services. It is worth noting, however, multiple sectors are in striking range of being ranked a buy, including Home Health Care, Steel & Iron, Water Utilities, Entertainment – Diversified, Information Technology Services, Defense/Aerospace, Discount, Variety Stores and Shipping.

Nonetheless, there are many stocks in bull mode, that are worth a look over.

Some to take note of include the top 10 stocks (no market cap filter), ranked by Hybrid Score:

1 ACET 4.34
2 ENSG 4.27
3 LPHI 4.26
4 OCN 4.24
5 CMN 4.24
6 FDO  4.19
7 APOL 4.16
8 ORH  4.10
9 NPK  4.09
10 CRH 4.0

On the other hand, a variety of key sectors/stocks are being flagged as “get the fuck out now, else lose your dough.”

The worst ranked sectors, worth noting, include:

Semiconductor- Memory Chips, Biotechnology, Regional Banks-Pacific and REIT-Office

Overall, the worst ranked stocks, north of $10, are:

1 HLS 1.41

2 NUVA 1.42

3 ISIS 1.56

4 ALXN 1.57

5 VRSN 1.58

6 CCE 1.59

7 IPI 1.62

8 DEI 1.64

9 XCO 1.64

10 SONC 1.66

Keep in mind, The PPT is not the holy grail. It is a very powerful analytic engine that is efficient at identifying value or lack thereof. It will always point you towards the right direction, with regards to technically strong sectors/stocks. However, it is up to the user to make the ultimate decision, as always.


4-5= Strong Buy

3-4= Buy

2-3= Sell

1-2= Strong Sell

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Gambling Time

Today was the most tentative day that I’ve seen, in quite some time.

See, the tone for 2009 has yet to be decided. If you are long stocks, in size, memories of 2008 haunt you. Every time you read the business journal, you fret at the thought that people might start paying attention to the bad news.

If you are short, all you are scared about is dumb people, wearing florescent orange jumpsuits, buying stocks, or assholes, like Bill Miller, putting money to work. At the end of the day, it’s all relative.

I made money today, but it is of no consequence.

“The Fly” is into making large buckets of coin, not this petty loser shit.

My position into the close is the same its been everyday, for the last 12 months: fuck this market, it’s going lower.

It may happen tomorrow. It may happen next week. However, just know, you fucking assholes, it will go lower. And when it does, “The Fly” will bask in his glory, while drinking large bowls of ambrosia and eating excessive quantities of buffalo mozzarella.

At the close, I was short XOM, NOV, KIM, VNO and a little HANS.

My long positions include: VCLK, AKAM, C, BAP, TBT, NITE and STT.

As far as inverse etf’s are concerned, I own them all. You hear me you fucking faggots? I own them all (evil laugh).

“The Fly” wins again Update:

CVX Chevron announces that earnings for the fourth quarter 2008 are expected to be significantly lower than in the 2008 third quarter (74.24 +0.28)

The co reports in its interim update that earnings for the fourth quarter 2008 are expected to be significantly lower than in the 2008 third quarter. The company indicated that most of the decline is associated with lower prices for crude oil and natural gas that negatively affect earnings for the upstream business… Total U.S. oil-equivalent production during the first two months of the fourth quarter was 39,000 barrels per day lower than in the third quarter due mainly to the residual impact of the September hurricanes in the Gulf of Mexico. International liquids production increased roughly 10 percent, primarily the result of the completion of the expansion project and annual turnaround activities at the Tengiz Field in Kazakhstan, along with the continued ramp-up of production at the Agbami Field offshore Nigeria… As in the third quarter, full fourth quarter downstream earnings are expected to include sizeable gains from provisionally priced crudes and derivatives, resulting from sharply falling commodity prices… In the Chemicals segment, full fourth quarter earnings are expected to decline in part due to lower petrochemical volumes… The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $250 million and $300 million.

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Back at the Ranch

Mortgage brokers, in rooms the size of airplane hangers, work feverishly to “save homes,” via loan modifications.

I know people in the business and it is stomach turning to hear what the government/banks are doing. People 13 months delinquent on their mortgages are getting preferential treatment, instead of the fucking Marshall at his door. They are modifying all loans, regardless of credit history or income.

It is ridiculous.

We’re (our government) just throwing money away. Call me naive, but all of this reckless behavior has to come home to shoot the faces off of equity holders, no?

In the meantime, the market is break even, year to date. The tone for January will be set after tomorrow’s numbers.

If given a clean slate or lots of new money to invest, I’d keep a bias to the short side, with a 40% short, 15% long, 45% cash blend. Should the market respond positively to tomorrow’s bad news, I’d buy VCLK, STT, NITE, FFIV and maybe a little C.

However, I insist, all trades must be short term. There is a lot of bad news out there, that hasn’t been “baked in.” Furthermore, the imbecilic tea baggers on CNBC are incredibly, and I mean incredibly, bullish as of late.

Cramer has been penning a 100 part series on “why 2009 is going to rock.” and Larry Kudlow is calling for a “panic buying” spree in stocks.

Take what you want from that.

With my money, I will remain cautious. “The Fly” has been talking a lot of shit, as of late. But, please take note of the fact that he has held a 30-60% cash position, for the better part of three weeks. Despite having convictions, I am cognizant of the outside chance that I may be wrong.

Hence, I am patiently waiting, with 30% cash on the sidelines.

Bottom line: If your only hope for a rally is based upon the prospects of the dollar weakening or banks lending money, I think you are disillusioned, to say the least. Rarely do I hold cash, as many of my readers know. Most of the time, I am in the field, shooting howitzers at scared cats in trees. But, for the time being, sometimes the best trade one can make is no trade at all.

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Barack the Builder, who is the official spokesman for the Bill Clinton administration, knows the economy like Beavis and Butthead knows fine dining.

If you are relying on government to get us out of this rut, good fucking luck with that fucker; you are in for a long, long wait.

The only thing government is good for is fucking up wars and keeping poor people in the idiot box.

Let your television be your opiate and just drink yourself to sleep, following a heaping bowl of macaroni and cheese.

In Staten Island, NY, the mayor (Bloomberg) is proposing a hike on the bridge toll. Get this: currently, the toll is $10. That’s not enough, according to Lord Bloomberg. He wants to jack it up to $14!

After all, we have the money. My money is his money, apparently.

As for the markets:

Bad/horrific news is having a muted effect on the markets. My guess, investors are jockeying for position, ahead of tomorrow’s employment data.

Oil is weak, despite the dollar going down. Retailers have begun the process of boarding up their stupid stores. And, finally, commercial RE is in the penalty box—as evidenced by my small wins in short KIM, short VNO and SRS.

Banks are sort of doing nothing, while semi’s and other tech names get the “homo hammer of certain death,” as evidenced by my lazy win in SSG.

This business of investing makes me sick. The people who are at the top of the pecking order, like Madoff, are total scum bags. Believe me, your broker has no fucking idea what he/she is doing. If you think your hedge fund manager is different, once again, you are wrong.

For the remainder of the day, “The Fly” is going to just roam around his office, thinking of ways to bank some coin, with the cash he has left (30%).

More on this later.

NOTE: Germany failed to raise 6 bill in a bond auction.

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iBankCoin Spits on You

Why do you people bother blogging? No one reads your shit anyway. Let your readers come to my site and they will never go back to yours. It’s sort of like stealing your chick, back in High School. Hell, someone is going to do it; it might as well be Senor Tropicana.

I gots lots of shit in the proverbial frying pan. In my head, I run scenarios of potential wins/losses all the time. All of my moves are calculated, from blog posts to punching off your mustache through a glass of Chardonnay.

I was badly punished for shorting China last month, via FXP. But, I’m not done with that fucking cesspool. I’ll let you commy lovers pile into China, into their holidays. Then, when you least expect it, I will snatch the floating carpet from under you—if I may be so bold.

Either way you slice it, LFC and CHL are poorly positioned. And, don’t discount this SAY fraud crap. Family run businesses overseas will come under scrutiny. There will be more bodies.

I know oil is a very popular investment for the internet type these days. Back on Wall Street, most money managers I know laugh at you assholes piling into XOM, north of $75.

We laugh at you.

I saw today, in some yahoo vid, Eric “the oil barrel” Bolling is calling for oil to run up to $75-80. I’m not questioning his calls on black gold. However, I will say, there is NO FUCKING WAY crude runs to $80, anytime soon. It’s not happening.

Let me clarify my position: I am not bearish on crude here, as a point in fact. I am as bearish, as a howling devil locked in a closet, on oil producers and parts makers, from drills to rigs—the whole kit and kaboodle.

They will feel the ramifications of the credit squeeze and declining commodity prices, no doubt.

COP has over 22 billion in debt. PBR has over 24 billion in debt. CHK has over 14 billion in debt. RIG has over 14 billion in debt. CNQ has over 10 billion in debt.

The debt may seem tiny now, as a percentage of earnings. But, keep in mind, many energy firms have negative net cash per share ratios. Furthermore, should earnings bleed out, well then, we have ourselves a homebuilder situation, part II, don’t we?

With that being said, many of you have not learned your lesson yet, with regards to chasing down dead sectors. I am sure the market will rally again, sometime soon and you will be out there buying with both hands.

Feel comfort in knowing “The Fly” spits towards your general direction and that he (“The Fly”) will eventually win.

[youtube:http://www.youtube.com/watch?v=e8WjwDRYN0U 450 300]

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