Fly Short: PACW

I sold short 5,000 PacWest Bancorp [[PACW]] @ $29.72.

Disclaimer: If you sell short PACW because of this post, your friends will label you an albatross. And, you may lose money.

I know that term applies to many of you drug addict types. However, I am talking about the spread between gasoline and crude. At the present, the crack spread is above $15. Keep in mind, when Valero Energy Corporation [[VLO]] , Tesoro Corporation [[TSO]] and co. were hitting all time highs, the spreads were not much more than $20.

Needless to say, the refiners must be bought.

Once again, courtesy of “The PPT,” here is a list of refiners, sorted by percentage of shares sold short:

In other news, I now hate people who incessantly buy Wells Fargo & Company [[WFC]] and U.S. Bancorp [[USB]] . I am telling you now: I will track them down and have their mustaches punched off.

By the way, natural gas may spike hard here too, due the fury of Ike. My weather reports say Ike will bring a bigger storm surge than Katrina. If you think that can happen, get long [[UNG]] , Natural Gas Services Group, Inc. [[NGS]] , Arena Resources, Inc. [[ARD]] , GMX Resources Inc. [[GMXR]] , TXCO Resources Inc. [[TXCO]] , NGAS Resources, Inc. [[NGAS]] and Ultra Petroleum Corp. [[UPL]] .

Also, considering the amount of damage that may be done, take a look at BlueLinx Holdings Inc. [[BXC]] , Builders FirstSource, Inc. [[BLDR]] , Pike Electric Corporation [[PEC]] and The Shaw Group Inc. [[SGR]] —just to name a few.

Top pick: Western Refining, Inc. [[WNR]]

What’s wrong with these people? I mean, they seem to be living in a drug induced world of euphoria, where everything is priced in. Are you imbeciles even looking at American International Group, Inc. [[AIG]] and Merrill Lynch & Co., Inc. [[MER]] ? Forget about Lehman Brothers Holdings Inc. [[LEH]] and Washington Mutual, Inc. [[WM]] ; they’re already dead.

Do you think those stupid charts of yours, pointing to a “breakout” in Wells Fargo & Company [[WFC]] , will stand the test of financial Armageddon?

Just in case you didn’t know, the market is not smart. It’s as dumb as a bag of shoes. I live for these type of tapes, when people with zero market knowledge step into dung, trying to play Gordon Gekko.

Listen to me: the market is NOT going up.

Instead of looking for “possible reversals,” you should be structuring your bank accounts to fall within FDIC protection. It’s not a joke or just a theory anymore. The banks have soiled themselves and they will not be getting up.

Hey, what do I know? I’m just a guy with a 155 IQ, who drives around in a diamond encrusted time machines (spinning rims), while drinking monster energy soda from his chalice.

The dollar is getting pounded today, which helps commodities. As you know, I am heavily long [[DIG]] , [[IEO]] and Western Refining, Inc. [[WNR]] .

I like the refiners best, as a play on Hurricane Ike.

Also, Freeport-McMoRan Copper & Gold Inc. [[FCX]] is lifting off. It may be time to revisit Southern Copper Corporation (USA) [[PCU]] too.

Finally, Bill Miller is just a goat herder. That man is unqualified to manage money, regardless of his track record. If anyone from Legg Mason, Inc. [[LM]] is reading, feel free to contact “The Fly.” He will be more than happy to take over Bill Miller’s fund and help save the company!

Until then, I will be shorting LM with great vigor, and tenacity.

NOTE: The solar burritos are, officially, dead: Chipotle Mexican Grill, Inc. [[CMG]]

Federal Reserve and U.S. Treasury brokering talks to rip out Lehman’s spine.

Praise be to Premier Paulson of the USSA.

Merrill’s next.

NOTE: How are my predictions for 2008 working out, so far? Back to my diamond encrusted time machine.

UPDATE: Here are the notable bagholders of Lehman Brothers Holdings Inc. [[LEH]] stock, sorted by shares held.

AXA (ADR) [[AXA]] : 65.7 mill.

Fidelity: 39.5 mill.

Cleanbridge: 39.1 mill.

Barclays PLC (ADR) [[BCS]] : 27.1 mill.

Wellington: 25.5 mill.

Janus Capital Group Inc. [[JNS]] : 22.4 mill.

State Street Corporation [[STT]] : 21.7 mill.

Vanguard: 20 mill.

Norges: 17.5 mill.

Pzena Investment Management, Inc. [[PZN]] : 11.6 mill.

Capguard Trust: 10.6 mill.

Soros: 9.4 mill.

T. Rowe Price Group, Inc. [[TROW]] : 8.3 mill.

JPMorgan Chase & Co. JPMorgan Chase & Co. JPMorgan Chase & Co. [[JPM]] : 6.7 mill.

Oh, in case you are wondering, one of Legg Mason’s funds started a new position in Lehman last quarter: 2 million shares, likely north of $15.

[youtube:http://www.youtube.com/watch?v=rwa1nLPPoVk 450 300]

This is my last post for the day: I have better things to do.

The behavior of the bank bulls today is telling. They are acting like little kids, covering their eyes and ears in order to avoid seeing the boogey man. Instead of looking at American International Group, Inc. [[AIG]] , Lehman Brothers Holdings Inc. [[LEH]] , Washington Mutual, Inc. [[WM]] and Merrill Lynch & Co., Inc. Merrill Lynch & Co., Inc. [[MER]] , they look to Wells Fargo & Company Wells Fargo & Company [[WFC]] , The Bank of New York Mellon Corporation [[BK]] , JPMorgan Chase & Co. [[JPM]] and U.S. Bancorp [[USB]] for a little respite.

Sooner or later, you will have to own up to this lunacy.

There is a very meticulous program being implemented to keep the markets afloat. I hope you have learned, through a variety of failed breakouts, they all fail.

Whether banks trade lower today or next week or next month is irrelevant. At the end of the day, economic headwinds, which include a strong dollar, says we go lower.

Despite oil trading lower, oil stocks are up. Go figure.

Plain and simple strategy: short banks, long oil stocks, with an outsized trading position in the refiners.

Even if you’re not a man.

With Hurricane Ike (here I go again) barreling down the highway of rigville, “The Fly” is very keen on buying shares of Western Refining, Inc. [[WNR]] here, in a very pointed and deliberate way—mind you.

You loosers [sic] can go play with the banks and end up getting ripped off like a rich dude at a Coney Island side show. However, with my money, I’m into new things.

As you well know, “The Fly” will not sell his [[SKF]] , sub $140. So there.

Anyway, with gasoline spiking and oil gay, I like Valero Energy Corporation [[VLO]] , Frontier Oil Corporation [[FTO]] , Tesoro Corporation [[TSO]] , Western Refining, Inc. [[WNR]] and even Delek US Holdings, Inc. [[DK]] .

In addition, I am feeling brave, with a chestful of venom, holding shares of [[DIG]] and [[IEO]] , which gets you long the whole oil/gas space.

Finally, I believe the forced selling in Freeport-McMoRan Copper & Gold Inc. [[FCX]] is almost done. I like that name, a lot, sub $70.

I sold short 5,000 PacWest Bancorp [[PACW]] @$29.54, 2,000 Marshall & Ilsley Corporation [[Mi]] @ $16.60 and 2,000 Fifth Third Bancorp [[FITB]] @ $14.40.

Disclaimer: If you short the above names, your neighbors will accuse you of being a nazi sympathizer. And, you may lose money.

I bought 25,000 Western Refining, Inc. [[WNR]] @ $10.15 and 2,000 Freeport-McMoRan Copper & Gold Inc. [[FCX]] @ $65.75.

Disclaimer: If you buy the above stocks because of this post, your pension fund will be switched to the direct management of Bill Miller. And, you may lose money.

You think I like shorting stocks? There was a time, not too long ago, when I’d spit on people for being bearish. This is America. I love it. There is nothing like it.

However, after 9/11, everything changed. With the country distracted and Washington panicked over the economy, Wall Street took advantage and misbehaved, sort of like when a child does something sneaky when his parents are not watching.

While brave men traveled overseas to fight for the honor of our nation, losers at home loosened credit and housing regulations, then opened floodgates of capital, in order to reinflate the ailing economy. They were very brazen, indeed.

Homes for the rich, middle class and even the poor were permissible, under any circumstances. Systems in place to protect prospective buyers, that worked fine for generations, were scrapped and replaced with zero down payment/zero document/exotic loan packages. Companies like CountryWide, Wamu, Lehman, Indymac and Bear made a fortune for themselves, enticing the little guy to grab a piece of Americana. The deal guys made so much money, the high end art galleries in NYC were running low on supply.

All of this was fueled and encouraged by the government and the Federal Reserve.

Fast forward 7 years, we see the damage of a society that acted irresponsible.

We, as a nation, dishonored the deaths of those who perished on 9/11— and those who died in combat following. Instead of building a better country, one that valued the important things in life; we got greedy and literally ruined the financial system—all in just 7 short years.

Think about it.

Now we have a new crisis, a financial one. This one cannot be rebuilt by a few dozen construction companies. In a sense, one could argue that we have caused more damage to this country, following 9/11, than the actual terrorist attack itself.

I am sure the bastards who flew planes into our buildings are pleased.

Yet, here we are, many years later, with no leadership and no good ideas. It’s just more of the same.

As for the markets:

The Lehman Brothers Holdings Inc. [[LEH]] story is not going to end well. I sense they are the sacrificial lamb for the Treasury. They will justify their Fannie/Freddie crime by saying: “look, we let Lehman fail.” The ripple effects will be staggering.

Also, the Washington Mutual, Inc. [[WM]] situation is far more serious. Once they default, the FDIC will have to pony up some serious capital to insure depositors.

Finally, I like short Legg Mason, Inc. [[LM]] , PacWest Bancorp [[PACW]] and Comerica Incorporated [[CMA]] here, in addition to may others. And, of course, [[SKF]] and [[SRS]] are still very, very cheap.

NOTE: So much for Merrill Lynch & Co., Inc. [[MER]] holding that deal price, right? Morons.