I was 100% long into today, full moon and dick out running in the green fields and free and brave man. However, seeing that some of my equities were sharply higher, I decided to liquidate them and raise a little cash. I only made one purchase today, in the oil sector — because oil is going to run like a god damned jackal in early 2020.
Here is today’s bounty.
PD +4.8%
NOAH +6%
SQM +5.6%
DAN +4.1%
SWKS +3.8%
See pal, that’s who I am. I do not promise any of my members of Exodus to learn how to trade. That would be like going to a brain surgeon with a malady and asking him to not operate, but instead teach you how to operate to remove the problem. This is stupid and a waste of time. While in my company, you will receive the most export and pristine financial advice known to mankind. Some might argue they’re better than me, but they’d be lying — believe me.
We’ve enjoyed a wonderful runaway market the past decade, as well as a wide divergence between those able to buy stocks or not. If not for the assistance of central banks around the world, everything you see around you might very possibly have been burnt to a golden red cinder. Alas, our heroes at the Fed have answered our prayers each and every night, thru more than 50 rates cuts and $4 trillion in balance sheet expansion.
The ECB faced their crisis in 2012 and looked Greece into their beady black eyes and said “whatever it takes”, then expanding their balance sheet by $2.5 trillion. Bonds for all.
The Japanese, still reeling from their 1990s blowup, went hogwild, putting an end to their currency implosion and expanded their balance sheet by $4.5 trillion.
All in all, central banks have placed $11 trillion into capital markets and they’re not done yet. The US tried to liquidate and even hike rates, but that quickly dissipated and now we’re cutting and doing QE again.
“The central banks were sucked into a world they never wanted to be in,” said Ethan Harris, head of global economic research at Bank of America Merrill Lynch. “Then, central banks figured out this is the new world we’re in and we have to find new tools to promote growth. They went from reluctant participants in international policy to eagerly embracing it.”
I suspect we’re cross the rubicon line, the point of no return, which will continue thru the new roaring 20s — giving way to a most horrendous crash in ’29 and depression throughout the 30’s. Maybe we’ll get bailed out by some spectacular war by ’38 to stem the tide. In the meantime, prepare for good times, faggot parties, and lots and lots of celebratory champagne.
Pictures communicate best with humans, which is why the cavemen painted idiot pictures inside of their caves. You can print this out and tape it to the wall. It will be your guide.
I talked about the period of “nothing ever happens” last week and this remains the case as the Federal Reserve is obviously bailing out markets/institutions without admitting to it.
Just today the WSJ reported the Fed injected another $86 billion of liquidity into a repo market that apparently has gone haywire and dried up.
An alert for you permanent bull faggots out there, my boy Tyler has gone all in on this story, reporting on it regularly. You might loathe him for his end of world doomsday ways, but the man knows his shit. So pay attention.
One week ago we quoted from Wilson’s latest weekly report, in which the now quasi-bullish strategist explained why he had grudgingly turned bullish, saying “we continue to see the 3 largest central banks in the world expand their balance sheets at the rate of $100B per month ($60B from the Fed, $25B from the ECB and $15B from the BOJ).” As a reminder, several years ago, Citi’s fixed income guru Matt King said that it takes $200 billion in quarterly liquidity injections across all central banks to prevent a market crash, and lo and behold we are now well above that bogey.
Wilson continued, pointing out that “as part of our year ahead outlook published a few weeks ago, we cited this excessive liquidity as a reason why we thought the S&P 500 could trade well above our bull case year end target of 3250 while this policy action persists. As of right now, it appears that the Fed, ECB and BOJ will continue at this pace through the first quarter of next year.”
The Morgan Stanley strategist then also laid out how central banks directly affect risk assets, noting that “the central bank transmission mechanism is via suppressed volatility” and ading that “the recent actions by the Fed were intended to reduce volatility in the repo market but it’s also had the effect of reducing the volatility in risk markets.” Little did Wilson know that just a few days later, the Fed would announce a record $490 billion in year-end liquidity backstops in the form of expanded overnight and term repos to avoid a year-end repo market crisis and to keep repo rates low on Monday when about $100 billion in systemic liquidity would be drained as explained previously.
It should be noted the market has been running higher in lock-step with FOMC commitments.
Morgan Stanley summarizes:
The approximately $100B/month of balance sheet expansion from the big three central banks (Fed, ECB and BOJ) is now being further enhanced by the Fed’s overnight repo operations which are expected to increase to $490B by year end. In short, we don’t expect any liquidity issues between now and year end with that kind of money flooding the system. And, while the repo operations won’t have a direct impact on risk markets, we do think the Fed’s $60B of bill purchases and the ECB and BOJ QE operations are absolutely suppressing volatility across most risk markets, including equities…
Bottom line: we no longer have a free market. It is fucking rigged to the bone. Rates are artificially low and 50% of share buybacks are being financed by debt, which is reducing share count and causing IARs to bully their clients into “cheap” stocks — which are cheap due to share buybacks. It is the biggest Ponzi scam of all time and when it blows up — you will rue the day you were conceived. Nevertheless, we’re not ready to blow up just yet. As a matter of fact, all of this rigging is bullish for stocks because the riggers are 100% in control. Alas, pay attention to the small details when said gents lose control. That will, inexorably, be discussed in greater detail inside of the hallowed halls of Exodus. Before year end, spend some of your soft dollars and join the league of Distinguished Gents.
For the past two years investors have been given terrible advice from little finance people online, typing really fast into their computers. Without question, these people have no idea what it’s like to innovate and build businesses and are butt-hurt for political reasons. Little keyboard politicians changing the world, one exclamation mark at a time. Low IQ reprobates have been warning of doom regarding Musk and his leadership, which, by the way, has translated into a 75% gain the past 6 months.
Business Insider has been the very worst of the group — the #TSLAQ gang hellbent on creating discord between Musk and shareholders.
Net net, they’ve been proven wrong and no one with an IQ north of 100 is surprised. Bet against the guy building space rockets or with the little person blogging drunk?
You TSLAQ fuckers need to fuck off. Go bet against a paper company or a criminal organization run by chemical barons.
For the day, I bought a slew of stocks, sold BIDU for a 6.3% gain, and find myself 100% long into the close.
Growing up in the tar pits of Brooklyn, I have a keen sense for when to drill for oil and when not to. I was raised under the hammering of oil rigs. I’d go to sleep with fire burning bright in the Brooklyn sky, as my family drilled thru the tar sands and into the black gold below. Sometimes we’d hit gas and blow up a few square miles of homes, but it was all worth it in the end.
In recent years I’ve had great difficulty trading oil stocks, mainly because of the present state of the industry. It is dead, for lack of a more elegant term. Gone are the halcyon days of $140 crude, when men like me could walk onto his porch, light a bulldog pipe, and oversee his vast empire of derricks mechanically placing money into my purse (no homo). Nowadays you have to work hard for it, claw and bite your fellow man for a few million barrels of light sweet.
It just so happens that I have very sharp teeth and even sharper finger nails.
Starting last week, like a burglar in the night, I initiated a position in a well known oil company. Today, I bought a much smaller one. Over the next few weeks, I intend to secretly accumulate shares in a variety of oil companies, leading to Le Fly becoming, once again, an oil man of esteemed proportions. My name will be synomous with oil, just as Zerohedge is with bear and Business Insider to shit.
IFF is merging with DuPont’s bioscencies division, creating a $26 billion giant. When these two companies merge, you’ll want to get long. The innovation at IFF coupled with the New World Order prowess of DD will be an unstoppable combination.
Nasdaq futures are sharply higher. I hope you finished your Xmas shopping by now, lest you’ll feel the pressure the coming week to visit the mall and then kill yourself.
Continued move in the 10yr yield higher, now at 1.85%. Bear in mind, there isn’t anything to worry about UNLESS RATES GO UP. If you see the market down 500 and rates are lower, buy the dip. If you see the market down 500 with yields up, short into the hole.
Heading into the final weeks of 2019, you should be winding down operations and making sure pressure is low. This is not because the market will be soft, but for peace of mind. Nothing could be worse than enduring the holiday season with large losses mounting in a brokerage account. It would be like a knife twisting in your gut.
Last night I made a pulled pork. The key to cooking a pork shoulder or any meat you intend to roast is low heat and cook it for a long time. I cooked it at 400 for 30 mins to brown top and then 220 for like 5hrs and it came out perfect. Friendly reminder: if you’re an adult and not learning how to improve your cooking skills on a continuous basis — you’re a low IQ reprobate.
Early going I suspect biotechs will continue to shine; but we’ll see.
Faggots get in here and tell me how Trump folded to the Chinese. It appears after years of squabbling with the Chinese, they got a deal that will, in fact, double exports to the great walled nation.
Lighthizer, one of the lead negotiators in talks with Chinese officials, previously said that the U.S. would keep the 25% tariffs on $250 billion of Chinese imports, but would reduce tariffs on $120 billion in products to 7.5% from 15%. The tariff reduction will take effect 30 days after the agreement is signed.
“We have a list that will go manufacturing, agriculture, services, energy and the like. There’ll be a total for each one of those,” he said. “Overall, it’s a minimum of 200 billion dollars. Keep in mind, by the second year, we will just about double exports of goods to China, if this agreement is in place. Double exports.”
It’s also worth noting, we are still applying tariffs to them and expelling their diplomats for spying on our fucking military bases. So, whether you’d like to admit it or not, BIG AG gets a major win under an embattled Trump administration who is presently under an impeachment threat for issues of great importance. It appears, and this is simply from a layman’s point of view, all America had to do was ask.
Long ago people celebrated Christmas for religious purposes. Nowadays, everyone celebrates and sucks on the cock of a mythical Satanist who travels by way of sled into the homes of young children and then eats their cookies and leaves little presents. He leaves these presents for no reason whatsoever, other than the fact he is rich AF and employs thousands of slave elves to build shit for him.
In America, poor people and rich people alike spend money recklessly in order to placate bratty children with toys they don’t need and often will never even open out from their boxes. Gifts are wrapped fancily and stacked like bricks under a plastic tree adorned with kitsch lighting and baubles made in China. Everything about this holiday spells Sodom and Gomorrah, yet like clockwork we all succumb to the social pressures of this ritual each and every year — because to ignore it or to loathe it means you’re Scrooge, and an evil businessman who kills Tiny Tim and is doomed for a cold grey graveyard alone and destitute and sent to hell.
I’ve tried to temper my approach to this holiday and often found myself masking the poor taste in my mouth with quality wine. But, as I have committed myself to NO BOOZE TILL SUMMER, I am now forced to withstand this barrage sober and I look upon the Amazon packages being tossed against my door with a painful remorse, a reminder that I’ve done something wrong by adhering to social indoctrination. Nevertheless, and I mean this with the utmost candor, I shall press on into pagan Xmas and spend more money now than at any time during the next 12 months because everyone that we know must be rewarded via some sort of vaudeville styled gift in order to show our true appreciation for their friendship and existence. Our children will rejoice in their gifts, count them even, and shortly after opening thousands of dollars in gifts resort back to their cyber lives and leave us to clean up the mess they left behind.
After a nice fat turkey, we will then discuss what we might do on New Year’s eve.
Most of you don’t know what the fuck is going on, so let me explain it. Read the headline below.
Now read this.
To fund these aggressive buybacks, Corporate America has been forced to draw down their cash balances.
Nonfinancial S&P 500 companies slashed their cash holdings by $272 billion over the past 12 months, according to Goldman Sachs. Although that still leaves them with a ton of cash, the 15% decline marks the largest since 1980, the firm said.
Here’s another way to look at it: Goldman Sachs found that nonfinancial cash balances as a percentage of assets has declined from 12.7% in June 2017 to a nine-year low of 10.4% now.
Buybacks got a bad name when bullshit companies like JCP wasted billions on them. Bear in mind, you can only put lipstick on a pig once. After too long, the charade is over and everyone is looking for bacon. But if applied smartly, correctly, share buybacks are rigging machines — fucking with earnings ratios and forcing people to bid up shares.
Earnings get a boost and PE’s reduced. So what ends up happening is IARs and their stupid clients prance around on Wall Street feverishly sopping up shares because the MUH PE is cheap and earnings are attractive. This, as you now know, is a fraud — perpetuated for one single reason: BOOST SHARE PRICES.
Apple’s historical PE and share count.
Share buybacks very possibly could reach $1 trillion this year.
