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
19,441 Blog Posts

Markets Pricing in July Rate Cut — How’d We Get Here?

I’ll tell you how.

It’s Trump, that’s how. The man is obsessed with the fucking stock market and treats his position as means to plunge the market whichever direction is feels like it. He’s no different from one of those Robber Barons you’ve read about — operating outside of the law or within the law because the country was lawless, in order to build extreme wealth for the purposes of sport.

The surprisingly weak jobs report for May, with just 75,000 jobs created, shows that the resilient job market is now being hit by the same weakness cropping up in other parts of the economy.

Economists say it’s now likely the Fed will move to cut rates this year, possibly as early as July.

Treasury yields, which move opposite price, continued to fall sharply, and the futures market moved to price in an almost three-quarter point rate cuts by December.

Now we’re factoring in nearly a 100% chance of a July rate cut. Today’s jobs report pushed it over the ledge. What’s hilarious is as you go down the line towards December — the rate cuts get more and more severe — with some pricing in 100bps in rate cuts.

What else can I say? Markets haven’t been free for a long time. Now the manipulation is ribald and gauche and in your face, like a neon green summer jacket and it’s disgusting, but at the same time easy to see and even easier to pick pocket.

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With Plunging Yields — DividendFAGS Sop Up Old Man Stocks

You can buy growth and make a fortune. I’d argue that now is not the time to dive headlong into growth, but you won’t listen anyway. I’ve been doing a pick of the day inside Exodus, which is designed to be an overnight hold. Buy in late afternoon, sell in the morning. Yesterday’s pick was AYX — surging 6% today. I sold. You’re welcome.

You will see how much you miss my stock picks here in due time.

In the meantime, I wanted to show you something.

LOOK AT IT. That’s the winning sector today, during yet another melt up. My old man portfolio is up nearly 400bps this week. Why? Because as treasuries plunge, people who vie for income need to find yield, so they swap out of bonds and into high paying dividend stocks. The best dividend stocks are slow growth, high free cash flow, generating machines. REITs, Utes, consumer staples etc.

If you position there now, I’m fairly certain you’ll be set for the summer months, and you’ll even look like a genius if the market should reverse lower and those aforementioned sectors resist the selling hordes — because of their defensive posture.

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Big Job Report Miss — Treasury Yields Plunge — More Trump Shenanigans

Massive miss in the May nonfarm payrolls.

May Nonfarm Payrolls 75K vs 180K

No one gives a shit, sans the bond market — who are chimping out now hardcore — pressing the 10yr to 2.06%

In case you’re wondering why futures are +100 while yields are getting crushed — here it is.

S&P SPDRs futures spike on headlines that the U.S. has decided to give some China products additional time to avoid tariff hike

See: Trump is a fucking brainlet. He just does things out of impulse and then quickly corrects his first instinct with a more measured approach. This is fine thinking, if it were not for the fact he was President and his actions causes stocks to plunge and surge with every god damned tweet or idea that emanates from his empty head.

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End of an Era: Barnes and Noble’s Acquired and Being Taken Private

I have such fond memories of Barnes and Noble’s. When I was young the library was the primary place to get books and do research. Later on, Barnes and Noble’s came to the scene and was viewed as this giant corporate bookstore that was menacing small shops out of business. If you’ve ever seen the 90s hit movie “You’ve Got Mail” — you’d know the film was talking about good old Barnes.

As a young adult and father of 3, I visited the store at least once per week. We loved it there, especially because it was so big and even had Starbucks inside of it. As a young stockbroker, it was one of the first stocks I pitched to prospective clients. The pitch was easy — Amazon was a flash in the pan competitor who would eventually fail — because Barnes had the real estate and the true connections to their customers. People ate it up.

Now with the benefit of hindsight, that was all horseshit. While BKS came to the scene as a giant corporate monster ferrying small bookstores to the waste bin — they ended up the small bookstore being executed by the new and bigger evil corporate monster — Amazon.

Funny how that worked.

End of an area — Barnes and Noble’s has agreed to be acquired and will be going private.

Barnes & Noble to be acquired by Elliott Advisors for $6.50/share in cash, or approximately $683 mln (5.96)
The $6.50 per share purchase price represents a 43% premium to the 10-day volume weighted average closing share price of Barnes & Noble’s common stock ended June 5, 2019, the day before rumors of a potential transaction were reported in the media. The announced transaction with Elliott is the culmination of an extensive Strategic Alternative Review conducted by the Special Committee of the Barnes & Noble Board of Directors, which was announced on October 3, 2018.

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Let Today’s Melt Up Be a Lesson to You

Thou shalt not short stocks. The exchange is now managed higher by the government. Come to think of it, providing you buy big companies — this is the easiest money you’ll ever make. Whenever things start to go wrong, simply sit there and laugh at stocks. When you see people tweeting about shorting and betting on zero, find solace that you will soon own their homes and be the cause of their divorce.

Look at how the market looked bad just last week. Now we’re running hot and higher. You cannot stop it.

Borrow money from the mafia, or local loan sharks, and margin it out on the Nasdaq. There is a nice arb there, believe me. Can’t fucking lose.

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Great — More Trump Bullshit: Mexican Tariffs Might Be Delayed

It’s impossible to short this tape. Semis were down 25% the past month and the only appropriate approach to that price action was to laugh and snort a loong line of cocaine. Trump is a fucking retarded orange ape who is blatantly manipulating stocks for reasons unbeknownst to me.

All I know is — this news is fucking stupid on top of stupid.

So Trump says Mexican is gonna get the hammer and then immediately reverses that decision and decides to, ummm, delay it? This is called petulant fucking moron, playing games with markets for the sole purpose of either greed or avarice.

This is not an anti-Trump screed. This is an anti-moron screed and I’m sick and tired of everyone interfering with the natural order of markets.

Self inflicted wounds cure immediately by faux elixirs. This has been occurring for the better part of 2 1/2 years — ever since he got elected.

The main takeaway: Trump is too narcissistic to ever let stocks decline. Buy all dips and never sell short, or hedge, because it’s a waste of time. Let’s be honest. All of you TSLAQ faggots out there will get the rope too.

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Breadth is for shit. Nothing is lining up for trades. Can you imagine if every day was this fucking bland?

What happens to stocks when WTI dips into the $40s? Will the junk bond market finally begin to price it in?

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Afternoon lads.

Since the Exodus FREE TRIAL disaster scourge has ended and I am NO LONGER PROVIDING YOU FUCKERS WITH STOCK PICKS HERE — you’re without paddle in a ruinous rocky river.

DO NOT FEAR. You can still steal from me — but it’ll take more effort to build a system out of it.

The Exodus algos run for free on FreeStockAlgos dot com.

You’re welcome!

Here are the top rated ETFs in Exodus now. LOOK AT THEM.

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Ten Year Treasuries Break 2.10%; Stocks Begin to Falter

We could very well go up from here and no one would bat an eye of indifference. Truth is, we have a remarkable situation set up with mortgage rates below 4%, gas prices down, stocks near record highs — and a willingness by the Fed to cut more if needed. What else could we ask for? Is this not the perfect scenario?

How to go wrong?

You can be wrong by investing in small stocks or heavily concentrating into one sector, or buying stocks that aren’t correlated to the broader indices. For example, if you’re only buying biotech or retail or oil stocks — you’re injuring your chances of success. To trade well in a tape as comfortable as this, simply buy what has been working — big capped tech, SAAS, avoid earnings gambits etc.

Also, if you’re only 5% weighted per stock and have exposure to all 8 sectors — you should perform better than the market. The reason why my Quant is doing so well is because it’s rooted in fundamentals and technicals. You need both. You can’t just go buying great charts without having some core fundamentals behind those charts, otherwise you’ll end up getting blindsided by a earnings debacle.

While I think the market is due for a pullback, I wouldn’t bet too much on that happening. What I would position into now, as I am doing so today and also yesterday — are value stocks. I’d tell you my picks — but that’s for Exodus members only. Sorry, new policy.

Value stocks thrive in a low rate environ.

On a another subject of note, gold is at $1,340 and threatening to break free of a 6 year consolidation pattern. Or, it can do what it has done consistently for the the past half decade — FAIL and drop back down lower again.

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Trump Threatens to Tax Another $300 Billion in Goods From China; Futures Rise

It’s always fun to see stuff happen that people warn us in advance would be disastrous. Remember the debt ceiling crisis or when S&P cut the rating of US sovereigns or when the government shut down and it was supposed to destroy mankind?

How about Ebola or Greece or perhaps Italian elections, or BREXIT — or Trump getting elected?

Everything means nothing.

“Our talks with China, a lot of interesting things are happening. We’ll see what happens … I could go up another at least $300 billion and I’ll do that at the right time,” President Donald Trump said Thursday.

Negotiations between Beijing and President Donald Trump’s administration took a turn for the worse in early May with the increase of tariffs on $200 billion worth of Chinese goods exported to the U.S.

I’ve come to find out that the market and the economy aren’t affected by anything at all. It’s too big for any one item to derail it. As such, you should go about your lives freely and confidently, knowing that literally nothing can stop it from going higher.

Dow futures are +80; Trump threatens China with more tariffs. More nothing. China is not all that important, after all.

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