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Everything posted by Jimbo

  1. HOW TO CONDUCT AN EXPERIMENT.......AN EXERCISE IN CONTROLLED DEMOLITION The Fed is conducting a bit of an experiment. What is the experiment you may ask????? It is letting the Bond market have a bit of freedom to measure 2 things: 1/ How fast interest rates will rise. 2/ How that will impact the stock market. I.e. its probably quite happy to see stocks sell off 10-20% as a result. Anything more and it will slam on the breaks and start buying bonds in earnest. Which will crash the dollar. Buts that's a story for another day.
  2. THE DOLLAR OR THE BOND The FED has to either let the Bond market crash ....or the dollar crash. It can't save both at the same time. Right now they are letting the Bond market crash. But this won't always be the case. Sometime "soon" they will have to open up the printing throtle and save the bond market at the expense of the dollar. The FED is playing an alternating game. Saving the dollar...let the bond market crash. Save Bonds ...let the dollar crash. Alternating between these two states.
  3. AND SO SWEET PRINCE GO QUIETLY INTO THE NIGHT And so goes gamestop. The only holders left are Redditor bagholders who think: 1/ The short squeeze is still on. 2/ Gamestop will be magically reincarnated as the Chewy of electronic games and all things electronic game related. 3/Plus shorters who think it will decline even more. The speculative mania has moved on to other more inviting targets.
  4. THE GAME STOP GAME IS ALMOST OVER As the shorts cover the short squeeze melts away. Smart money has already sold out and moved onto silver.
  5. A QE ENVIRONMENT IS A PARADISE FOR SPECULATORS As I have stated before a QE print environment creates a hothouse environment for speculators. Its great for speculators....not so much for investors. No good for short sellers. In this environment the most shorted stocks will find it easy to raise capital. i.e. the companies that lose the most capital receive the most capital. A sort of capital destruction situation.
  6. Jorma I think there are two separate issues here: 1/ Issue One...getting out of the wrecked motor vehicle that are their shorts. This requires buying back stock....sooner or later. Where are they getting the stock from? It is doubtful that the Redditers have enough stock to sell (or would want to sell). A secondary offering would provide stock in volume and at an acceptable price. 2/ Issue two: Replacing the motor vehicle...replacing the previously cheap leverage provided by the short leg...which can be handled by bank loans.
  7. THEY HAVE TO KILL THE SHORT SQUEEZE BEAST The long/short hedge funds need a get out of jail free card badly. They need access to cheap stock of the most shorted names in order to unwind their short positions at an acceptable cost that does not destroy them. Banning trading...for some...(actually banning buying by the redditors) and deplatforming Wall Street Bets is simply a temporary panacea....it is not a cure. The cure is....... 1/ Giant secondary stock issues from the most shorted stocks. 2/ These will then be bought by the long/shorts to provide the stock for
  8. THE GAMESTOP GAME HAS BEEN STOPPED.....THE REVERSE HOTEL CALIFORNIA As I predicted trading in the most shorted stocks restricted. But not entirely suspended. No....rather trading has been "Slanted". i.e. the Redditers can only sell but they cannot buy!!!!!!!!! (A sort of reverse hotel California - in the song you can check in but never leave...well Redditors can leave (sell the stock) but they can never check in (buy the stock)). So if they cannot buy then who is on the other side of the trade when they sell, who are the buyers?????? Who is in the "Hotel Cali
  9. A BAD CASE OF SHOOT THE MESSENGER And right on que Wall Street Bets is targeted for destruction by the powers that be. The Long short funds are in a very tight spot. Their shorts are deeply underwater. Which they need to get out of as quickly and as painlessly as possible. And because their survival is at stake they won't play fair. Que Wall Street Bets destruction. But now there vulnerrabilty has been displayed for all to see. It will attract bigger and hungrier predators to the feast. Instead of just the swarm of wall street bets pirahners. T
  10. A BAD CASE OF OVER SHORTING (AND OVER LONGING) IS NOW BEING UNWOUND 1/ All the FED QE from 2019-2020 great for long short funds. 2/ Long short funds leverage up to go long the most popular stocks. 3/ They do this by going even shorter on the most shorted stocks (they borrow the stocks sell them and use the money to go long on the markets most loved names). 4/ This leads to a very bad case of over shorting and over crowding on the most shorted stocks. 5/ It also leads to over crowding and an over bought situation for the most popular longs. 6/ Overcrowded short pos
  11. THE FED SAVES THE GREAT WALL OF TRIPLE B The FED by printing and inflating is also effecting a bond upgrade for all the corperates that have borrowed bonds rated triple B. As the value of the debt is transferred to the equity is makes the debt safer by effectively deleveraging the companies. As the equity increases in value and the debt decreases in value the leverage ratio goes down and the debt becomes safer. And becomes a candidate for upgrading. If the FED hadn't printed treasury rates would have gone up, rates on corporate debt would have gone up and a significant
  12. MARKET GOES UP While printer goes Brrrrrrrrrrrrrrrrr We are in the equity market "frame" of the giant short squeeze. I.e. Gamestop. Where is the Short Squeeze ETF when you need it. Takes long positions in the most shorted stocks. Cashes out at the top of the short squeeze. It needs a trendy name for marketing purposes naturally. How about the "Pins and Needles" ETF A lot of short sellers will be shaken out by the short squeezes And become too frightened to short when the real short opportunity comes along. Shorting massively over valued s
  13. IG Number Its a financial metric I invented. It quantifies the inflationary gift transfer of debt value in terms of a stocks value. Companies with high debt (long dated and fixed) have high IG numbers. The value of the debt is inflated away and transferred as value to the shareholders. This is currently 2% of debt per annum. So for a ten year bond 20% of its value is going to be transferred to the shareholders. But if inflation is 5% over the life of the bond 50% of its value gets transferred to shareholders. So the IG number depends on four factors:
  14. THE GREAT TRANSFER Re my idea of an ETF with high IG number stocks. Lets call it the Weimar ETF Oxy common stock has a very high IG number. Uncle Warren is getting 8% fixed for his prefs. A great number IF there is no inflation. The debt is also a great buy IF no inflation. But IF there is significant inflation then the common is a great buy. As the value of the debt and the preference shares is transfered to the common. If I were Uncle Warren I would try and restructure the deal. So he gets CPI plus 6% instead of the fixed 8%. If he can o
  15. THE FED's YEILD CURVE CONTROL The Fed has been exercising yeild curve control since September 2019 when it started the REPO flood to bail out the wall street banks which had lent too much to the hedge funds which were using the repo money to lever up and go long bonds. The current calmness in the REPO market suggests that it worked for this purpose. The hedge funds have delevered. Of course it set of a stock market mania that is still in full swing. The party now requires a constant avalanche on money printing and bond buying to keep going.
  16. TAKE APPLE Sells for 30 times free cash flow a 500% increase on the 6 multiple in 2013.
  17. THE GREAT BOND GULAG I just dont get it. Why do bond holders take the punishment of negative rates?????? Just too crazy for words All the bank depositors should also withdraw their money
  18. THE BIG TRANSFER in 2008 it was the big short. Those who shorted housing made out like bandits when it all collapsed in 2008. Now its THE BIG TRANSFER Those who have debt are going to make out like bandits Those long housing (with a large mortgage) will make money. Those long and hard asset purchased with borrowed money arew going to win.
  19. THE GREAT BOND GULAG Yep....some brave capital is attempting to break out from the 18 Trillion negative rate bond gulag. Expect more mass break out attempts in the future.
  20. CONTAINER RATES FROM ASIA TO US RISE The US tsunami of government spending and FED printing to cover that spending has led to a boom in imports from asia. Hence freight rates rise. Dollar is dumped by Asian exporters leading to dollar fall. Rince wash repeat. This does nothing for the US economy. But its great for asian economies.
  21. THOUGHTS ON 2021 Bank depositors will flee unless interest rates go up. Stocks too high need a good correction. Bonds ridiculously overvalued but what's new.
  22. INTRODUCING A NEW FINANCIAL METRIC I wish to introduce a new financial metric for these times. Its called the IG Ratio or the IG number. The IG number determines how much the stock of a company will benefit from the "Inflationary Gift" from all the Feds money printing. i.e. the reduciton in the real value of a companies debt caused by inflation. Highly indebted companies with long term debt will benefit much more than companies with little debt or that have short term debt. The IG number will tell investors how much a companies stock will benefit from the inflatio
  23. KEEPING THE INTEREST RATE CURVE PINNED The Fed has to print an awful lot of dollars to keep interest rates pinned. This means a falling dollar Reality 101
  24. ANTICIPATING THE INFLATIONARY GIFT A lot of the stock market rise has been an anticipation of the "Inflationary Gift" What is the "Inflationary Gift" It's the transfer of the real value of a companies debt from lenders to shareholders via the inflationary mechanism Remember inflation is a transfer mechanism from lenders to borrowers. Its currently running at 2% per annum. About to become much higher in 2021. And the value of this gift is entirely determined by the FED.
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