Friday will be glorious...

In the mean time enjoy

Letting go of some long exposure...raising cash

Selling WFC at $16.45 (caught the falling knife this time)

Selling some APWR at $5.35

Selling some DUG at $23.00 (hoping to buyback a boat load at the $20-$21 range before CVX and XOM report later this week)

Now at 60% cash, 20% long and 20% short

Saturday Night Music - "Da Baddest"

Current asset allocation...

30% cash

30% long (mostly alt energy names that will likely bounce the highest with any Obama rally. Also have some bank exposure via WFC)

40% short (mostly short Oil and Gas names through the DUG)

My oil thesis continues to be confirmed. Did you see the inventory build this week? Enormous. More than 3x the expectations! Oil below $50 for at least the 1st half of year, no doubt. The lack of available credit is really preventing the speculators from pushing oil up and that's good for the oil bears long term....not to mention American drivers :-)


Position: F**k OPEC & XOM

UPDATED POSITIONS: Fuck John Thain

Damn I'm good....

my call for a Geithner rally was pretty on the spot (not to be self-aggrandizing :-)

The only thing that kept me positive for the day was my WFC scalp trade. I have kept the trade on even though we blew past my TP.

P.S. I will no longer speak to people named Doug, Douglass, or any derivation of the word "DUG."

Is another Geithner rally brewing?

Although the TA action clearly shows we will retest the November lows soon, nothing goes down in a straight line. Essentially the market will give itself some bullsh*t reason to bounce higher....I think Tim Geithner's confirmation as Treasury Sec. will be that reason (remember we rallied hard when Geithner was nominated...another bullshit reason in hindsight).



So why hasn't wall street already priced in the confirmation? Because of some bullsh*t tax evasion excuse...puhhhlease, every motherf**ker in Congress evades taxes in some form or another (Charly Rangel? etc.). Nevertheless, the idiot talking heads at CNBC keep yapping about this tax issue...so I figure wall street is buying into it as a serious "hangup" because: "If CNBC reports on it, then it must be pertinent information."

And yes I do believe wall street is stupid enough to watch and believe CNBC.

P.S. Confirmation Vote is set for Thursday.

Bought some WFC @ $14.44

Probably the stupidest things I've ever done, since ALL BANKS are f**ked long term. But this is a scalp trade with a tight stop at $13.75.....my TP is $16.50

Remember that the 2nd round of TARP was passed, so Obama can begin showering these zombie banks with cash immediately...if he wanted to.

Dollar Menu Millionaire Time

I took $7.50 of my gains from today (no losses suffered, despite the down tape :-) and went to Mickey D's for a celebratory meal...twas good

Fun Fact for the day...

With storage tight on land, there are an estimated 80 million barrels of oil being held in large tankers offshore, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

"We're filling up every crevice of storage that anybody can find," he said. "The pipelines are filled up, the terminals are filled up. Refiners are amply supplied. This is a market that definitely has a surplus."

If crude at sea has reached 80 million barrels, it could supply nearly the entire globe for a day.

Despite my bearishness on crude, I will concede that Exxon might not be the greatest of shorting opportunities since it has more than $35 billion in cold hard cash just sitting on its B.S. (perfectly timed for a shopping spree), but I do think XOM should be trading below $65.

Obama can't fix this...

Wall Streeters used to think they were the "Masters of the Universe," now they are reduced to nothing. Biggest lesson of this debacle:

TRUST YOURSELF. NO ONE ELSE!

I'm up 2% today, and that's with DUG refusing to explode higher. Don't worry Exxon's days of mastering the universe will end in due time.

Hat tip to RC for the chart...he and Brian Shannon have nailed this TA action perfectly lately.

Oil Debate: The Amateur Investor vs. Cramer

My 2009 trading thesis on the integrated oil companies is clear:

Why Exxon is overvalued

A potential oil pair trade developing

Synopsis: as long as oil stays below $60 a barrel, companies like Exxon, Chevron and Conoco aren't breaking even on their current projects and are struggling to maintain their historical ROE & ROIC. Consequently, these oil players are substantially overvalued going forward. As an aside, OPEC says it needs oil actually closer to $75 to bring supply into the market.

Disagree with my thesis? Just look at Conoco Phillips' (COP) $34 billion writedown of its goodwill from its balance sheet (goodwill is the amount COP paid above the book value of its acquisition and is the firm's largest portion of intangible assets - basically anything that is not PPE).

The company plans to reduce the value of its equity investment in Russia’s Lukoil by $7.3 billion, Houston-based ConocoPhillips said today in a statement. Other asset writedowns totaling $1.3 billion will be recorded.

The biggest writedown, a $25.4 billion impairment charge in the oil and gas business, amounts to 87 percent of all the goodwill the company had on its balance sheet as of Sept. 30, according to Bloomberg data (Almost all of COP's good will is gone...wow!). The company plans to report its actual fourth-quarter results Jan. 28.

ConocoPhillips said it will have a 2009 capital expenditure budget of $12.5 billion, 18 percent less than the $15.3 billion authorized for 2008.

ConocoPhillips also said today that the drop in commodity prices will affect its reporting of reserves. Some reserves, primarily in North America and Lukoil’s, will be removed from proved reserves based on prices at the end of the year.

Forgot to mention that COP will also lay off 1,300 employees (4% of its workforce). Now ask yourself: Does COP think oil will rise 100% in 2009?

Oh yeah, let's not forget that with Democrats coming into power corporate taxes for these oil companies will probably increase further impairing their fundamentals. Alternative energy initiatives are also coming down the pike sooner rather than later with the impending stimulus.

Not to worry though Cramer is buying Chevron and Conoco for his charitable trust (the one that was down more than 40% last year ;-)

If you want to short Exxon, Chevron and Conoco then grab some DUG. Because of the severe tracking error with these shity ETFs, make sure you buy the dips and sell the rips. The first rip of DUG I'll sell is when Exxon prints $70 (currently $78).

I "HOPE" they're right about TARP II...

I will vote for this [TARP II] and I will do it because of the assurances I got from the president-elect himself that it will be different, that he will use these funds judiciously," said Sen. Barbara Boxer, D-Calif.

"I felt a little bit like after the last one, like Charlie Brown and Lucy," said Sen. Tom Harkin, D-Iowa. "You know she's always pulling the football from under Charlie Brown. Well, Lucy's 's not holding that ball any more. We have someone new holding that ball. Somebody named Barack Obama.

I just "HOPE" that the rate of foreclosures goes down (we saw an 81% jump in 2008). If we can get the foreclosure rate down to 30%-40% in 2009 and avoid the "Pay Option Arm implosion" in 2010 and 2011 (when I say "AVOID" I mean only 25% default rate)then:

- writedowns will slow by second half of 2010

- confidence will return

-unemployment won't reach 20%

-America will ultimately survive (of course this new country won't be the same gluttonous "America" we've known for the past several decades...that's a good thing).

FYI I know I just made a lot of "Kudlow'esque" statements just now, however, Kudlow probably thinks that foreclosures in 2009 will only grow by 1%-5% in 2009 vs. 2008 (so cut me some slack, ok).

Listen!!! I know "HOPE" is a four letter word, but if you don't have "HOPE" for America in the long run (I am talking 10-15 years out) then go f**k yourself and move to France.

Position: long humanity, but still hate politicians and CNBC.