Act right ... (on the radar)

Before we all go put on our 2009 party caps and tiaras, I'm looking into where I'm putting my chips into the coming 1st quarter. If you take a look back, both Nik and I were talking very doomsdayish when the global markets had a slight rally going into December (auto bailouts, global cookie cut financial stimulus', and schizophrenic investors.) Unfortunately my timing I believe was off, but my views have not changed much since. Obviously not a huge fan of retailers, commercial R.E and healthcare right now. The important thing is being able to spot which of these companies are the most vulnerable... right now. Commercial real estate has been anticipated to get hit as companies downsize, renegotiate for lower leases etc, and hell if you can't pay your credit cards and mortgage payments why the fuck would you pay the insanely expensive hospital bills? I got to look more closely at the healthcare sector as those companies have been hacked hard too.

Coming off such a drastic trading year, I'm looking to revise my watch lists as 2008 comes to an end. Keeping a steady eye on commercial real estate: SPG,JLL,CBG, hospitals: LPNT, CYH, and certain clothing brands like true religion jeans, abercrombie. I am still interested in where the hell the video game sector is headed too, I admit I was dead wrong with my short term sentiment on activision but they are better positioned then ERTS, TTWO imo.

Bare with us as my partner is on vacation enjoying Bali (you bastard! haha), I'll be less active with posts (until 2009) as we're prepping the final touches to BULLYBANK.COM, The world will get a better idea of just exactly what the F we're all about LOL! I hope you guys have a great NYE.

- cheers the hot revolver.

MERRY CHRISTMAS BULLIES! 2008 on the I V

We hope everyone had a great christmas regardless of the heavy grinch presence this year. I for one was just happy to beable to spend time with friends and fam and recap what a life changing calendar it has been. Who else basked in the glory of working on the 25th? haha nothing beats chauffeuring clients around to window shop property on xmas day! Anyhow, Merry Xmas and we are expected to launch www.bullybank.com come January 1st! A new year means new money! cheers - the hot revolver

Let's Talk About Quarter 1 of 2009

Things are looking bleak for the first quarter of next year. Today marked the fifth straight day of declines for the Dow Jones Industrial average, which historically rises 0.7% in the days leading up to the holidays. The release of horrible economic data in the past five days shows the economy plunging deeper in to recession.

GDP data released today showed a 0.5% contraction in the U.S. economy last quarter. Last quarter was relatively peaceful compared to the current quarter, which is a horrible sign because the real fall out of the financial crisis is being felt now. Some economists expect fourth quarter GDP to be as dismal as -6%. If it comes in that high, it's going to be a long time before our economy, along with the rest of the world, recovers.

Too add insult to injury we're now seeing modified mortgages default. This means that the lender has re-negotiated with the borrower to sweetened the terms of the loan, and the borrower still can't pay. This points us to further deterioration in the housing markets.

It's really simple, we're not going to see an economic recovery until housing prices stabilize and credit loosens up. The fact that we're seeing housing values drop at Depression rates is tough enough but add to that a credit freeze that still haunts financial markets, which ultimately affects businesses, and we're in for a very tought first quarter.

We've seen a lot of companies initiate mass layoffs this quarter and will see more jobs lost in the coming months. This means less spending in our economy and with tighter consumer credit standards people are going to be strapped for money. The big three are still not in the clear after their bailout, bond yields on GM and F debt still price in bankruptcy, which would mean a lot of jobs lost. Not to mention more government funds down the drain.

So, with all this this and a gloomy first quarter to look forward to, I see no reasons right now to buy stocks. I'm still going to be in sell mode until I see a stabilization in the housing markets. We might see a rally as the new administration gets sworn in but that won't last more than a couple days and will be an excellent opportunity to enter in to new short positions.

I bought Jan. 5 Puts on DRYS this morning as I feel the end is near with this company (no, I'm not obsessed!). The CEO seems to be up to his old shady tricks which lead his previous company to, yep you guess it, bankruptcy.

George Economou, the brilliant CEO of DryShips, owns a private company called Cardiff Marine. DRYS would buy ships from Cardiff all the time and entered in to contracts to buy more ships this year. Every time DRYS cancels a contract it pays Cardiff a cancellation fee. Care to guess whose pocket that fee goes too? Better yet, care to guess whose pocket the fee comes from? It seems as if Georgy thinks it's ok to rape the public company in order to fill his pockets.

Did I mention he's a billionaire who has already bankrupted one public company? It's amazing to be how much money has been pumped in to this stock (DRYS) and yet the writing is on the wall. It's merely a matter of time before the company defaults on a loan, or issues more equity further diluting common share holders, or their counter parties start to cancel contracts. Either way it doesn't look good and I definitely want to be positioned to profit off the event that causes this stock to tank.

The rest of this week should be pretty chill as Wall St. gets fully in to holiday mode (yea, no premium whiskey in the punch this year!) and, your boy Nik, takes a well deserved vacation to Bali! I'll be there until Jan. 3rd, 2009. I'll definitely be in touch with the markets but the focus is going to be on the three B's: beer, b*tches, and beaches...haha. Whaaaa??? I haven't taken a vacation in almost two years!!

-Nik

P.S. - The FULL SITE: WWW.BULLYBANK.COM COMING SOON!!!

SMH...things getting out of hand.

a damn shame...Madoff related Suicide on Wall Street.

a (my) new renaissance

Alright, apologies for such a depressing post earlier. Anyhoo, let's continue regardless of the losses, tomorrow's another day another opportunity! it's only habitual guys, the life of a bully!

I am still very impressed by how well the markets have moved and shown bear resilience the past few weeks. The argument again is whether or not the rally will continue into the new year despite all the negative factors. So are we bottomed out? have stocks dropped to levels that have already priced in all the bad news past,present and future? hard to call. But some obvious factors to keep an eye on are: Obama, post holiday retail results/forecasts, OIL, unemployment, real estate stabilization (and commercial r.e's near term forecast), renegotiation of corp. debts (most recently Macy's), tracking TARPs 2nd half and effects of the 1st(thus far), foreign macro, and global consumer micro! I know broad, broad issues but all very pertinent am I wrong?

The renegotiations between a company and their financier is CRUCIAL. Reforming leases, rates, payment schedules terms and so forth could help certain sectors experience turn around at a much faster pace. In a sense, the TARP and other bailouts should spawn extended hands to companies that deal with the original beneficiaries. Complex? fuck yeah, possible? of course. and I'm sure corp phone lines, conference rooms and contract drafters are VERY BUSY these days.

The scary part in all this is the following: All companies have and are in a probation period, and ONLY the strong SHOULD survive. There's little room for companies who have been breathing off the "spoof" side of the economy and in Jeffrey Gundlach's words the "bogadollars" (bogus dollars). I wouldn't want my money to be caught with the companies that will be filtered out in 09.

A new renaissance as I am going to call it, to bridge and fuse together the fundamental drive of capitalism with the new take on corporate responsibility. Gov, Wall street and Corp.s need leaders of the new school, remember these are the guys who pass the baton down to average investors, consumers, you and me. Does my article make sense now? I hope so. I'll be posting my personal stock picks tonight or tomorrow but I want to leave you with this image. To address the $50+ Billion Madoff Scandal and to the new renaissance...don't get played like a harp playa(z)! cheers - J the hot revolver. ***OFFICIAL WEBSITE BULLYBANK.COM COING SOON!***

back to square 1 ( -99.9% portfolio value) applied for McDonalds

*the day has come, options expire, portfolio annihilated,

*Literally applied for and rejected by Mcdonalds. (click below for full pic)


exactly 600 transactions in 2008 involving the following co.s: LDK,TSL,AOB,STV,VRTX,WFC,ENOC,CROX,ZLC,SBUX,TASR,YHOO,CSIQ,JASO,SOL,WM,WB,UBS,AIG,CC,SNDK,CC,CBG VZ,ANF,ATVI,EFUT,BX,FFCH,MVIS,LQDT,PALM,TZOO,DESC,XRTX,CHL,EDU,STP,LQDT,SSRX,XING... to add insult to injury, the escrow on my client's deal is dead as of yesterday evening, due to the loan not being approved..smh..life of the self employed is rough sometimes haha. *PLEASE proceed to reading the great article about APPLE my partner has written* - cheers the hot revolver
As we come to the close of 2 0 0 8, I push the button...a new year, a new start.

So..what's Steve Jobs next job?

Steve could be a yoga instructor! Maybe a cult leader? I kid, I kid...

This week Apple Inc. announced it would no longer be attending MacWorld (press release). The other kicker was that Steve Jobs is not going to be a key note speaker at MacWorld. Instead, Apple is sending Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing, instead of Jobs.

The moves makes sense, as Apple clearly wants to stay away from Trade Shows and focus more on direct customer channels. The buzz surrounding the news is regarding the clear transition of power that is happening within the company. Job's health has been questioned for months now and his withdrawal from the key note speech could be a sign of bad health. The company is possibly entering a restructuring phase and looking for a replacement.

Being a fundamental trader, it's hard to get excited about a company when it's star CEO appears to be in his final years. It's never wise to invest in a company whose future relies on a star. If Job's leaves, there is no more hope for Apple stock, the thing will tank like Russell Peters at the MTV Movie Awards. This part is all speculation and not something I'd be interesting in basing a trade off but it definitely deserves mention as it has future potential.

What does make sense is declining Mac desktop sales and the worst retail environment this country has seen in decades. Apple's retail sales accounted for 21.8% of revenue in their fourth quarter of 2008. Desktop sales were 16.7% of total revenue for 4Q2008. We are entering the age of the laptop but desktops are still used in businesses and homes.

Apple also is getting hurt by the ridiculous prices PC makers are offering for their laptops and desktops. You can get a nice Sony Vaio now for $500 yet a basic MacBook costs double that. Apple's customer base is extremely loyal and willing to shell out the dough for a premium product in a regular environment. In this environment it would be shocking if Apple's sales grew at prior levels, especially if they're not willing to lower prices.

With that in mind the company issued guidance for the December quarter of $9.0 to $10 billion in revenue and EPS between $1.06 and $1.35. This is a broad range on purpose. The company admitted in last quarters conference call that this current environment is too hard to call. I don't think that Apple will miss but if revenue, or EPS, comes in on the lower end of that range the stock should sell off. If there's one thing the stock is known for it's drastic movements off rumors, scares, or downright negative speculation.

We're going to use this to our advantage. I opened a tiny put position in Apple yesterday and plan on adding to it in the coming days. I think it's time for this company to face reality and for the stock price to reflect it.

Cheers,

Nik

FEDs Cut Rate between ZIP & a Quarta'!

In their continued effort to help revive the economy off life support, the feds have cut the overnight fed funds rate between banks to zero/.25%. This is a historic low, the previous being set was 1%. The way this is to work is for banks to eventually pass the discounted rate onto the consumer & business loans they make to the general public. *Problem is, many rates are as low as they are willing to go in some circumstances. This is to help loosen available money, lower rates charged and hopefully encourage the circulation of money via spending, in other words they need people to un-stitch their wallets, polish their atm cards (credit cards preferred) and BUY BUY BUY! HURRY UP AND BUY! *My opinion is this: The abrupt and severe collapse of the credit system the past year calls for complete reform, reform of capitalistic America as a whole. Some of you might be *eeewed away by this statement or confused, but I sincerely mean it, we can't go back to the old spending habits (for awhile), that's only going to prolong the inevitable, the system has flaws, please fucking change it. I see this as one of the last tricks in the bag from the Feds, hopefully it works. Biggie's song Mo' money Mo' problems never seemed so relevant, '09 show me the money - cheers the hot revolver.

*deep breathes...* time-out from our reality into the super elite's reality (Dayaam!)

Although we here at BullyBank are having one of the worst weeks of our trading "careers" and although my portfolio is well on it's way to closing this year at a value of $19.97 (no typo, I will post a screen shot the day of), I wanted to reiterate one of the most ridiculous and affluent travel packages revealed this year, being offered even amongst the global financial rut! where? the only place on earth that seems to be immune and regression proof, DUBAI of course! Introducing the first $1million dollar travel package (1 weeks worth! trip for 2) courtesy of the Emirates Palace in Abu Dhabi, Dubai!

The suite (sweet) package includes: first-class airline tickets, a chauffeur-driven Maybach, a personal butler, daily spa treatments, private jet charter (for the week),jetting to Iran to weave Persian rugs, and dive for deep sea pearls, which then will be used for your own custom designed jewelry. Royal golf experience and
make your own perfume with experts from YAS Perfume. $1million dollars for 1 week, that equates to spending $100 per minute. SMH, amazing what dreams are made of, and what we are chasing after. - cheers the hot revolver Check out the Virtual Tour >
EMIRATESPALACEvirtualtour

From a Benz to a Datsun

Yea, it's like a backwards Kanye West track. DRYS is up approximately 82% since December 8th - I don't think I've ever received a swifter kick in the..yea you get it.

I can understand a stock being up 82% in a week because the company just came out with some stellar bit of news and their worries are now behind them. I can understand a stock being up 82% in a week because of a buyout at a premium to the market price. I can even understand a stock being up 82% in a week because of rumors being fed through malicious channels.

When none of those things happen, I can't understand why DRYS is up so much. People can point to valuation all they want, the grim reality here is that valuation is based of earnings, when a company is projected to not have earnings there is no way properly value them. Better yet, when bankruptcy is a serious consideration valuation generally means the amount of pennies on the dollar that are left.

This is the world that we live in and of course, I overlooked something. One of my favorite books of all time (Reminiscences of a Stock Operator) mentions repeatedly that traders should not fight the tape. There is no point in fighting the tape, rather try to go along with it.

For the past week now, I've been in a vicious fight with the tape. Of course, it has cost me a lot of money. I should have sold off my put options on DRYS on the first day that it rallied. I kept on telling myself that I know this company, I know it's fate, I know where it's headed and this is just a fools rally.

I discounted timing, big time. The company could be headed for Chapter 11 but for the time being it looks as if it's going to be trading in a range of $7-$11 until we receive news from the company itself. The stock would have to go down 60-70% in order for me to make a profit - don't worry, I'm not holding my breathe.

November was a picture perfect month. December is turning out to be the worst trading month of my life and all because of a huge position in DRYS. My put options expire on December 19th (also my birthday - what an awesome present!), so we still have four days for the stock to tank.

I'll post up my thoughts on this and the lessons learned as the week goes on. This is going to require a serious assessment of what went wrong and how we can prevent this from happening going forward.

For now, I'll be laying in the fetal position on my bed, lol.

See you guys tomorrow. Dow futures currently down 9 points, S&P 500 futures down 12.5.

-Nik

Hip to the Hop to the Hippity Flop! damn...celebs closing shop...

So what do hip hop pioneer Doug E Fresh (most recent), TLC lead lady T Boz, Fugee's legend Wyclef Jean, Co-founder of Rocafella Dame Dash, American Idol Fantasia and Super Producer Scott Storch all have in common for 2008? that one ever so sweet word...FORECLOSURE...say it with me now... anyways, all jokes aside, the affluent times of big money spenders have come and gone (for these guys/gals), be smart with your money period! (wyclef...smh...40 luxury cars...really? 40? i think that money will be gone for a bit longer then november bro). - the hot revolver

celebrity sighting on wall street! and my monitor. ...in tandem? (sigh) *ALSO new cc regulations?

Gimme a f*cking break Grimm! anyways...moving on...

***ON DEC. 18TH. Feds review and vote on new credit card regulations. This could be minor relief for the consumer w/ the following inplace:

" * Banks would be prohibited from increasing the rate on a pre-existing credit card balance (unless 30day defaults)

* Banks would be prohibited from using the universal default system (changing cc terms at their discretion if you default on a totally separate bill, PGE, comcast for example.)

* Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.

* Banks would be prohibited from imposing interest charges using the "two-cycle" method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.

* Banks would be required to provide consumers a reasonable amount of time to make payments."

This could spawn direct negative impact for issuers like visa, master, discover, a.express not to mention the banks behind them. To keep it simple, the consumer saves on fees and erratic interest adjustments, but this means limiting the amount of credit available (hell yeah, if i can't charge late fees or raise interest, wtf would i lend you more money?), higher interest rates for new applicants, more stringent terms and more risks for the issuers, ultimately this alone will not stimulate consumer spending as "needed".

I do however agree that reform in the credit system is a must. BOA, Citi, Chase (jp morgan), all have their hands in this. Now if this takes a further toll on the behind-the-scenes assett-backed security investors, if unemployment continues to rise equating to higher probable debt defaults... I wouldn't be surprised if we witness another wave of financial institutes being on I.V bags in 2009...let's hope not. (i wish i acted on the dec. 35 RIMM puts week ago, and I am really looking into January 10 BAC puts, but I can't do shit with my capital strapped up in these decembers!)

- cheers the hot revolver

2 0 0 9 - the hot revolver says...

I'm numb. Someone pinch me please, better yet slap me, kick me in the bozack, just wake me the F up! My 2008 horizon is creeping to an end, it is a harsh and agonizing reality that I may close the year with my portfolio worth close to a single andy jackson ($20) (IF these damn dec. puts expire worthless on dec. 19th, six trading days and counting), the same portfolio which was once a six figure valued account. (feb. 2009). Here's a peek at the graph since June (my bday month)

*Keeping EMOTIONS out of your pockets* - I am expecting real estate deals to close for me first month of the new year. Usually I would not hesitate to allocate these funds back into my stock account, entirely. But I now let bills take precedent over my once 'goose that laid the golden egg'. I'm planning to spend 1/4 of my commissions paying debt and 3/4s into my stock account. I'm having revelations. My multiple theories and strategies of investing are reflected in my actual stock positions, options trading and even in simulation contests like the one on CNBC. Why is it that my CNBC portfolio (up %40 since Nov.) is kicking the shit out of my real-money accounts? click to expand pic.
I'm being rational, reflecting experience and data in deciding where to invest my money on both counts, so why are my thoughts torn in these different directions? I am confused within a confusing market, a dangerous combo where even a professional's judgment can become throwing darts at a board...plain and simple. I've decided to go back to basics, and I mentioned this to Nik a few nights ago, back to basics will be reflected via my trading decisions starting 2009. WWW.BULLYBANK.COM our official website should be up and running january 1st, THAT...I'm fcking excited about.

You guys can see a more conservative view on investing (the extreme declines I've faced really blurred my vision and judgment this past 6 months. I speculated more with stocks and options outside of my comfort zone equating to nothing but bad results and lessons learned.)

One word : TUITION , and you know what? I've paid enough of it. See you guys next week - cheers, the hot revolver.

Citizen Hope Miracle Day - FOOD DRIVE SAN FRANCISCO.

Sorry, don't mean to spam the blog but the hot revolver will be attending and volunteering a trading day to help distribute food to families at pier 48, San Fran. CITIZEN HOPE details here for those interested >> click below MIRACLEDAYfooddrive

Seriously, We're Paying Them to Make Cars...

Yay, more money down the drain!

(click the picture for full blown glory)

-Nik

eeer....something to laugh about yeah?

...count down...

With 7 trading days left for december options, the 1 week count down begins today before my positions expire worthless. My attitude toward these sesame street rallies? (refer to pic) calls: ATVI puts: ANF, UBS, VZ - cheers the hot revolver P.S The Official Website coming soon! 2009

One Last Hurrah for DRYS?

DRYS closed up 31% today, after closing up 51% yesterday. Notice the volume at 73 million shares, or roughly 2.5 times the float. Something really weird is going on here because the company hasn't released ANY news. Granted the entire dry bulk shipping sector rallied today it still doesn't explain the run that DRYS has been having.

I am holding on to a huge put position in DRYS and I'll outline how badly I'm getting raped on this trade:

Bought OOCXZ at $30
Current Value = $0

Bought OOCXA at $113
Current Value = $20

So, now that you feel my pain, let's discuss why I'm not tossing my monitor out of the window in a fit of rage. The most important point: NOTHING has changed. The company has come out with no news, no plan, not a word to justify this movement. This leads me to believe there is either hardcore manipulation going on (I'm not bitter, this stuff happens all the time) or value investors caused shorts to cover this stock up so much. Spot rates still remain near their lows and the BDI is not climbing with stock indexes.

The only thing that worries me is my timing, I might have pulled the trigger too soon on this company. My puts expire on December 19th, giving me 10 days to realize a profit and 10 days for DRYS to come out with bad news. Anything is possible.

My puts on Chesapeake Energy didn't move too much today as the stock didn't see any significant movement. Natural gas moved up slightly today but as you can see from the futures there is not huge upside movement predicted any time soon. I'm going to salvage what I can by holding on to my position and hopefully selling for a minimized loss.

Trading in this market really requires an iron stomach and an open mind. These past two days have been a huge test of my nerves. I've done my research and continue to look in to these two companies as much as I can. For me, it's not all about the money but more about being right and if I am wrong, I need to know why. In the case of DRYS I cannot find a reason. With CHK I doubted their options and liquidity position but still believe the stock can see some downside. Remember, if your not buying it, it makes sense to sell it.

Let's see what tomorrow has in store for us. Futures right now are pointing to a higher open but that can easily change over night.

Cheers.

-Nik

Look...Obama = great, ignoring the facts? = not so great.

*tick tick tick ... for wallstreet to ACT like brighter days are just around the corner, they might want to ask how f*cking long of a block we're strolling down in order get there! Look, I hate sounding bitter and so ghad damn beary, but there is nothing but a continued storm of horrible news yet the markets give this oscar worthy performance going into the new year. It will only take a few more BK filings or trails of tears to washington, and we will face the music head on. I hope I am wrong, but if I'm not .... refer to the pic below. I'm keeping a close eye on these retailers, and ears open to foreign policies. Don't forget, we are BULLYbank not BEARYbank so I would welcome a complete market turnaround, but I don't welcome falsehood and bullsh*t bear market rallies who only set traps for dumby bulls. My investments against verizon weren't the best moves of my investor career, but I am holding the dec. puts. I am still looking to buy more UBS puts at the right price, and RIMM, ANF are indeed on the radar. *cheers - the hot revolver.

Bear Market Rallies

A broadly accepted definition of a bear market is when the market sells of at least 20% from it's previous highs. The S&P 500 closed 38% from it's previous high set in October of 2007. We are definitely in a bear market and are going to experience bear market rallies.

A bear market rally is when the markets come back 10-20% in a clearly evident down trend. They come suddenly and can last for days on end. After the crash of 1929 there were many bear market rallies, however the general trend was downward and these rallies would fade after a couple days leading to the bottom in 1932. We have clearly been in a bear market rally the past couple of days.

Fundamentally nothing has changed. Investors are showing extreme confidence behind an infrastructure focused stimulus package that President Elect Barack Obama promises to sign. The funds will most likely be focused on clearing the back log of projects that states cannot fund. Prior government efforts to boost the economy by pumping funds in to infrastructure projects have proven to be riddled with problems. Many believe the inefficiencies inherent in government will create a lag time in which the economy will worsen and there is also great concern that projects will run over budget, as they typically do.

As the economy worsens the stock market will have to price in the changes, meaning that after this current bear market rally is over we're most likely heading down in a new leg of sell offs. December will prove to be another tough month for employment, consumer spending, and capital expenditures for companies. We're heading lower, in times like this patience is absolutely key.

DRYS closed up more than 50% today and my puts got obliterated. I'm now looking at paper losses in excess of 80%. I would normally be upset and angry but as I said above we're in a clear downtrend and I can't let a bear market rally make me second guess my research. DRYS rallied off no news specific to the stock, value investors bought this up and shorts were forced to cover, leading to a spectacular day. DRYS is trading like a stock headed for bankruptcy (think BSC, CFC, LEH, FNM, FRE, etc..) which means it's going to see huge swings in both directions. Nothing has changed with the company, so I will hold on to my position anticipating a huge sell off based off horrible fundamentals.

CHK rallied 2.76 points, or 24%, off news that the company would scrap it's 50 million share sale and sell assets worth $4 billion instead while cutting down on capital expenditures. While this is a smart move by the company natural gas continues to sell off. So, they're loosing cash generating assets and are getting paid less for their product. Although I believe the bankruptcy scare is over, it's up in the air when this company will return back to profitability. My puts in CHK got hammered today and I'm showing a substantial paper loss. I'm going to hold on to the puts and wait for the next downward leg in the markets. Although the idea of being profitable on these puts is out the window, at least we can make some of the money back. It will be very interesting to see if CHK can actually stay solvent without substantially diluting their shares - they claim they can but so did Bear Sterns.

Mama said there would be days like this and boy was she right. It's important to note the amount of volatility and risk that is part of this current market. It's also important to stick to strategy in times like this, nothing fundamentally changed today so I had no reason to change my positions. CHK still has hurdles it needs to clear and DRYS hasn't mentioned a thing on how they're going to come out of this alive. It is agonizing to watch your positions lose so much in one day but it's part of the extremely volatile job of trading options. I'm not going to loose any sleep tonight.

Let's see what tomorrow has in store.

-Nik (1/2 of the dynamic duo crazy enough to trade options in this market :).

A picture is worth 1000 pts? *ouch*

Me and my bear claws are getting torn a new one by the bullish markets ... I am considering dumping all my holdings of UBS, VZ, ATVI and putting everything into Abercrombie puts. keep you asshol*s updated while i stitch up mine... ouch. - cheers the hot revolver.

Market's set for an Erattic week.

Up or Down? i'm tired as hell and about to close shop for the night. Some pertinent earnings reports, op. results and conference calls set to release this week including, autozone, krogers, H&R block, ciena corp, costco, chesapeak, amazon, merk, AT&T, 3m, comast, covering a broad spectrum of industries that have all been in the spotlight as of late... seems like across seas the asian markets had one hell of a opening day, with major indicies seeing substantial gains. Optimism of the potential auto bailout? doesn't matter too much to them but perhaps the reiteration of stimuli packages (world wide).

I coin the term "hollow optimism" because quite frankly, my ass just doesn't see what the F there is to celebrate about right now, and even going into the first quarter of 2009. I've said it before, and I'll say it again...I'm going to look at these up days as opportunities to capitalize on a better short entry point or discounted puts ... because all and all, this thing is far from over. Unfortunately most of my eggs are incubating in those Verizon and UBS puts. Although I will be keeping an eye out on abercrombie, research in motion and bank of america...hell, Nik let's see what Chesapeak has to say tomar morning too - *on a side note, I hope escrow opens this week for the house I just sold or else...it could get annoying. cheers and g'night the hot revolver.

Oh Shit, It's the Remix!

Busta Rhymes " Arab Money (Remix) " Feat. Ron Browz, Diddy, Swizz Beatz, T-Pain, Akon & Lil Wayne

*whistles*

Hope you guys are enjoying your weekend!

Pick Your Poison

We had more dismal news reports out today. First off was the the unemployment rate and jobs report. The United States lost 533,000 jobs last month and the unemployment rate is at 6.7%. Most economists were expecting unemployment to come in at 6.8%, so that didn't come as much of a surprise. The number of lay-offs definitely did.

Next up we have home loan delinquencies and foreclosures hitting record levels. It's now approximated that one in ten Americans is behind by at least one month on their mortgage. The Fed is working on a program to buy more home loans in the form of mortgage backed securities, in the hopes of dropping borrowing rates to 4.5%. The problem is not with rates, it's with banks unwillingness to lend money and Americans inability to meet stricter credit standards that include a large down payment. We need the housing market to stabilize naturally, unless the government actually buys houses on the market, they're not helping much. Until we see a bottom in the housing market, the economy will continue to tumble.

Auto makers were back on the Hill this week pleading for government assistance so they can continue to do horrible business. Congress is still torn over the terms of any kind of bailout and Chrysler has already hired bankruptcy lawyers. This really shows their optimism for the bailout and the business in general. Meanwhile, General Motors is laying off more people, a necessary step but one that does not help our economic condition.

With all this bad news, Wall St, in it's continued bouts of optimism rallied hoping the government would step up bail out efforts and flush more money in to the system. The Dow ended the day up 259 points at 8,635.42, the S&P 500 up 30 points to end at 876.07, and the winner for the day the Nasdaq was up 63 points (4.41%) to close at 1,509. The government will be forced to do more but what remains to be seen is whether or not it will help things. We should give pull back next week, although any spin on bad news, or actual good news will send up sky-rocketing higher.

I bought more puts on Chesapeake Energy today at a 10 dollar strike price. Natural gas continued to sell off but CHK didn't drop as much because of the broader market rally. My puts on DRYS got hammered today, continuing the trend in this stock of no news is good news. I'm not worried and I'm going to stick to what I believe: the company has limited options and a huge sell off is coming. Just have to wait patiently.

This was a great week for me and my partner, The Revolver closed a HOT real estate deal this week. So, we both getting ARAB MONEY...haha.

Hope you guys have a brilliant weekend. It's time for Bully Bank to get it's celebration on!

Werd :)

-Nik

*Another Iphone "Killer" (R.I.P bb storm imo haha)

*looks promising...


***CONGRATS NIK on yet another amazing play! "ARAB MONEY!!".

Paying for Next Semesters College Tution in One Trade

I sold my Chesapeake Energy puts in the last hour of trading, nice sell off there created the perfect opportunity.

Bought CHKXV at $70
Sold CHKXV at $210
Total Gain on Trade: 210%

The Department of Energy released a report on natural gas inventories today that caused a sell off in natural gas. That sell off in natural gas triggered a sell off in Chesapeake, which was beautiful for me. This one trade will pay next semesters tuition + books + other fun stuff.

On to DRYS: This stock is in it's own universe. There's a lot of conflicting media regarding the company. A lot of investor websites are calling it undervalued and a great buy - they're ignoring the massive debt load the company has and the fact that their assets have depriciated by 60 - 70%. My Dec 5 puts are still profitable for me, however my Dec. 2.5 puts are showing a 50% loss. No biggie, this company doesn't have many options, so I'm going to hold until bad news comes out (should be soon).

High five to a brilliant day!

-Nik

Pause *take a glance into real estate.

**quick side note** Congratz to Lil Wayne for 8 grammy nods incl. album of the year! and after previewing half a dozen tracks, Jamie Foxx's new album will be FIRE! ok back to bully business:
*UPDATE* One of my client's offers was officially accepted today (applause on their behalf) so I am looking forward to escrow closing and my chunk of the commission in January (short sale deals are a pain!!). Anyways, just a tid bit for you real estate savvy or r.e interested folks ( link at the end of this post). As a broker, I'm seeing unusual amounts of overbids and activity as of late in all REO / short sale inventory. Buyer's are scrambling to own homes in neighborhoods that are exactly that, "hoods", but who can blame them? $100,000 mortgage with the right program could equate to a fixed 30 year rate at about $700 a month, that's including PITI (principle, interest, taxes, insurance), note: houses 3bedroom+ easily rent for $1000+, and with some tlc work could qualify for government housing voucher progs (section 8) for steady income. These are below late 80's prices when my family first bought a 2 bedroom home in San Pablo, CA for around $160,000! crazy. The housing woes still have room to go, but there isn't much more room to slide when you're prices are competing against your retail automobile sales lot (I for one would rather spend my money on a shingled roof as opposed to a convertible roof ya dig? )- the hot revolver. TO READ MORE CLICK BELOW >
Houses under $100K (Bay Area)

again.....cute bounce ...real f*cking cute.

yes I am aware I used this same image less then 48hrs ago...- cheers the hot revolver (VZ up to $33 does not help my dec. puts at all...haha)

Nice Try

We saw a pretty good bounce back today after yesterday's plunge. The rally was lead by financial companies - Bank of American and Citi were up 12% today but the rally didn't phase my plays.

I started this week holding on to OOCXA and bought a healthy amount of CHKXV this morning - about 20 minutes after open.

I've explained before my reasoning behind DRYS so I'll discuss my reasoning behind Chesapeake Energy. There are two major reasons for me going short:

1) Their operating cash flow is not enough to service their capital expenditures and heavy debt load. They have already begun selling assets and diluting their stock. They've registered 50 million new shares to sell, hoping to raise a total of $791.0 million - roughly $15.82 per share. The market does not expect the company to get this price and thinks CHK will have to take more drastic action - it's priced in to the stock.

1) The price of natural gas has fallen off a lot this year and inventories are rising, signaling that prices will stay low. CHK needs cash from their natural gas business and with prices this low, they won't get it.

CHK also uses derivatives to hedge against price fluctuations, they appear to be loosing big on those right now. If the company does not get a serious cash infusion they'll be close to bankruptcy.

I'm going to hold on to both of my positions for at least a couple days. If anything I'll let the DRYS puts go before the CHK puts.

-Nik

P.S. - HAHAHAHAHAHHAHAHAHAHHAHAAHAH at GM. Wagoner's ready to DRIVE to Washington D.C.? This is the same company that asked the FAA to block tracking of their company jet. Sigh...

cute bounce this morning...

time to buy puts and short.
- cheers the hot revolver.

Well well well ...

**updated**I guess people came to their senses, and the markets are down big! both my partner and I were well positioned for a market downturn (me: UBS nik: DRYS). I cashed in on 1/3 of my contracts earlier this morning at a 33% gain entry $45 / contract exit $60. I'm holding more then half because I am thinking there is more room to go on UBS, it just traded under $11 for the day.

Remember the UBS play was a chunk of my portfolio I needed this! haha, I am keeping an eye on VZ dec. 27.50 and 25 puts as well as YHOO 12 / 13 calls for a side play later this week perhaps, the reason? VZ I'm a former customer who jumped ship and I have a buy to open limit order for 20 dec. puts today. Yanghoo? Carl Ichan's recent increase of his stake in the company and also the erratic reports on the on-going bullsh*t between microsoft and yahoo, rumor has it that there was another deal arising while both co.s denied it immediately...hmmm..could be suspect. But I wouldn't be interested until the stock was closer or lower then $10. Be back later guys. cheers - the hot revolver.