When I was trying to get my first job on an institutional equity desk in my early 20s, my old man gave me some good advice. My father worked as a research director for an independent Canadian brokerage firm. Although he was not able to get me any interviews on trading desks, he understood how the game worked. My dad told me to pick the six best firms, find out the names of the head trader, write a specific letter to each one explaining why I wanted to work there, and then follow up with a phone call. I was fine with following the first part of his instructions – it was that last one that put butterflies in my stomach. When I tried to duck the phone call part of the advice, my old man told me in no uncertain terms that this was the most important part. So I picked my firms, sent off the letters, waited a couple of days, and then tried to summon up the courage to make the phone calls. I decided to go with my number one choice right off the bat. At the time, Gordon Capital was the premier independent Canadian equity brokerage firm, so I dialled the number and asked to speak to Howie.

“Gordon – Howie here.”

“Good morning, my name is Kevin Muir and I sent off my resume a couple of days ago. I was wondering if,” I started with my spiel.

“I don’t have time for this,” Howie barked back.

I heard a click, and then dial tone.

Holy shit. These traders are mean. I knew it wouldn’t be easy, but I didn’t expect them to be this mean. He didn’t even listen to me. He hung up in my face before I completed my first sentence.

I would like to tell you that I had the fortitude to shake it off and call the next trader, but I didn’t. I was a 20 something year punk that was suddenly put off by the idea of calling up these barbarians masquerading as head traders. So I gave up.

That night my dad asked me how it went. I sheepishly told him about calling Gordon and the terrible reception I received. He laughed and then asked how the next one went. I told him I gave up.

As a parent there are a few times where your advice plays a disproportional large impact on your kids life. This was one of those times for my father. In no uncertain terms he told me that giving up was not an option and to make the next call. For this advice (order) I am forever grateful.

So the next day I went back to work making my follow up calls. The previous day I had started with my number choice and it went terribly, so this time I decided to start at the other end. My number six choice was a firm called First Marathon. I looked at the name of the head trader – Mike Wekerle. I dialled the number and gritted for more abuse.

But instead of getting yelled at, on the other end of the phone I spoke to a head trader that was the complete opposite of Howie from Gordon Capital. Mike took the time to chat with me. He was gracious and kind. Although he had no openings, he promised to keep my resume on file.

I now know that Mike is the ultimate salesman and that being kind to a strange kid that had the gumption to call his desk directly was probably the smart thing to do – you never know if I would end up being a client. But at the time his kindness meant a lot. It gave me the courage to make the next calls where I eventually got my job at RBC DS.

Over the years I have never gotten a chance to meet Mike and tell him this story. Most of my buddies all know him, but I ended up being on the derivatives side of the equity market and we ended up running in different circles.

Mike of course went on to be one of the founding partners of the hugely successful GMP Capital. Although he lives a legendary lifestyle – no make that a infamous lifestyle, I refuse to remember him as anybody but the kind hearted trader who took time out for me when I needed it.

Therefore although the next part of today’s story has a little bit of a Jordan Belfort ring to it, I am going to give Mike the benefit of the doubt.

But if there was ever a better parallel to today’s markets, I don’t know it.

Last week-end, returning from the posh farm area north of Toronto called Creemore, Mike pulled his new 918 porsche in for gas.


Brand new Porsche 918 Spyders aren’t exactly a dime a dozen and as far as we know, there are were only two confirmed 918 Spyders in Toronto, Canada as of last night. Now, there is only one. The inflamed $900,000 hybrid supercar (pictured above), was spotted roasting itself into a useless lump of carbon-fibre and ‘unobtanium’ at a gas station near Toronto… meeting its fiery death late last night.
There is no confirmation on what caused the fire yet, but unconfirmed witness reports say the supercar caught on fire when fuel overflowed from the pump and met the hot exhaust tubes on the mid-engined Porsche. Fact is, we don’t know the official cause at this time, so we’ll wait for confirmation before pinning it down to any one thing.
The exhaust system on the Porsche 918 is like no other. It’s pure design magic. In order to reduce heat in the hybrid, Porsche designed the entire exhaust system to exit directly out the top the motor. This theoretically reduces the heat surrounding the lithium-ion battery and makes for some cool-ass design esthetics and we’re sure, exotic performance.
The photos captured by Twitter user David Perry shows the gorgeous exotic just moments after it burst into flames. The burnt Spyder is rumoured to be owned by Michael Wekerle. Wekerle or “Wek” is well-known to Canadians as he’s a bonafide member of the CBC mega hit show, Dragons’ Den. Wek is also notorious for earning the title of the “Bay Street Oracle” during his time as a hotshot Bay street rock n’ roll prima donna. He’s a man described as “Mick Jagger meets Warren Buffett”.
If it does indeed belong to Wek, you have our utmost condolences. We wouldn’t wish this upon anyone, even someone notorious for foolish drunken escapades. Luckily, no injuries were reported and the damage was localized to ‘just’ the one 918 Spyder.


The Porsche 918 is supposed to be a ground breaking revolutionary new technological marvel. This one was driven by a former Bay Street trader super star turned private equity TV personality. This situation epitomizes the new age we find ourselves in. Much hyped new fangled technology that is only available to the 0.01%’ers. The fact that it is now a charred pile of burnt metal, leather and carbon-fibre should surprise no one…

The sell off

The selling of risk assets accelerated yesterday as the S&P 500 and Nasdaq broke key support levels.



Now all of a sudden, the technicians who were previously telling you that everything was hunky dory have all jumped aboard the sell bandwagon bus. Funny how when it goes up, they are bullish, and when it goes down, they are bearish.

I am actually surprised at how quickly sentiment turned. My twitter stream is now filled with calls that we have to go down and test the 200 day moving average. Really? Now that we are 73 S&P 500 handles off the high, it is time to get bearish?

Well, although I am by no means bullish, even I don’t want to be shorting into this new found swoon. How about waiting for a rally to sell into instead of puking down into a hole?

From a short term trading point of view, I wouldn’t want to be betting on this decline accelerating. There will be a time to short again, I just don’t think this is it.

Yesterday we had oil selling off hard and bonds running like they stole something.


Lower energy cost and interest rates are both positives for the stock market. We are in the midst of a deflationary mini-dip. That might weigh on stocks over the short run as risk assets are sold off, but over the long run these are positive developments. It is tougher to get really bearish when these fundamentals inputs are heading in this direction.

I still contend that the big crash is only going to come once the bond market loses faith in the Fed and the other Central Bankers. Until that day, any dips will be met with more Central Bank printing.

Specs are leaning on the short end

The reason for this latest swoon in risk assets is the winding down of QE, but it is being exacerbated by a market that is pricing in a somewhat more aggressive Fed. Although yesterday’s big sell off in the stock market finally put a halt to the rise, the two year treasury yield has been steadily climbing over the past few months.


When you look at the CFTC report, you see that the large speculators are placing big bets on higher yields at the short end.

Here is the net position in US Treasury 2 year note futures.


And in the 3 month Eurodollar futures contract, the short speculation by the large speculators is even more intense.


Although I am already long a small position in the EDU15, I am thinking about picking up some more.

The market is hedging aggressively to protect against a more hawkish Fed. With rates at zero, they are rightfully scared of a Fed tightening cycle.

But the very fact of their hedging, which has now turned into general de-risking, has tightened monetary conditions to the point where the Fed can be slower in raising rates.

At the very least I would be ready for a wicked short covering rally in the short end of the curve, and most probably a steep correction in the monster bull run in the US dollar.


I made a couple of changes to the portfolio yesterday that I want to quickly update. My crude oil position is not working, so I reduced it a little (although by the looks of this morning’s trading, I should have reduce it a lot.) At the same time, I bought some gold. I have been waiting to climb back aboard the gold bull train, and I feel uncomfortable without a decent size position. The sentiment in gold is just terrible, and I am at risk of trying to catch a falling knife, but I think it is time to dip my toe in again.

Also, I think that the GPRO squeeze is nearing an end. The bloom has come off the speculative rose with this latest sell off in equities. I think that GPRO is due to feel the weight of gravity. This time, I bought puts because I am technically adding to a losing position. I am trying to keep the position small because it is a pure punt.