SHOTS FIRED: ACKMAN GOES IN ON MUNGER’S OWNERSHIP OF COKE

This is just about the most ridiculous thing Bill Ackman has ever done, since trying to beat Dan Loeb in a bike race in Montauk, LI.

“I have a problem with Berkshire’s ownership of Coke,” Ackman told an audience of about 200 people. “Coca-Cola has probably done more to create obesity, diabetes on a global basis than any other company in the world.”

“I’m never one for avoiding controversy,” Ackman told the attendees, which didn’t include Buffett or Munger. “What is Coca Cola’s business model? Coca-Cola’s business model is to displace the water that children and adults consume with sugar water.”

Ackman went too far in his critique of the company, which also sells bottled water, milk and fruit juice, Kent Landers, a spokesman for Atlanta-based Coca-Cola, said in an e-mail. “These comments are irresponsible and do not recognize the current breadth of our business,” he wrote.

“You have some of the best marketing in the world and a lot of happy skinny people drinking it in the advertising,” Ackman said. “Unlike the tobacco companies, there’s no disclaimer on the Coke saying ‘replacing the water in your diet with Coca-Cola can cause harm.’ So when Charlie was saying Valeant is a deeply immoral company I would argue that.”

So, the answer to William Albert Ackman’s problems with his wrectched VRX position is to get into a pissing match with legendary Berkshire Hathaway investor, Charlie Munger, who, by the way, is 91 years old.

I thought I was bad for kicking old men into sewer pipes; but this is brutal.

Ackman is sounding awfully thirsty these days. Perhaps Charlie should mail him a bottle of coke.

Numbers just came out, pointing to the extraordinary measures China is taking with their “command economy” to meet grwoth expectations and one has to be wow’d by the sheer stubborness and tenacity the red communist devils are taking to avoid apocalypse.

China’s government spending surged four times the pace of revenue growth in October, highlighting policy makers’ determination to meet this years’ growth target as a manufacturing and property investment slowdown weigh on the economy.

Fiscal spending jumped 36.1 percent from a year earlier to 1.35 trillion yuan ($210 billion), while fiscal revenue rose 8.7 percent to 1.44 trillion yuan, the Finance Ministry said Thursday. In the first ten months of the year, spending advanced 18.1 percent and revenue increased 7.7 percent.

China is turning to increased fiscal outlays as monetary easing, a relaxation on local government financing, and an expansion of policy banks’ capacity to lend, struggle to stabilize growth in the nation’s waning economic engines. Meantime, government revenue has been strained as companies face overcapacity, factory-gate deflation and the slowest annual economic growth in a quarter century.

“With downward economic pressure and structural tax and fee cuts, fiscal revenue will face considerable difficulties in the next two months,” the Ministry of Finance said in the statement. “As revenue growth slows, fiscal expenditure has clearly been expedited to ensure that all key spending is completed.”

 

Bear in mind, one doesn’t avoid the apocalypse, per se. One merely delays its eventuality.

With that in mind, I think it’s abundatly clear by these numbers that the Chinese government isn’t fucking around. Next step is to start murking people to support GDP growth, starting wars and global mayhem to keep the dream alive.

Viewing the entire landscape from above, it truly is hard to remain bearish on global markets when you see all of this effort to keep the pig eating the slop. We’re not ready to slaughter the pig yet. First, we want it to eat MOAR, get fatter, while we prepare the table for a delectable feast.

Coming from the man who told us to move to China, teach our kids mandarin, and then sell our NYC real estate to buy a fucking farm in Lancaster, PA, I’d say his advice is of the ‘fuck boy’ varietal. Pardon my ghetto street slang vernacular. I grew up in a part of Brooklyn that wasn’t gentrified and had to defend myself against savages on a daily basis.

In a recent interview with Barrons, this is what the old bow’d tie had to say.

“Right now as I look at the world, I’m not terribly optimistic. The American stock market has been in a bull market now 6½ years. In America we’ve had economic setbacks every 4 to 7 years since the beginning of the Republic and chances are we’re certainly getting closer to being due for some kind of correction, bear market even. And the next bear market is going to be worse than most of us have experienced because the debt is so much higher. You know we had a problem in 2008 because of high debt, but since then debt worldwide has gone through the roof. I mean nobody has reduced their debt, no nation has reduced its debt since 2008 – the debt has gotten higher and higher. I’m afraid that the big picture is such that we are going to have more problems in the next year or two and being long most stocks or most investments is not going to be great.”

He furthered, whilst jogging on a treadmill.

“Big problems are going to come from the U.S. essentially because it has been the American central bank which has been the most at fault. We’re the ones who started all this money printing and everybody else of course copied us, but it is the first time in recorded history that you’ve had all the major central banks printing staggering amounts of money: Japan, America, Europe, Great Britain, we’re all doing it. Having said that, you look back at previous bear markets they usually start with a small, marginal country that snowballs and the next thing you know we’re all in trouble.”

Things Jim has been doing, whilst learning to speak mandarin.

“I have been shorting U.S. junk bonds by going long the Proshares Short High Yield ( SJB ) and I’m shorting U.S. tech stocks through the ProShares Ultrashort QQQ ( QID ). I own FXI [the iShares China Large-Cap ETF] and ASHR, [the Deutsche X-trackers Harvest CSI300 ETF] as well as some based in Singapore. But the best investment might be AMP Capital China Ord (ticker: AGF.AU ) units listed in Australia, which is a closed end fund trading at a big discount. I would probably start to buy oil in a small way, energy in a small way. I own gold, but I wouldn’t buy gold at the moment. I still expect a great opportunity to buy gold in the next year or two or three. I guess I would buy agriculture with both feet, energy with a toe and watch the others. I would certainly put a fair amount of money in agriculture. It could be 10% of a portfolio.”

This man is the Benedict Arnold of our time.

According to a basket of raw material ETFs that I created inside Exodus, Jim’s favorite asset class is down 45% over the past 3 years. The deflationary vortex has eaten Jim Rogers’ brain.

I wrestled with the title of this post, since I’ve seen a lot of bad tapes. Despite being up 16% for the year, this is, by far, the worst tape I’ve ever seen, for a multitude of reasons. There are so many wild cards, cross currents, fuckery on a grande scale. It’s really hard to keep up. Bear in mind, I made all of my gains and more before the summer. Since then I’ve been spinning my wheels, getting clown-raped by Mother market.

There are no places to hide. Literally, aside from the mega cap standouts, almost every single sector has been shredded this year, even utilities.

Want to hide in REITs? Sorry, you’re fucked now because, umm, yields are going to 0.25%. There’s no way your 5% divvy can compete with that.

How about the awesome biotech/drug sector? Sorry, you’re fucked there too. See, drug companies have been taking advantage of people for the past 100 years. But since it’s an election year, they’re susceptible to political pressures and their share prices are no longer sacred cows.

Can you even dream about a scenario where retail was a safe bet? We all know the shopping mall is a centre for the deflationary vortex to chill, drink milkshakes, frappacinos, eat burritos.

You literally GET NOTHING, fucking around with this market for more than a week. Trends get broken before trades settle. The oil and gas sector, the steel sector, the copper sector, the natural gas sector, the coal sector, the motherfucking grocery stores, the solar sector, the 3-D moronic computer sector, LEDs are for the birds sector, the high end casual dining sector, the aluminum sector, even the hospital sector are black nothingness, whispers in the wind that lure people towards it for the intent and purpose of ruining them. The prices are lying to you. This is siege warfare and the Federal Reserve is outside our city with catapults, launching dead, diseased bodies, into our city–infecting its inhabitants with a zombie plague that is sure to kill us all.

NOTE: If you want to make sense of this mess, sign up for Option Addict’s 5 day iBC Conference Online. He’s one of the few people who’ve been seeing this mess and able to create art with it.

It’s like his whole world is being tossed on its head and someone is jumping on it, trying to break his neck.

We all know what Ackman and Valeant did in their attempts to acquire AGN were fucked up and constituted insider trading. However, last year was the year of Bill and nothing went wrong for him then.

But this year is different.

Valeant and Ackman said there was no intent to defraud, and that they breached no duties by sharing information before the takeover bid became public.
But the judge, without ruling on the merits, found “serious questions” as to whether “substantial steps” had been taken toward a possible hostile bid, which would have required Valeant to disclose more or Ackman to stop his buying.
“Plaintiffs must plead defendants knew they were in possession of material nonpublic information at the time of the trade and that they acted with the intent to deceive, manipulate, or defraud,” Carter wrote. “Plaintiffs have alleged both elements.”
Valeant spokeswoman Laurie Little said the Laval, Quebec-company was disappointed with the decision, and believes it complied with securities laws. “We look forward to presenting evidence to establish that we did nothing improper,” she added.

I’d pay money to see Bill have to explain himself in front of a lowly judge, educating the courtroom as to how putting 40% of his hedge fund into AGN, while working in secret with VRX, to takeover AGN, wasn’t isider trading.

When last updated, Greenlight Capital reported a year to date loss of 16.3%. However, judging by his positions and deepening losses in some of his top holdings, one has to wonder how deep can the rabbit hole go?

NOTE: Apple, which isn’t listed above, was his top holding in recent filings.

Greenlight Capital was up 19% in 2013 and 8% in 2014, so this year’s losses aren’t exactly typical. Nothing about 2015 is typical, with traditional correlations and trends being tossed into Sesame Streets garbage can for Oscar to fiddle with. Nevertheless, I think it’s important to accentuate the losses of industry professionals, like Ackman and Einhorn, to paint an accurate picture of just how difficult 2015 has been. Judging by the YTD status of the major indices, one would think it was a boring year.

Pffff.

This fucking PAH position has become an albatross around my neck. Thanks to my faith in William Albert Ackman, I am being dismantled in this fucking PAH position. His losses deepen in VRX, daily, and anything related to Ack is getting shredded. This is a horrendous year, a comeuppance if you will, for the hot shot hedge fund manager. Guys like Einhorn, Ackman and Paulson are having their lunches eaten for them. It’s as if Gordon Gekko himself was gunning for them, trying to send them mail COD.

Thank God I am in COST, otherwise my book would be suffering the fate of 10,000 hells right now, as my SHAK, PAH, FCX, CNC positions melt away like a candle in an inferno. This market fucking sucks.

That being said, I am merely positioned wrong, so I can’t get too upset over my childish stupidity. My SBNY position is ripping mammaries straight off the torsos of anyone in its path. The smart trade, ahead of the jobs numbers, was short commodities, long banks. I’ve said it here 1,001 times: when rates go up, banks will rally, due to the steepening of the yield curve.

What did I do?

I bet on Bill “Fucking” Ackman.

FML

Say what you want about this environment, how fucked up it is with western government saddled with insurmountable amounts of debt, fueled by QE. But what the western bankers have accomplished here is nothing short of a miracle.

By hook and crook, they’ve convinced the world is lend them money, bullshit economies with fucked up demographic trends, and PAY THEM for the pleasure of doing so.

Imagine taking out a mortgage and the bank paid you for lending you money. Sounds bizaare, no?

Theoretically, the more these countries borrow, the more they stand to make. The profits from these exploits can, in fact, be used to pay down the debt. Talk about fuckery on a largess scale.

Here is a chart of all the European 2yr bond yields. It truly is something to behold.

Food for thought, mostly all of those countries have better borrowing costs than the U.S., whosr 2 yr bond yields stand at 0.86%. With European QE in full retard mode, yields have been diving lower, pretty consistently. It’s very possible that 10yr yields will soon be negative too.

Alas, the wonders of being a central banker.

The WSJ is out with another expose on Theranos, their favorite whipping pole in a seemingly endless field of privtely held whipping poles.

The crux of the issue is the fact that Theranos’ main pitch product, the tiny little prick of blood being able to replace drawing tubes from the arm, is 100% horseshit.

Now it’s being revealed that Safeway is taking a serious L on a joint venture they had planned, which begs the question: what the fuck were they thinking?

Safeway Inc. spent about $350 million to build clinics in more than 800 of its supermarkets to offer blood tests by startup Theranos Inc.

But the tests never began, the clinics are now used largely for flu shots and travel-related vaccines, and the two companies have been negotiating to officially dissolve their partnership, according to people familiar with the matter.

Current and former Safeway executives said Theranos missed deadlines for the blood-testing rollout. They also said several Safeway executives questioned the accuracy of results Theranos gave to Safeway employees tested at a clinic in the supermarket chain’s headquarters in Pleasanton, Calif.

Safeway was a big growth opportunity for Theranos, based in Palo Alto, Calif. The project, code-named “T-Rex” at Safeway, hasn’t been publicly disclosed by either company but goes back to at least 2011.

The deal was struck before Theranos announced in 2013 a different partnership to offer blood tests to the public through Walgreens drugstores. Safeway signed on as the exclusive supermarket provider of Theranos tests, and Safeway built clinics in roughly half of its stores at the time, one former executive said.

Walgreens Boots Alliance Inc. won’t open any new Theranos blood-testing centers beyond the current 41 until Theranos resolves questions about its technology raised by an article in The Wall Street Journal last month, according to a Walgreens official.

That article reported that the proprietary lab instrument developed by Theranos as the anchor of its growth strategy handled just a small fraction of the tests sold to consumers at the end of 2014, according to people familiar with the matter. The article also said some of the startup’s former employees were leery about the machine’s accuracy.

The valuation of Theranos, started by Elizabeth Holmes in 2003 when she was 19 and dropped out of Stanford University, jumped to $9 billion last year.

“T-Rex” was rooted in Mr. Burd’s enthusiasm for health-care innovation, according to the former Safeway executives. They said he managed the partnership directly with Ms. Holmes. Mr. Burd declined to comment, citing a nondisclosure agreement. He retired in May 2013.

The plan called for Safeway to build upscale clinics that would house Theranos’s blood analyzers and provide patients with rapid test results, according to current and former Safeway executives.

The $350 million price tag was equivalent to more than half of Safeway’s net income of $596.5 million in 2012. Safeway had revenue of $44.21 billion. Safeway also invested more than $10 million in Theranos, one former Safeway executive said.

Theranos often drew the same employee’s blood twice, first with blood from a finger prick and then the traditional method of a needle in the arm, according to one former Safeway executive.

The former executive said he worried that Theranos’s finger-prick process was still a work in progress. “If the technology is fully developed, why would you need to do a venipuncture?” this person said, using the term for a traditional blood draw.

One Safeway executive got a frighteningly high result from Theranos on a test to gauge his prostate-specific antigen, according to two former Safeway executives. They said the test suggested that the executive had prostate cancer. Retesting by another lab came back normal.

Theranos also backed away from putting its blood analyzers in Safeway’s clinics so patients could get the results quickly, the current and former executives said.

Instead, Theranos said blood samples collected at Safeway would have to be shipped to a central lab for analysis, according to the former executives.

By early 2013, some stores in California had hired phlebotomists, or the technicians who specialize in drawing blood, according to the current and former Safeway executives.

But Theranos kept delaying the rollout of its blood-testing services, those people said.

Mr. Burd retired the next month. After that, Theranos’s Ms. Holmes stopped interacting with Safeway executives and delegated the handling of the relationship to Theranos’s president and chief operating officer, Sunny Balwani, according to the former Safeway executives.

T-rex? Are these people out of their fucking minds? One must wonder if these fat hogged male executives were simply smitten by the young Miss Holmes, a woman with no medical credentials, claiming to have revolutionaized the process of testing blood.

Actually, the person who claimed to revolutionize it, who worked for her, committed suicide a few years back. But I guess that’s not really relevant information.

Good luck to the VCs who got into Theranos in the last round!

I know most of you will dismiss the fact that Jim bought some TST stock, thinking he’s emotionally attached to it. Truth is, this is a bold statement by Jim, buying the stock of his horrendously mismanaged website.

Being intimately familiar with the business of operating a website and subscription services, I can tell you TST is nothing short of a goldmine.

Revenues aren’t growing at TST, according to recent reports. Subscription revenues, which make up 80% of revenues, have been flat. Media revenues, which is basically ads, were flat as well.

Nevertheless, Jim is buying the stock. Why?

As you can see by the income statement, there is nothing awe inspiring here. It’s your run of the mill, boring grind lower to an eventual watery grave.

Why the fuck is SG&A so high? This company has shitty margins and that should/could be fixed.

Revenues appear to be higher; but they’re not. It’s due to an acquisition of a company called MDL. What does MDL do? Who gives a shit? They aren’t growing. Why is TST buying companies that aren’t growing? This is absurd.

Why is TheStreet.com a goldmine? Traffic. It’s a top 1,000 site in the country, valued at just $54 million. Shit, Wall Street values TST at a little more than 1x sales and BusinessInsider just sold for 9x sales. If I were in charge over there, I’d fucking cull the dead weight. Just because someone is getting traffic and drawing in revenues, that’s not good enough to keep him/her. If revenues aren’t growing, and the talent isn’t hustling on social media to draw in subs, they should be fired. Cramer should use his celebrity status to draw in real talent, younger talent, who can bring excitement to TheStreet again.

Hate it or love it, TheStreet.com is an icon in financial journalism and it’s shameful that its share price is under 2 bucks, after 6 years in a bull market.

As stated by their income statement, ad revenue isn’t the problem here, it’s subscription services. My guess: TST has thwarted any and all opportunities to properly manage their social media channels, draw in new eyeballs, and redeuce turnover, thanks to the low quality of their talent.

Although much of their traffic is superfluous, I’d kill for an Alexa ranking like this.

Look at the website design for TheStreet.com. If you had a store and 80% of your sales derived from the sale of tires, would you flood your store with wrenches and hide the tires? That might not be the best analogy in the world; but what TST is doing by flooding their front page with a bunch of shit, is catering to ad revenues and trying to maximize page views, while minimizing the importance of subscription revenues.

More than that, the page is too cluttered, confusing, and it has no energy. I know they have a very good biotech guy over there, who kills it. But, aside from him, they have a bunch of ham and eggers on there, like Doug Kass and Helen Meisler.

No offense intended to any of them. But the methods and model TST has followed, almost with a religious lunatic fervor, isn’t working. Why not try something new?

TST has over 200,000 followers on Twitter, which is great. But there’s hardly any engagement, if at all, on Twitter. With all of those followers, you mean to tell me you couldn’t get 1 person to RT or fav an article? Either those followers are bought, or their content is 100% shit. People do not care.

Lastly, I want to bring up StockTwits and how TST is failing miserably there. Howard Lindzon built a great commnunity there, one that has lots of growth, energy and is a significant source of referral traffic for iBankCoin.

Cramer hasn’t posted anything on StockTwits since 2012. And, to boot, I have more followers than him there, which is ridiculous, considering his foot print.

How do I have twice is followers?

And look at this shit. TST floods StockTwits with links and don’t even bother to have them titled. If you saw these links, would you click on them? With the amount of overhead at TheStreet.com, you’d think they’d dedicate a few responsible people to manage their social media platforms.

The root problems at TST runs very, very deep. They’re dependent upon aging gurus to keep the company afloat. Any idea how many Exodus subscriptions I could sell if afforded the footprint and traffic of TST?

A fuckload.