Bless the Turkey Gods; Long Live Le Fly

I am thankful for being born into this ravenous society, obstacles placed in front of my path. Difficulty levels are orders of magnitude greater now– than ever before.

As a trader and student of the market, I am thankful for all other investors who came before me, imparting their experiences, through the written word, for the benefit of future generations. Right now, I am thankful for Henry Clews’, 28 Years in Wall Street.

It’s fairly obvious to me that making the decision to become a stocked broker was probably the worst decision I ever made. Nevertheless, it has afforded me an existence and this god forsaken stock market, for better of for worse, has provided me with a venue to discuss my thoughts online–building a foundation for what will one day be revered as the single best finance site that was ever created: iBankCoin. I’m a five tool player, son. Get out of my way.

I am thankful for the Tontine Coffee House, NYC, where this NYSE thing all started. The Buttonwood Agreement and that damned tree too: I am thankful. A shout out to the players at the Gallagher’s Evening Exchange. I am thankful for you.

To J.M. Walker: you sold too soon. I am thankful for your mistakes.

Even the losers, I am thankful for you, especially old man Daniel Drew, James C. Flood and Wm. C. Ralston. I’ve learned from your mistakes, more than you probably thought was possible.

At any rate, The Turkey Gods are here. Don’t fight the wave of gravy that is about to crash on you. Embrace it and become the gravy. I’ll see you fuckers on Friday.

I have little doubt that the vermin in Turkey plotted and schemed, in their little Turkish bath ways, to shoot down a Russian bomber.

Why?

Because the Syrian Turkmen were being bombed out into obliteration.

The attack appeared to be “an ambush” and “looks very much like a planned provocation,” Foreign Minister Sergei Lavrov told reporters Wednesday in Moscow, suggesting Turkey was defending Syrian anti-government fighters based in nearby areas. “We can’t leave what happened without a response.”

Then there’s this.

A Russian pilot rescued by special forces backed up the assertion that no warnings were given, “not by radio, not visually,” according to comments to state media.

“If they’d wanted to warn us, they could have shown themselves, taking a parallel course,” the pilot said. “But there was nothing. And the rocket hit the tail of our plane suddenly. We didn’t even get a visual of it in time to take evasive action.”

Bottom line: As much shit as we talk about Russia, in no way are they a declared enemy. Turkey should have warned them, or escort the Russian jet out of their airspace. No, not the fucking Turks. The Turks had to shoot the fucking plane down, because they’re Turks and without brains.

BBG view digged deep into the cash strapped (lolz) Pershing Square and how Ackman just took down another 12.5 mill shares of VRX, for just $75 mill.

That’s because he didn’t buy stock: He went to two derivatives dealers, Nomura and UBS, and bought call options on Friday that give him any gains in value of Valeant’s stock above the strike price of $95. He also sold those dealers put options, which put him on the hook for any losses in the value of the stock below the strike price of $60. And he sold other call options with a strike price of $165, capping his upside: If the stock gets above $165, he gives up any further gains. Then he did the same thing again on Monday, only with strike prices of $100, $70 and $130. The options he bought cost about $235 million, plus about $9 million of hedging costs; the options he sold brought in about $169 million. Here’s the accounting:

The result of all of this is a set of payoffs that look, locally, a bit like buying stock; if the stock ends up above $95 but below $165, Ackman has more or less done the equivalent of buying $1.1 billion worth of stock, though with a bit of friction. Further away from today’s price, though, it looks different: If the stock ends up below $95 — and, again, it’s below there now — Ackman avoids some losses, though if Valeant really craters he’s on the hook. And if Valeant ends up back where it was when Ackman was first buying — that is, near $200 — then he misses out on some of the gains.

Ackman is either the most stubborn man on the face of the planet. Or, he is 100% sure, due to thorough investigation, that Bronte Capital and Citron Research are merely feces tossers, men yelling fire in a room filled with pyrophobics.

I am long VRX.

The Stocktwits and Twitter KBIO message boards are on fire again, as KBIO spring boards back into euphoria, ahead of the CEOs interview with Bloomberg at 1pm.

Ok, that’s it. There isn’t any medical news forthcoming or some ground breaking devlopments or ventures about to take place. No. The only reason why the stock is higher is because its oddball CEO is going on the teevee at 1pm.

Oh, and there’s still a bunch of “the next KBIOs” going on over there, pointing to share prices action in GENE, AEZS and MCUR as hard evidence.

Fucking morons. You’re all gonna blow yourselves up.

Can you people quit being so miserable, if only for the next few days? I might have to do a post on how to properly conduct yourselves during the holiday season. There’s too much vitriolic hatred around here. Take lessons from “the dude” and unwind, man.

The next two trading days are layups. The day before and after Thanksgiving are usually strong. However, don’t expect the same grace next week. I do recall plenty of ‘cyber mondays’ gone astray. There is a solid chance we rally into year end, only because retail stocks are already appreciably lower this year. But don’t count on it.

The best trade here is to be very long now, then lighten up on Friday. It might sound short sighted and without balls; but 2015 has been a year marked with penis chopping expeditions and really bad karma…man.

Fuck 2015 and fuck my 16% gains. I hated this year and I will not get all giddy and shit, just because I’m within 24 hours of stuffing my face with protein.

Smile. National Festival is upon you (extra bipolar).

This one is slightly less amusing, only because I’m actually long VRX now. Nonetheless, the comedy I am entreated to, as VRX dives lower, much to Bill Ackman’s chagrin, due to some connect the dots whodunnit gambit–by some blogspot addressed website– is very fulfilling for me.

I enjoyed this one quite a bit.

Apparently, VRX has other pharamcies named after chess moves and Stephem King references.

I would like to get to the bottom of this. I am sure VRX has a solid explanation.

Uh, he mentioned the “f” word. Now everyone, like good little lemmings, pile into the short trade.

FML

Negative yields are persisting in Europe, with German 2yr now -0.41%. We’re seeing negative yields in most developed european nations, with Spainish and Italian yields lower than ours.

What gives?

European QE has crushed the euro and helped ease the credit crisis that was unfolding, rapidly, back in 2011. Heading into December, both the ECB and Federal Reserve are looking to make a move. The only difference is we’re looking to do the exact opposite of one another.

Speculation of further stimulus from the ECB has mounted ever since President Mario Draghi indicated in October that the Governing Council would act if needed to drive up inflation to its 2 percent target, a view echoed by several policymakers.
The ECB will next decide policy on Dec. 3, less than two weeks before a Federal Reserve meeting in which the U.S. central bank is widely expected to raise rates from zero for the first time in nearly a decade.

The likely outcome of both meetings has already been priced in by financial markets, which is why the euro has weakened over six percent against the U.S. dollar since Draghi’s comments last month.

Inflation, meanwhile, rose to 0.1 percent last month and a core measure is showing signs of strengthening over the past few months.

Still, a poll of over 50 economists taken this week showed forecasters predict an 80 percent probability of the ECB announcing further easing next Thursday – roughly the same result as the previous two polls.

“It (the ECB) cannot run the risk of disappointing markets, having raised expectations of action. Action in some form or other looks like a racing certainty; it’s merely a question of the form it takes,” said Ken Wattret at BNP Paribas in London.

How can the Fed look to tighten at a time when the ECB is set to ease further? Clearly, they’re both looking into the same deflationary vortex, one that is exacerbated by a strong dollar. It’s not like the US has some special kind of growth here, or inflationary pressures are simply too much to bear.

No.

This is sheer fuckery, largess. The only logical explanation for all this leads to an illogical conclusion: The Fed wants to expedite the crash in commodity related stocks and clear the market of weak balance sheets.

Morgan Stanely is out with a report, highlighting income inequality in developed nations. The frenched fried eat scoundrels of Portugal took the 1st place trophy, followed by a series of southern european knaves. Juat behind Spain was the good old US of A, fucking people hard since Reagan left office.

“Past generations of middle-class families, emerging from the post-WWII period, could aspire to improving living standards, with a reasonably sized house, a good education for their children” and dependable pensions, Morgan Stanley economists said in their report Tuesday. “In contrast, middle-class aspirations are now running up against the wall of job and retirement insecurity.”

At least the stock market is within an ear shot of all time highs, no?

The Federal Reserve has $29 billion in surplus reserves. The drug addled degenerates in Congress, instead of doing their job and balancing a budget, have their eyes fixed on the Fed’s money–like the greedy little bank robbers they are.

Lawmakers are trying to pass a $325 billion highway bill to fix America’s crumbling roads and bridges. And Congress wants part of the funds to come from the Fed’s emergency stash of money.

In fact, Congress wants to take the $29 billion from the Fed and close the account for good too.

The Fed created this “surplus account,” shortly after it began operating in 1914. The idea was that it would serve as a cushion to absorb any potential losses the Fed incurs.

However, many members of Congress believe that the Fed doesn’t need the money any more and should be put to better use.
“It is appropriate to liquidate [the Fed’s surplus] account to meet today’s realities,” Randy Neugebauer, a Republican Congressman from Texas, told the House earlier in November.

The House agreed, and overwhelmingly voted to include the Fed’s billions in the highway bill.

The Fed doesn’t want to look like Congress’ bank account.

“To the extent that they’re seen as a piggy bank, threatens them,” says David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

And last week, two Republicans proposed a bill that would require the Fed to operate its monetary policy based on a defined rule — something the Fed believes would hamper its ability to act during times of crises.

Fed officials say all of these actions, including Congress reaching into its piggy bank, jeopardizes the Fed’s independence from politics.

“Using a central bank as a source of revenue to cover the cost of a fiscal program is dangerous to its independence,” Fed Vice Chair Stanley Fischer said earlier in November.

So, let’s set the record straight. Our elected officials have all but ruined this countries balance sheet, amassing almost $20 trillion in debt and that number is growing daily. Now that they’ve exhausted all sources of capital, through fucked up tax hikes and surcharges on everything but soup cans, they want to dip their beaks into the Fed’s pot, like mafiosa.

Times are changing, lads. The dichotomy between a bankrupt and corrupt Federal government, coupled with rich corporate and Federal Reserve balance sheets is leading us to a point where the people with the guns, ultimately, take what they want–just like any decent banana republic worth its salt.

I do this every late year, and without fail, there are always monster turn arounds the following year in the mega-cap space. Large asset managers need mega-caps to thrive and will pile into these things at the first sign of strength.

The following stocks are the worst performing mega-cap stocks of 2015, as defined by market caps in excess of $50 billion.

Which one do you think will have a great 2016?