Theese will not be margin calls, but Fed calls–meaning they’re due immediately. I suspect many brokers and individual investors will take hits on this. If the broker or client can’t cover the deficit to get back to zero, ultimately, the firm takes the hit.
Making the rounds is one trader asking for donations to cover his hit. Last night, I went over a scenario that I thought might play out today, and it happened. Take a look.
I feel for this guy.
I do recall a situation that I was in, circa 2000, when the dot coms collapsed. My partner and I had a client who went balls to the wall long, just before the crash. His account was heavily margined and his stocks fell so hard, so fast, it went to zero, AND MORE. I was very young and appalled by the sheer ferocity of the market. My partner executed one of the best sales calls I’ve ever heard, convincing the client to send in $250k, just to get back to zero. Otherwise, as dictated by the rules of the game, the hit would be ours to absorb. I had enough fucking problems of my own, than have to deal with that.
As for the unfortunate trader featured above: don’t beat yourself up over this. It was the Black Swan event to end all Black Swans. But know, these things happen from time to time.
Learn from the experience. Pick yourself up; and hopefully, get back in the game a smarter trader.
Help poor Billy out, would you? Where is your pagan holiday spirit? Buy some PAH and VRX and tell your friends to send him some money to manage, so he can average down at this cheap levels.
Ackman’s $14.5 billion Pershing Square Capital Management paid roughly $186 per share for its 21.4 million shares of Valeant. The stock closed at $72.58 on Wednesday. Last year, the hedge fund was one of the industry’s best performers with a 40 percent gain.
It should be noted, Ack-attack netted 40% last year, is worth billions, and owns a $100 million apartment in NYC, totally vacated, just because he felt like buying it.
Having said that, I went in with Billy on this PAH. Thus far, my brains are all over the floor, next to his.
This will be a very, very big deal, the biggest ever. Can you blame them? U.S. tax rates are onerous and our politicians are monumentally idiotic.
If true, this bid puts the shares at a 20-20% premium to yesterday’s closing price.
Pfizer Inc is in talks to acquire Allergan Plc for $370-$380 per share, according to a person familiar with the matter, valuing the potential deal at around $150 billion, the healthcare sector’s biggest.
Judging by the pinless hand grenade action in all china related commodities, dry bulk shipping rates, U.S. industrials who do business in China, for all intents and purposes, China is a major drag on worldwide swag.
In a word, we are swagless because China is filled with dickless, communist, liars.
Morgan Stanley tends to agree.
No economy over the past half century has expanded at 6 percent or more as its labor force shrank, according to Ruchir Sharma, the head of emerging markets for Morgan Stanley Investment Management. China, which must grow at least 6.5 percent a year to meet its goal of doubling 2010 gross domestic product by 2020, is more likely to expand between 4 percent and 5 percent as the country’s working-age population contracts, he said.
“Based on historical evidence, the probability that China can grow at 6 percent or more is essentially zero,” Sharma a long-time bear on Chinese stocks who made the Bloomberg Markets 50 Most Influential list this year, said in a phone interview from New York on Wednesday. He cited his own study of the growth path of 200 countries over the last 50 years and said it’s one reason he’s pessimistic on Chinese equities.
The Chinese need to get the dicks out of their ears, Jack Ma out of their wallets, and put some boots on the ground in Syria, start a war or “conflagration” somewhere like the US of A.
I am fairly certain China circles down the toilet bowl for good in 2016.
I like how our Fed is pairing recession with interest rate hikes. It’s like pairing a 1st growth Bordeaux with a bag of lemon heads or box of crackerjacks.
“It wouldn’t surprise me if we had one in 2017,” James said Wednesday at Bank of America Corp.’s banking and financial services conference in New York. “I’m turning more pessimistic now. There are a lot of headwinds facing us right now.”
James, who leads New York-based Blackstone with Chief Executive Officer Steve Schwarzman, said most of the industrial sector, excluding aerospace and automotive companies, is already in recession, and he expects no growth in earnings in the Standard & Poor’s 500 index of large U.S. companies this year. He also cited factors such as financial strain on consumers, while saying wage growth is one positive sign.
It looks like a lot of smart money out there thinks we’re completely and entirely fucked. Everything is shit. James also believes China is growing at less than 5%, far less than what those devils report. Being a manager of $334 billion in private equity assets, James has a vested interest in throwing shade at markets and valuations, since him and his vultures are waiting in the wings to pounce and acquire.
Truth be told, you can never trust what these people say, as their very nature is to be duplicitous, sinful and without morality.
This is the worst short squeeze I’ve ever seen. Reason being: just Friday the company declared they were done, through, kaput.
Nov 13 (Reuters) – Drug developer KaloBios Pharmaceuticals Inc said it would wind down its operations and that it had engaged restructuring firm Brenner Group to help liquidate its assets.
The company said it was highly unlikely that exploring strategic options could generate a viable transaction within the time frame, given its limited cash resources.
Apparently, the Friday the 13th massacre was only delayed for shorts, which represent at least 10% of the outstanding shares.
I want you to put this story into real life perspective.
Imagine yourself to be a reasonably smart man, fairly liquid in the market. You see the KBIO news on Friday and you’re pleased because you’ve been short from the time the FDA said to “fuck off”, when the stock gapped down from $14 to $4, earlier this year. You were victorious and you celebrated this immense victory with your wife, over steaks, shrimp and champagne cocktails.
Monday swings around and the stock is percolating a bit. You chalk it up to wild eyed speculation, which normally accompanies companies that go bust. You had 10,000 shares short at $4, and decided to double that position to 20,000 shares, selling short MOAR at $2–giving you an average cost of $3.
After the market closed today, you felt confident that your $60,000 short position would pan out. The stock had been lower by 2.76% in an otherwise rip-roaring tape. After all, the company said they were done and that it was “highly unlikely” any strategic options would materialize, other than liquidation.
Then you get a news alert that Martin Shkreli bought 1.2 million shares, most likely due to his desire to reverse merger his company, Turing Pharmaceuticals, into KBIO’s lifeless shell. The internet buzz was enormous and the stock fucking took off. It leapt from $2 to $10, then $15, then $20. Your $60,000 position and $20,000 unrealized gain has morphed into an astounding $340,000 loss. Your entire account was only worth $250k, money that you had saved up over the years, set aside for retirement.
It’s all gone. All of it.
Tomorrow morning you stand at the mercy of the market. Ever point is an additional $20,000 loss. Your broker will liquidate all of your holdings to cover the losses, unless you’re able to wire in $90,000 to get back to zero and whatever funds necessary to hold your other positions. If they’re 50% marginable, you will need to wire in $215,000 before 10am.
Now if animal spirits jack KBIO to $25 or $30, the dynamics of your loss change, drastically. Total losses can quickly escalate into the $500k area–all because of one little man buying into an already defunct biotech company.
Fuckery at its finest. I feel for anyone who is short KBIO. You shouldn’t have to deal with this sort of curveball. But the market is cruel and unforgiving and mean-spirited.
This is fuckery largess. This is madness. This is lunacy. This is biotech listed on the NASDAQS.
Asshole CEO of Turing Pharma, the same loser who proudly boasted about jacking prices higher for his bullshit drug, which was the initial cause for the biotech rout, announced that he purchased a shitload of KBIO, about 40% of the company.
KBIO had announced they were winding down operations and the stock was 24 cents as of yesterday. Right now the stock is about $15.
The speculation is Marty will reverse merger his piece of shit company into KBIO. This, of course, means that another bullshit biotech company will be publicly traded, available for short sellers to drive into the dirt.
But, in the meantime, rabid dogs are bidding up KBIO in the after hours, as if KBIO had a cure for cancer in its vaults.
According to the above filing, Marty bought about 1.2 mill shares for around $1.6 mill, putting his cost basis about $1.32–for a paper profit of approximately $16.5 mill.
What a decadent day. Almost 100 NASDAQS were added to the National Treasury. For some reason, today investors were accepting of a Fed hike in December. They’ve come to grips with the notion that the end of western finance, as we know it, may not be beckoning.
Stocks are dirt cheap on a price/sales basis, the cheapest in several sectors in over a decade.
LISTEN TO ME: I trust this tape, like I trust the airbags in my car from stranger danger. I’m not depending on miracles to help me. Like I said earlier, this is an oversold bounce. The rubber band was stretched back real far, causing the spear to shoot forward and sever the heads of Mr. Short Sellers–fucktards extraordinaire soiling my comments section with end of days rhetoric.
There is nothing that I like more than a short squeeze, offering these scoundrels up to the lord, sacrificial lambs on my dinner plate. I consume you (extra cannibal) because I am alpha to your beta. Run away and tell your wives how hard the market was today.
“The Fly” banked coin, up 2.3% for the session– despite SHAK being a total drag.
NOTE: I am taking on 5 new bloggers next week. If you have an interest in joining the Peanut Gallery ranks, email me at Flybroker @ gmail.com. Be sure to add your Twitter handle, so that I can review your skills.
The leadership sectors are in the most beaten down stocks, aluminum names, commodities destined for zero but first bouncing off the concrete for fun. If this were a serious rally, financials would be leading, since higher rates helps them most.
On Friday, Exodus flagged oversold. I felt so comfident about that signal, I had a video done in its honor.
Then, due to the novelty of the whole video making business, I made another one.
Which one do you like better?
In case you’re wondering, I’m doing well today. Nothing terrific, but well enough to justify punching one or two homeless men before heading to dinner.
Their willingness to destroy the U.S. economy is impressive. A plus for persaverance.
“Members emphasized that this change was intended to convey the sense that, while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting,” said minutes of the FOMC’s Oct. 27-28 meeting, released Wednesday in Washington.
A majority of Fed officials have signaled they expect to raise interest rates this year for the first time since 2006. That message was underscored when policy makers inserted a reference to the “next meeting” on Dec. 15-16 in their October statement, in connection with their assessment on when to act.
A “couple” of voting policy makers had qualms that the wording change “could be misinterpreted as signaling too strongly the expectation” for December liftoff, according to the report.
Participants in the meeting “generally agreed,” the minutes said, “that it would probably be appropriate to remove policy accommodation gradually.”
“It was noted that the beginning of the normalization process relatively soon would make it more likely that the policy trajectory after liftoff could be shallow,” the minutes said.
The market is responding positively to the minutes. Hell, if space aliens destroyed Moscow today, stocks would continue higher on hopes that a new Moscow would bolster worldwide growth. It’s just one of this runaway train type of days.
