Citi Analyst Who Called For ‘Death Spiral’ Turns Bullish, Says His Bearshitting Note Was a ‘Cry For Help’

The fuck out of here with this shit. Johnathon Stubbs called for a fucking death spiral, led by an oilmadggedeon back in February. But now, his glum views have been reformed, he’s turned bullish, and subsequently is lying his ass off on national teevee about the reasons why he’s found religion in the House of Citi.

Unlike this Stubbs character, I very much am still calling for an end of times scenario to play out. I will preside over the death of equities, as the oil market descends into sheer, fucking, anarchy.

Stubbs says his bearish call in February was merely a ‘cry for help’ and how the ‘rebalancing’ in crude is the reason why prices have shot higher.

WRONG.

Oil hasn’t rebalanced anything. A cursory google search will teach Stubbs that production is at RECORD highs and how our oil conglomerates are still producing crude at RECORD rates. Nothing has changed but the price of tea in China.

Lastly, his bear(d) game is weak.

To give the false illusion of economic prosperity, the Fed heads menace markets with interest rate hike promises. If you’re willing to debate me about the merits of the US economy, look no further than the value of homes less than 1 million since 2009. Zero growth there; but a fuckload of growth in homes worth more.

All of a sudden, BREXIT is a non-starter. The economy has recovered from that harrowing May jobs report and all is well.

“Considering the economic projections, I anticipate that it may be appropriate for up to two additional rate hikes this year,” said Harker, who does not vote on policy this year.

“Brexit is low on my list of risks, and I do not anticipate more than a transitory couple of 10ths of a percentage point slowdown in growth,” he added in prepared remarks.

Rest assured, just before the Fed is expected to hike rates, almost out of the blue, something will happen to derail it from happening.

Hilarious stuff out of the world’s most hated company. In an effort to remain independent and keep their top secret chimera science experiments under wraps, the Monsanto corporation is scrambling to get Bayer off their jock-strap. Instead of being acquired by Bayer for $122, Monsanto is telling its shareholders to fuck off and is considering merging with Bayer’s Frankenstonian agro-business.

The U.S. company is exploring various transactions, including the potential acquisition of BASF’s agriculture-solutions unit, the people said, asking not to be identified as the discussions are private. In return, Ludwigshafen, Germany-based BASF would likely receive newly issued shares in Monsanto, the people said. The discussions are at an early stage, and no final decisions have been made, they said. Talks with Bayer are continuing, they said.

Monsanto’s board is split over the merit of potential deals with rivals BASF and Bayer, one of the people said, with some executives keen to remain independent and others preferring a takeover. The company in May rejected a $122-a-share offer from Bayer, saying it was too low. It said in its earnings statement last month that it has been in discussions over the last several weeks with Bayer, as well as with other parties, about “alternative strategic options.”

Monsanto would likely face pressure from its shareholders if it opted to buy BASF’s division and issues shares to pay for it instead of accepting Bayer’s all-cash premium offer, one of the people said.

Monsanto doesn’t give a shit, as long as they’re permitted to continue to sue farmers and kick them off their lands for profiting from seeds that drifting into their fields by miracle or wind.

Color me skeptical. I hope Nigel enjoys his fucking fishing trips.

When oil went bust, I honed in on the debt/equity levels of the energy sector, knowing that it would be their sole source of capital once credit markets seized up. Lo and behold, this trend is beginning to take shape, especially as the 2017 debt wall looms.

Here are some opinions on the topic, which is being echoed through Wall Street now.

“The whole name of the game is trying to survive until oil gets back up to $60 or $70,” said Spencer Cutter, a credit analyst with Bloomberg Intelligence. “That may take a year or two. Nobody knows.”

“It’s all part of the same theme of de-levering,” Subash Chandra, an analyst at Guggenheim Securities LLC in New York, said of the share sales. “Part of that tool-kit is ‘backdoor equity,’ which adds inventory and obscures the dilution by adding something new.”

“Investors are looking at this and saying, ‘I know it’s not great now, but I think it’s going to get better in the future so I’m in,’” Wangler said. “It’s a bet on better days ahead.”

But what if oil prices don’t come roaring back? This idea that we need to hang in there because brighter days are ahead is gambling, 100%. No one can accurately predict where crude will be in a month from now, let along 1-2 years. If you’re investing in heavily burdened energy stocks now, you’re gambling–nothing more or less.

I’ll show you exactly what I’m talking about.

Should crude fail to rally, or God forbid fall from current levels, all of the companies below will find themselves in a credit crunch and will likely need to restructure their debt.

Once this happens, losses will be absorbed. The banks who lent the money will take hits. Hence, the ripple effect will be noteworthy.

Well, it looks like BREXIT will happen after all. Why else would Theresa May drag old Boris out from the dusty furniture and appoint him foreign secretary? I understand she is filling her cabinet with REMAIN folks too. But Boris was the fucking lightning rod, along with the quitter Farage, for this movement. Unlike Farage, who feels like he needs to have his little life back after plunging his nation into disarray, Johnson will try to lead his country via this new role.

Markets seem to agree. The pound is off by 0.82% and bonds are back in vogue again, as investors sashay in and out between risk on and risk off assets. Today is a risk off day, for those of you who are keeping track.

This is, without question, the biggest story of the day–even bigger than D. Gartman liking BAL.

Southern born and charmed in the way of cotton production, Dennis Gartman, is very much elated with the breakout in cotton. Yes, indeed, he’s gone as far as to say it should be purchased upon any and all dips.

It’s mighty generous of Mr. Gartman to offer us such good tidings on an otherwise moribund day.

BAL is one way to play this. It is up 16% year to date.

Obviously.

First, the morons at Sequoia sold out of their 10% stake in VRX. Then news broke that former CEO, M. Pearson, dumped 5 million shares of VRX for $96 million. Lastly, A. Left from Citron Research, the man, myth and legend who started this whole VRX to zero campaign when the stock was north of $200, announced he’s taking on a new short against the stock, comparing it to a sinking ship destined to be broken in half and heading towards a watery grave at the bottom of the ocean floor.

The stock is down 5.3% for the day. No word on what a certain B.A. Ackman is doing with his stake.

WTI is off more than 4% this afternoon, as stocks–genteelly–make their way towards new record highs. I understand many of you are of a bearish quality, always preying upon the sick and the addled, scaring thy neighbors out of his or her stock portfolio. But you should know, as students of the market, up is down and down is up and sometimes $600 billion in distressed energy debt is a good thing. After all, how do you think this country was built? Back in the olde colonial days, no one gave a shit about credit quality. They’d lend money to folks building rail lines and never see it again. Said fellows would be residing up in the very best European manors, enjoying the fruits of the lenders labor.

Markets will spring ahead because markets like to spring. You and I can bellyache all we want about Italian banks being greasy, dirty, and wholly insolvent. But who gives a shit? Grab a bag of cocaine powder and throw it into the faces of anyone trying to fuck with your mood…man.

For the moment, oil and those dastardly biotech stocks are leading the downside, while gold and utilities are erecting higher.

School is in session, fucked faces. If you thought the recent rally was special, you haven’t seen anything yet. According to the Bank of America stock market handbook, after periods of long consolidations, just like the 414 days in between new highs we’ve just enjoyed, markets tend to shatter the glass ceiling to the upside and rip out the jaws from bears.

There were 414 calendar days between the May 2015 high and the recent one, Suttmeier said on CNBC’s “Futures Now.”  The S&P 500 has been churning sideways for much of the last 24 months , without a meaningful breakout. But it’s that lack momentum that has Suttmeier convinced we could be on the brink of the next leg higher.

He explained that since 1929 there have been 24 instances where the market went 300 calendar days or more without making a new 52-week high, and in those times the forward return was much stronger than average.

“The bottom line is when I look at these numbers and if we do follow this signal, 250 days out the average return is about 15.6 percent, the median return is about 14.8 percent and the market is up 91 percent of the time,” he said.

Being the data loving guy that I am, I am forced to accept this porridge without complaint. Any technician will tell you the longer the consolidation the greater the upside breakout. However, maybe we can enjoy a brief end of the world panic again before we mash faces to the upside again?

Just a suggestion.