Faber: We’re Already in Recession

The gloom and doom man from the gutters of the transsexual districts in Thailand is throwing mad shade at Fed chief, grandmother Yellen, suggesting we’re already in recession, equity prices are fucking doomed, and the world as we know it is about to end.

“Ten-year U.S. Treasuries are quite attractive because of my outlook for a weakening economy,” Faber, the publisher of the Gloom, Boom & Doom Report, said in an interview with Bloomberg on Monday. “I believe that we’re already entering a recession in the United States” and U.S. stocks will fall in 2016, he said.

Bear in mind, Marc Faber has been saying this ever since the day he started to speak Dutch, or whatever the fuck his native tongue is.

Carl isn’t fucking around. I’m sure the lads over at PBY are throwing tires around the office, at the specter of Carl taking control of the company. They’d much rather prefer to wed with the grease monkies at Bridgestone.

Carl just upped the ante, offering $18.50 for PBY, $1.50 more than Bridgestone’s all cash offer.

On December 28, 2015, Icahn Enterprises delivered to the Issuer a proposal to acquire all of the outstanding Shares for $18.50 per Share in cash in a negotiated transaction that would not be subject to any due diligence, financing or antitrust conditions. In the Proposal, Icahn Enterprises stated that, as one of the Issuer’s largest shareholders, Icahn Enterprises believes it is contrary to the best interests of all of the Issuer’s shareholders for the Issuer to agree to any increase of the termination fee payable to Bridgestone Retail Operations, LLC (“Bridgestone”) pursuant to the Agreement and Plan of Merger, dated as of October 26, 2015, by and among the Issuer, Bridgestone and TAJ Acquisition Co. (as amended through December 24, 2015, the “Bridgestone Agreement”), because it would prevent a truly robust auction. Icahn Enterprises also indicated in the Proposal that it could be willing to bid in excess of $18.50 per Share for the Issuer. However, Icahn Enterprises also stated in the Proposal that it does not intend to bid any higher than $18.50 per Share if the Issuer agrees to any increase of Bridgestone’s termination fee.”

Carl said he would top any offer Bridgestone would make. I guess the muffler faces at PBY should’ve taken him seriously.

This is the looniest shit I’ve ever seen. The stock price was doing just fine, until the CEO decided it was a good idea to walk the dog without a hat and sweater. As a result, he caught pneumonia and is now idled in a hospital receiving bronchial treatment.

Valeant and Pearson have come under pressure for steep price increases on some of its drugs and for close ties to a specialty pharmacy that used aggressive methods to overcome insurer barriers to reimbursing its medicines.

Pearson was hospitalized with the lung condition on Friday. A company spokeswoman declined on Monday to say whether he had experienced any complications or when he might return, adding it was honoring a family request for privacy.

“It is an inopportune time for their leader to take sick leave after the company has faced credibility issues in recent months,” said Morningstar analyst Damien Conover. “If the company was on solid footing, it wouldn’t be as much of an issue.”

Valeant said its board has created an “office of the Chief Executive Officer,” which will include General Counsel Robert Chai-Onn, Group Chairman Ari Kellen, and Chief Financial Officer Robert Rosiello.

“It is a little unusual to have that sort of operating structure, a panel” to fill in for an absent drug company CEO, Conover said.

Broadway Bill Ackman must be besides himself with disdain. After enduring a year from hell, long VRX into one short seller report after the next, falling victim to blogspot assault, he has to deal with this shit–the untimely near demise of its CEO. Out of all the things Broadway Bill didn’t want for the pagan holidays, I am sure this was at the top of his DO NOT REQUEST list from Santa.

I’ll hold my shares, hoping the CEO had little to do with the accounting creativity at VRX. God willing, the true author of the artistic accounting talents lies with some back office clerk, who toils away at the balance sheet to ensure the company pleases its fans on Wall Street.

Shares of VRX were off more than 10% today.

Americans go big every time. We don’t fuck around with small defaults or minor recessions. We exacerbate a situation until it renders the entire globe at risk, creating great recessions, not just ordinary ones. When our banks blow up, everyone loses, especially old people in wheeled chairs.

Nowadays, our oil and gas experiments are blowing up in real time, once again leading the globe in failure.

How will this all end?

After the U.S., companies from emerging markets were the second-largest defaulters, accounting for 23 percent of the pool, which is a smaller share than last year, according to S&P data.

Plummeting oil prices and speculation about how the Federal Reserve’s plan to tighten monetary policy would affect corporate borrowing costs has made companies more vulnerable, Vazza wrote.

“The current crop of U.S. speculative-grade issuers appears fragile, and particularly susceptible to any sudden, or unanticipated shock,” she wrote.

It will most assuredly end like our 4th of July fireworks finales, with flair and extreme showmanship.

Seventy two percent of stocks are lower today, with gains found almost exclusively in utilities. Treasuries are moving higher again, as investors bet on the yield curve inverting.

Commodity related stocks are hammered into atoms, plunging 5-10% across the board.

Is this how we are to end 2015? Well good riddance. I’ve been offering second and third chances to this market, giving the benefit of the doubt, for two years now, only to be abused and disappointed in the end. Right now, I am getting poleaxed in my FCX and SN positions, not to mention the utter stupidity that is VRX–dropping because its CEO caught the cold.

Today typifies 2015 perfectly. It embodies everything that’s wrong with the tape, from false starts to the wrong stocks going higher.

If you’re heading into 2016 with a very bullish opinion of this market, you should have your head examined.

Everything goes back from whence is came. Shares of CMRX are trolling the graveyard today after announcing that trials for their main drug wasn’t going too well.

Chimerix Inc said its oral antiviral drug did not significantly reduce a certain kind of infection in stem cell transplant patients in a late-stage study, sending its shares down 72 percent in premarket trading.

Patients taking the drug, brincidofovir, did not experience significant reduction in cytomegalovirus (CMV) infection through week 24 after transplant.

CMV is a member of the herpes virus family and remains a significant cause of viral infections in transplant recipients.

The company said its lead drug failed to achieve the main goal due to cases of graft-versus-host-disease (GVHD), a complication that occurs when transplanted donor cells attack the recipient’s body.

Chimerix said pending the availability of complete data from late-stage trial of the drug, it has paused further enrollment of kidney transplant patients.

Actually, the drug didn’t seem to work at all. Obviously, the stock wasn’t reflecting the inherent risk that shareholders were taking on, gambling on a drug in clinical trials. I’ve always marveled at the biotech industry as being equal to juggling pinless handgrenades, whose contents were sure to blow both of your limbs off at any time.

Unfortunately, for stake holders in CMRX, that day is reckoning is today.

If by good you mean profitable beyond belief for the managers of the venture capital fund, then Union Square is the epitome of what a venture firm should endeavor to emulate. However, if, by chance, you’re on the other side of the ledger, a mere plebeian public investor looking to make enough money to buy a beach’d house, you were royally fucked following Fred and his band of arch-capitalists during 2015.

Before you pass judgement on Fred, just know that he “turned a few million dollars into $1.5 billion” long Twitter, from the beginning. It’s hard to fault someone for having the foresight to invest in an early concept like that, then criticize him when management drops the ball in the public markets. Nevertheless, the facts are the fact. There are 4 publicly traded companies on the USV books, as far as I know.

Here they are with their year to date returns.

TWTR: -36%
LC: -54%
ZNGA +1.8%
ETSY -70%

He made a mint selling ZNGA above $12, and also fleeced Yahoo several times, selling them Tumblr and Flurry to them at absurd prices. His investors couldn’t ask for a better steward for their investable dollars.

Everyone else: beware.

Remember when everyone was so freaked out about the ruble crashing and the Russian central bank used currency reserves to prop it up? There were even reports that people were buying iPhones to use them as currency, in a fucked up barter system.

Well, don’t look now (no do look, really you should), but the ruble is completely in the toilet–hitting new lows, hanging out with its good pal crude oil.

All of the petrol currencies are under pressure. This trade is a very simple one: crude lower/rubles lower- Putin goes to war to boost approval ratings.

Any questions?

As the Saudis commit financial jihad on U.S. oil production, our government sits here idle, complaining about the perplexities of building pipelines and creating tax loopholes for a solar industry that doesn’t stand a chance to displace the fossil fuel hegemony, any time soon.

About $99 billion in face value of high-yield energy bonds are trading at distressed prices, according to Bloomberg Intelligence analyst Spencer Cutter. The BofA Merrill Lynch U.S. High Yield Energy Index has given up almost all of its outperformance since 2001, with the yield reaching its highest level relative to the broader market in at least 10 years.

“You are going to see a pickup in bankruptcy filings, a pickup in distressed asset sales and a pickup in distressed debt exchanges,” said Jeff Jones, managing director at Blackhill Partners, a Dallas-based investment banking firm. “And $35 oil will clearly accelerate the distress.”

“Most companies have gone into shrinkage mode, saying their goal is to stay flat and make it through this market,” Raoul LeBlanc, an analyst with IHS Inc. in Houston, said. “The current price is unsustainable. Unfortunately, we have to sustain it for a while longer.”

Separately, Saudi Arabia, the great devil from the east, has over $630 billion in currency reserves. Although they’ve been running a deficit of $30-45 billion per annum, things are about to get colorful for them in 2016, with deficit estimates ranging from $100 to $200 billion, depending on the price of Brent.

Oil accounts for more than 90% of Saudi Arabia’s income.

This is the funniest shit since Al Gore said he invented the internets.

Elizabeth Holmes, the prodigal child who “invented” a method to test blood using just a pin prick of substance, has come under intense fire these last few months. The gist of the WSJ war against Holmes is that she is full of shit, the actual scientist behind the leading Theranos tech committed suicide, and she’s not being honest with her investors.

In a hit piece out tonight, the WSJ had this to say.

Ever since she launched Theranos in 2003 when she was 19 years old and dropped out of Stanford University, Ms. Holmes has been driven by ambition that is big even by Silicon Valley standards. Instead of a smartphone app to hail a car or order food, she wants to revolutionize health care with a vast range of diagnostic tests run with a few drops of finger-pricked blood.

Now 31, Ms. Holmes has emphasized a variety of strategies—a hand-held device, tests for drugmakers, drugstore clinics—while trying to turn her dream into a business. She often has collided with technological problems, according to interviews with more than 20 former Theranos employees, company emails and complaints filed with federal regulators.

For now, though, Theranos has stopped collecting tiny samples of blood from patients’ fingers for all but one of its tests while it waits for the Food and Drug Administration to review the company’s applications for wider use of the small proprietary vials called “nanotainers.” As a result, Theranos is using traditional lab machines for most of its tests.

By the end of 2004, Ms. Holmes had raised at least $6.9 million, valuing Theranos at about $30 million, according to corporate filings.

The first $1 million came from Tim Draper, a founder of Draper Fisher Jurvetson, through two of his funds. Ms. Holmes was a childhood friend of his daughter and came to him “with extraordinary energy and brilliance,” he says.

The money enabled Ms. Holmes to hire scientists and engineers. She believed the fastest route to getting revenue was by offering Theranos’s blood tests to drug companies for use in clinical trials, former Theranos employees say.

In April 2005, Ms. Holmes said on the public-radio program “BioTech Nation” that she had created a hand-held device that would help drug companies tell in real time how well their drugs worked on patients using “a little tiny needle that pulls a little tiny drop of blood” from an arm or the hand.

Ms. Holmes called it the RDX Metabolic Profiler and said it was “going into the production phase,” according to a recording of the interview. “We hope to release it, actually, to a pharmaceutical partner around mid to late this year.”

In 2010, another fundraising round boosted Theranos’s valuation above $1 billion. By then, the device was code-named Edison, after the famous inventor.

Safeway Inc. and Walgreens agreed to offer Theranos tests in stores. Mr. Nugent says he was surprised by the September 2013 announcement to “bring access to” Theranos’s “lab testing service through Walgreens pharmacies nationwide” because he still considered the Edison an experimental device.

He recalls seeing the machines labeled “for investigational use only.” Their accuracy “was not to the level you’d want.”

Ms. Buchanan responds: “We are 100% confident of the accuracy of our tests when we rolled them out.” She says Mr. Nugent seems to be confusing devices designed “for a non-clinical purpose…with those that are ultimately used in the clinical lab.”

In November 2013, Theranos’s lab in California got an order from a patient at a Walgreens for a blood test handled by the Edison, according to a former Theranos lab worker assigned to run the test.

Before doing the test, the employee put the device through three trial runs with a quality-control sample containing a known amount of the substance the test was supposed to measure.

When the Theranos employee alerted superiors, someone from research and development came to the lab and deleted quality-control data to make the Edison’s test runs look better, the former lab employee alleged in the complaint to the Centers for Medicare and Medicaid Services, or CMS.

The R&D employee then tested the patient’s blood on the Edison and sent the results to the patient, according to a copy of the complaint. An agency spokeswoman declines to comment. CMS auditors inspected Theranos last month as part of a regularly scheduled audit the company says is continuing.

Ms. Buchanan says Theranos doesn’t believe the incident happened. “If there ever were a circumstance like that, we would do a quality-control check on that device and not give out a patient result,” she says.

Last year, investors pumped another $633 million into Theranos, increasing its valuation to about $9 billion and Ms. Holmes’s majority stake to more than half that.

In April 2014, she got a long email from another employee. The employee alleged that Theranos had cherry-picked data when comparing Edison machines to traditional lab machines to make the Edison look more accurate, according to a copy of the email.

For one test, the device’s accuracy rate increased sharply after some information was deleted and manipulated, the employee wrote. Edison machines also allegedly failed daily quality-control checks often.

“I am sorry if this email sounds attacking in any way, I do not intend it to be,” the employee told Ms. Holmes. “I just feel a responsibility to you to tell you what I see so we can work towards solutions.”

Ms. Holmes forwarded the email to Mr. Balwani. He replied to the employee, who no longer works at Theranos, denied all the claims and questioned the employee’s understanding of statistics and lab science.

Quality-control failures were due to the “newness of some of our processes, which we are improving every day,” Mr. Balwani wrote.

He added: “This is product development, this is how startups are built.” The reply ended with an edict that the “only email on this topic I want to see from you going forward is an apology that I’ll pass on to other people.”

Ms. Buchanan says the employee was too inexperienced to “make these types of comments” and “struggled” to grasp Theranos’s scientific processes. The company has disclosed its test methods to regulators, she adds.

Theranos’ valuation, as of last raise, rivals that of Quest Diagnostics, who does $7.5 bill in revenues with profits of over $600 mill per annum.

As for Theranos’ valuation: fucking unicorn.