MANIC MINERD: 15% OF HIGH YIELD FUNDS “COULD BE NEXT”

This guy Scott Minerd is super entrepeneurial, attempting to feast off the bones of his enemies during KRAMPUS season. He posits in this CNBC interview that 15-20% of high yield funds could be the next Third Avenue…like right now.

How wonderful.

Yes, Wall street is behaving like a spoiled brat, ahead of the Fed. I suppose we ought to pack it up until Wednesday and accept any losses from now to then as part of the game.

Oil is hovering at 11 yr lows. Deflation is the fear. So, the Fed is hiking rates?

Yes, you heard that right. The unexplainable is going to happen; but what can we do?

Everyone is transfixed on crude, junk bonds and shares of Apple, diving lower. But what about investment grade credit? Remember, I told you there is upwards of $250 billion in distressed basic resource debt. But behind that in higher quality debt is a much larger amount: $1.8 trillion.

Look now, because the LQD is showing signs of wear.

Plunging commodity prices, galloping higher dollar, horrible retail sales, disadvantage exporters, a blind Fed equals KRAMPUS.

I’ve been following the bond king very closely and I find that he looks like the gent who played Hannibal Lecter from the teevee, Mads Mikkelsen. A few days from the first Fed hike in a decade, Hannibal Gundlach is beginning to sound a bit crazy.

I’d have to believe that if they met today that they wouldn’t raise rates,” Gundlach told Reuters in a telephone interview. “I mean, Wow. Look at the chart of JNK (The SPDR® Barclays High Yield Bond ETF). It’s accelerating to the downside.”
Thursday, Martin Whitman’s Third Avenue Management said it was barring investor withdrawals while it liquidated its high-yield bond fund, an unusual move that highlights the dangers of loading up on risky assets that are hard to trade even in good times.
“There’s never just one cockroach” in any kind of credit meltdown, said Gundlach, who oversees $80 billion at the Los Angeles-based DoubleLine Capital. Investors have been on “credit overload,” in a reach for yield, Gundlach said. “People are too long credit and the credit is melting down and the stock market is whistling through the graveyard. It is so similar to 2007, it’s scary.”
The junk-bond fund blowup comes ahead of next week’s Federal Reserve’s Open Market Committee meeting on December 15 and 16, at which time policy makers are expected to raise rates from near-zero levels for the first time in nearly a decade.
Gundlach, who has been warning that the U.S. Federal Reserve should not tighten monetary policy next week, said: “They’re just hell-bent on raising rates. They talked that they would do it and they want to do it — and yet nominal GDP is lower than it was in September of 2012.”
“Yet they did QE3 in September 2012,” Gundlach said.
Gundlach said investors should note that the PCE deflator is currently lower than it was in September of 2012; junk bonds are massively weaker, as are emerging Markets and the CRB index.
“How is it that QE3 was necessary with all of those indicators substantially stronger than they are today and yet we are going to raise rates now ‘because we promised’.”

He makes excellent points. But he’s making one fatal error, when trying to understand this Fed: it’s Bernanke less. He was an American hero, a monetary legend. Yellen is a grandmother with a string of pearls to attend to. Ben used to keep the asshole from Kansas in check, slap fire out of his mouth when he needed to. Yellen is permitting the hawks to rule the roost–because she’s old, weak, and feeble minded.

Ergo, this Fed will raise rates into year over year earnings decline, the first time since 1967, pushing us over the ledge into recession.

Ok, you keep reading me rant about how insane it is for the Fed to tighten into this muck. Finally, I present to you, the Krampus loving folks of iBankCoin, hard data suggesting that Fed chair Janet Yellen is not only incompetent, but in fact, clinically insane.

Over the past 70 years, the S&P 500’s price-earnings ratios shrank during the first year in 10 out of the 12 Fed tightening cycles, falling an average 15 percent, according to data compiled by Bloomberg, Ned Davis Research and S&P Dow Jones Indices.

When P/E multiples are under threat, it helps if earnings are rising — but that’s not the case now. Profits from S&P 500 companies are mired in the worst decline since the global financial crisis as a strengthening dollar and plunging oil wreak havoc on sales for companies from Exxon Mobil Corp. to Procter & Gamble Co.

Analysts predict a 0.6 percent decrease this year, marking the first time since 1967 that the start of a Fed tightening coincides with a drop in corporate profits. Such a thing has happened only three times since the World War II. In two, stocks held on to modest gains as earnings growth accelerated following the initial rate hikes in September 1958 and November 1967. During the cycle that began in April 1946, equities fell into a bear market despite a profit rebound.

In other words, the Fed is playing with fire, whilst juggling a mason jar brimming with nitroglycerine.

Can the market go up next year?

Anything is possible. However, odds are Fed tightening will cap off this bull market and send us into recession. Consider the fact that the dollar strength is only going to get worse for exporters and the bulk of the damage has yet to be seen in the oil and gas space.

2016 is setting up to be a very colorful year indeed. Get your FAZ mobile driving suits ready.

If a rep did this, year in and year out, regulators would feast on his carcass, punt him so fucking far out of the industry, his head would resemble a football. But for the players at Direxion, Proshares, and Velocity, they get permission to create more destructive products, directly and specifically designed, as if in hell itself, to make people lose money.

THEY DESIGN PRODUCTS THAT LOSE PEOPLE MONEY.

Without further adieu, here are the capital destructors of 2015.

GASL -96.7%
UWTI -91.55%
UGAZ -91%
BOIL -77%
UCO -75%
NUGT -74%
JNUG -73%
TVIX -67%
UVXY -67%
RUSS -63%
ERX -61%
YINN -56%

Asian markets are in rout mode. Santa Claus has been shot in the chest three times. Christmas has been canceled. Krampus is coming this Xmas.

The fuckheaded NIKKEI is off by 600 now

If you want positivity, you’ve come to the wrong place. Everything is going to hell in a handbasket. Assholes believe the market had a ‘solid year’ in 2015, as non-systematic risk plagued, then harangued, then plagued retail investors to no end. Professionals were equally routed amidst a sea of complete bullshit, stemming from oil and gas blow ups to biotech hand-grenades to high yield hijinx.

There was nothing redeemable about 2015 and things are about to get exponentially worse in 2016, as the Fed fixes to RAISE RATES into this meltdown. To be honest with you, I am entirely besides myself by recent rhetoric and find myself to be looking at all of this from way up above, through a fog of miscommunication–trying to wade through the propaganda.

SAVE YOURSELVES. Rip open those Xmas presents. Return them to the stores. Save the money for a rainy day, for it is about to come down in sheets.

Unless of course we extend “renewable fuel” tax credits, as part of the new $16.5 trillion scam on the world’s economies, bilking everyone for the sake of a 2 degree shift in global temperatures.

To make matters exponentionally worse, this deal, which by the way is 1 year too late, hinges on the republicans agreeing to a fucking child tax credit.

Congress is considering lifting the export ban as part of either a package to extend expiring tax provisions or to finance the government through Sept. 30 before current funding authority expires Dec. 16. Among the items being discussed are a 9 percent manufacturing tax credit for refiners and an extension of the U.S. Land Water Conservation Fund, according to at least three lobbyists close to the negotiations.

Even if such a deal is struck by Republicans and Democrats in the Senate, House Democrats, who are vital to reaching an agreement, have suggested they won’t go along unless a provision for indexing the Child Tax Credit, which allows taxpayers to reduce federal income taxes for each qualifying child, is added to the mix. And it’s unclear whether House Republicans will support a deal if they assess that the price Democrats are seeking is too high.

On one hand, this is the most significant change in domestic energy policy in two generations. On the other, it’s a comical mess, as crude plunges to new lows amidst a glut of crude emanating from the jihadist fields in Saudi Arabia. Even more, the major energy policy shift comes at a time when record amounts of wells and oil and gas jobs are being cut, companies on the verge of bankruptcy. It’s equal to permitting a trader to have unfettered margin after his account blew up and went to zero.

With oil at $36, pray tell, where the fuck are we exporting this oil to?

The fuck out the way, bitch ass Turkish fishing boat, said the Commander of the Russian destroyer, dubbed Smetlivy.

Russia’s Smetlivy destroyer, which was anchored, issued visual warnings and tried without success to reach the Turkish ship by radio when it came within 1,000 meters, the Defense Ministry in Moscow said Sunday in a statement. When the vessel didn’t respond and closed to within 600 meters, the Russian warship fired, prompting the Turkish boat to change course, the ministry said.

Ahmet Hakam Gunes, Turkey’s defense attache at the embassy in Moscow, was “urgently” summoned to meet Russian Deputy Defense Minister Anatoly Antonov. Russia said it’s “deeply concerned” over the incident and informed the attache of possible “harmful consequences over reckless actions” by Turkey regarding Russia’s military forces, the Defense Ministry said.

I like how Russia summoned the defense attache right away, knowing full well that jihadi fishing boats are likely infesting the waters, trying desperately to blow themselves up for the sake of jihad and 72 underaged virgins.

This is a very pleasant film, following a tumultuous week in the markets. Most people are unaware of this movie because it was made so long ago. Nevertheless, it’s the only movie that I’m aware of that shows how the collapse will happen and how everyone will be fucked.

It’s widely known that gold bugs masterbate to this movie.

Exodus is spitting out its lowest technical score since 9/28/15, which was the bottom of the summer malaise at $188 on the SPY. Within a few weeks, the market went on a tear, exploding by more than 10% on the NASDAQ during October.  It’s entirely possible that we’re setting up for a similar run in January. Then again, the market is a fucking ‘keg of dynamite‘ and we’re also doomed.

At the end of the day, we’re all doomed. These are the last days, the seminal moments of our lives. We can hem and haw all we want, trade this, that or the other; but the conclusion will be the same: STARK DEATH UPON THE CROSS OF WALL STREET.

Starting 2016, I will be actively pursuing short sales. I am going to keep an active long/short basket inside of Exodus and truly try to profit from the demise of others. I might even take it a step further and create something for you to tap into directly. More on that when I’ve figured out the details.

One thing that I can promise you: the good folks at iBankCoin are dedicated towards the winship of the market and will toil away at achieving said goals. After we toil, we will regroup and toil some more.

Have a spectacular weekend.