JC Penney 2017 Bonds Now Yielding 11.39%

JCP debt starts to get scary in 2017, with $285 million due and no way to pay it, according to recent trends. Based on the current burn rate, ALL of JCPs cash will be gone in 2013, which will force them to tap their credit facility. The market will be sure to freak out if that happens. As you can see, the holders of JCP debt are already hitting the exits, with the 2017’s now @11.39%, yield to worst.

As for JCP CDS, they are now above 1,000.

As for the stock: I expect funds like Glenview Capital to liquidate their positions, since they were most likely copy catting Pershing Square anyway and retail doesn’t seem to be central to their funds theme.

The restructuring isn’t working and Ron Johnson needs to go. The best thing the board can do now is to fire Johnson, get a lift in the stock, and issue a massively dilutive secondary to help finance this train wreck through 2015.

I bet your idiot black boxes can’t do this.

That’s the oversold signal results for the past 12 months. And this is when it was flagged last.

Any questions?

The difference between the guy making a little and the one making a lot is an edge– the small advantage that puts him over the top. That’s all I endeavor to deliver and I believe we’ve done that, exceedingly well since 2009–with The PPT.

We haven’t gone down more than 2% in the month of March since the great debacle of 2001. Ask yourself, aside from sequestration, does this market feel like 2001? Back then, the country was about to go to war, the dot com implosion was full throttle to the downside and life as we knew it sucked testicles.

I have $1,000 bottles of wine being opened to make sauces.

There is nothing, whatsoever, in this tape that spells danger.

Short the trend setters, the runaway locomotives, at your own peril.

Gentlemen like me only short the very worst of stocks, not the ones favored by the stock Gods. JCP is going to single digits and the CEOs of silver mining companies will toss themselves out of helicopters, reminiscent of a time when law and order ruled the psyche of man.

Down with the corrupt, perverts, who short upstanding ‘job creators’–worthy peddlers of healthy and nutritious vitamins. HLF is going higher–small man.

Housing is where it’s at. If you blink for too long, you’re gonna miss it. Both BZH and USG are steals.

I closed the day at new year to date highs, but still off by 15% from the all-time variety. When I get there, you will know–because I’m gonna run your face over with my space rocket.

I added to my HLF position.

I am +2.5% today, pushing my year to date returns to 16%. I am fueled by the losses at Pershing Square, short JCP, long BX, WNC, USG, PAMT and a big push by BZH.

My cash has been zero for weeks, as I am leveraged at 110% long, only offset by my shorts in CCL, AG and JCP.

The Fly’s swagger is back with extreme force and certitude. I am urinating on graves, drinking bottles of malted liquor, spitting fire into the sky like a dragon.

I sold out of APO, booking a 10% gain, and bulked up on BZH to reduce my basis down to $16. I have buying power set aside, from the APO sales, to initiate another short position. However, I am not going to throw it on today. I have a little more work to do on the name and rather take some time to figure out my entry point tonight.

Drink heavily plebs and gentleman alike of iBankCoin. The market’s are at new highs and the shorts are dead, save the distinguished gents who are short Tea Party investments, broken toilet boats and low end retailers trying to up-end its caste.

May the bones of the dead bears fuel the engines of the market for another 2,000 points before we are gluttonously content.

NOTE: I sold out of VHC today, raising buying power for future shorts.

All sellers in the bond market today. What’s particularly notable is the amount of sellers in the long dated 2097 bonds, which are already trading 25+ points under par. Apparently, some “smart money” doesn’t think JCP will make it until 2097.

Here are the order books for a variety of JCP bonds.

2097

2036

2018

2017

Any buyers out there? Anyone?

Disclosure: I am short JCP

I took profits on APO and added to my BZH position by 30%.

UPDATE: I sold out of VHC.

The market is about to hit new highs and Jc Penney CDS are about to blow out again. “Montauk Bill” likes JCP, so much, he might have purchased that 10 million share block from Vornado last night. Nonetheless, the smart money is taking out insurance on JCP debt, via credit default swaps.

We’re at the 5 figure mark now, +300% over the past 12 months, with no end in sight.

JCP 5yr CDS

They will need to raise money in 2013 and it is going to be punitive to shareholders.

Here are current quotes on JCP paper. As you can see,  the older the maturity, the worse the price gets.

Disclosure: I am short JCP

The main reason why I built The PPT was to automate my research. I needed a program that could automatically evaluate the balance sheets of every stock publicly traded, compared their debt vs cash, let me know when earnings estimates have been lowered, alert me to short positions, allow me to isolate companies who are trading poorly and whose earnings and revenues are decelerating.

I built PPT when the market was going down, in bear mode. This was to alert me to dangers, assist me in short sales.

Since then, I increased the power of the tool. Granted, many of you still can’t grasp how to use it, which is being addressed in the current iteration, PPT 5.0–soon to be released this century. But I know how to and will share with you a few screen results.

Most impaired balance sheets, trending lower.

Downward revisions, trending lower.

My current shorts are CCL, AG and JCP. I intend to start hedging longs until I flip the switch and go net short after tax day, 4/15. Until then, I am in a very big net long position, but will take advantageous shorts to take advantage of the slowly but surely dilapidation of this upward moving tape.

I will post my new short ideas tomorrow, after The Devil and I figure out which ones are going lower.

It’s very early in the JCP story. However, one thing is for certain, they will draw down on all of their cash by the end of 2013. This company is going to recapitalize, whether it be through private financing or a large, dilutive secondary, or bond offering.  It’s not in any danger of going bankrupt, just yet, since they have a credit facility to fall back on. But the trends in retail are the very worst ever witnessed by a big box store, including SHLD.

If forced to liquidate their real estate to raise capital, they are likely to receive “distressed bids” from prospective buyers, nowhere close to $200-250 per sq ft.

The vultures will be circling their wagons until they nail down some financing.

Ron Johnson made a huge mistake, thinking the old horse faced– sea hag crowd– at JCP was hip like the AAPL dork-a-tron line slaves. Clearly, he struck lightening in the bottle with the Apple stores and is now comically lost at JCP.

Being that Bill Ackman is getting “barbelled” on both JCP and HLF, I suspect there might be an exaggerated run on both positions, to further weaken “Montauk Bill” and his scurrilous ways.

Other positions of Bill’s to keep an eye on, in case he needs to raise money, are BEAM, CP, GGP, TGT and LOW.

Ackman owns good, liquid stocks, but these two (JCP, HLF) are going dreadfully wrong for him and I am obliged to kick him down a few flights of spiked steps–as I sashay (no homo) to my next destination.