iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
15,851 Blog Posts

Mnuchin Nearly Loses His Cool During Unveiling of Trump’s Tax Reforms

I loved this press conference with Sec. Mnuchin, with his tight upper lip condescending retorts, while fielding questions from abject morons in the White House press pool. You can see him physically recoiling from the low level thinkers, trying to refrain himself from losing his shit and having a Tourette’s episode.

Let’s make an obvious point here. Any tax cut on business will benefit a billionaire and put more money into his pockets. That shouldn’t even be a subject worth discussing, yet here are the knuckle-draggers in the media asking for Trump’s tax returns and accusing him of cutting taxes to just ingratiation himself with a little more cash before departing into the sunset.

Mnuchin informs the media of ‘MASSIVE’ tax cuts, which help everyone.

Mnuchin then tries and fails to contain his seething hatred for stupid people asking dumb questions.

Mnuchin nearly tells reporter to fuck off after fielding a ‘when will the President release his tax return’ question.

Hilarious.

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Trump Unveils Massive Tax Cut Plan: No More AMT, Cap Gains Slashed to 20%

Markets love this shit. Nothing gets the animal spirits going more than a massive tax cut, especially on capital gains.

Here are the highlights.

A zero percent rate for couple on their first $24k in income.

‘In essence, we are creating a zero tax rate,’ said Cohn.

Reducing 7 brackets to 3: 10%, 25% and 35%

Corporate tax rate: 15%

Elimination of the AMT

Elimination of the death tax

We’re digesting big gains, so don’t expect another +200 today. But, this is long term bullish for stock holders. The last time we had a tax cut like this was under the idiot Bush and that paved the way for extreme hedonism and the best market since 1999. Albeit, it also led to the housing bubble and subsequent crash. We’ll deal with that later on.

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Extremely Bullish Here, Even After the Big Run

Cue fuckhead saying ‘well, that was the top right there.’

Without getting into details that would fly right over your heads anyway, just know that I am extremely confident that the market will extend gains in the short term. Don’t hold me to this bullish treatise for today or tomorrow. But, inside a week, stocks will be higher than they are now.

How do I know?

I own a fucking time machine, literally.

What to buy?

Well, The Option Addict is in Exodus for the entire month of April and has been doling out fresh picks all month long. If trading isn’t your thing, you’ll be fine in any number of macro ETFs. For my money, since I prefer to be thematic (it’s therapeutic), I am long defense stocks and companies who will help rebuild all of the schools and sewers we’re about to destroy abroad.

“The Fly” is all about nation building these days.

Everyone thinks they know what’s going on — swashbuckling about in the vagaries of uncertainty. There are a lot of ‘experts’ out here who make ridiculous calls, proclaiming to be gurus. I am just one modest man, with an IQ twice theirs, in a time machine, speeding for the sun in a car made from dynamite sticks.

The call: stay long and add on any weakness (and I mean any).

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Twitter ‘Crushes’ Estimates, Books 7.8% Decrease in Revenues, Year Over Year

@Jack finally did it. He posted a better than expected quarter at Twitter, locking in a 13% decrease in revenues — which was less than expected. Overall, if judging Twitter as a business and not an arcade game of earnings surprises, the business is an abomination.

Ad revenues, sharply lower — in spite of the fact that ad engagements were sharply higher.

MAU’s increased 7%, thanks to all of the fake news disseminated by all their fake users.

Reports Q1 (Mar) earnings of $0.11 per share, $0.10 better than the Capital IQ Consensus of $0.01; revenues fell 7.8% year/year to $548 mln vs the $513.04 mln Capital IQ Consensus.

Advertising revenue totaled $474 million, a decrease of 11% year-over-year.
Data licensing and other revenue totaled $74 million, an increase of 17% year-over-year.
US revenue totaled $341 million, a decrease of 13% year-over-year.
International revenue totaled $208 million, an increase of 2% year-over-year.
Total ad engagements increased 139% year-over-year.
Cost per engagement (CPE) decreased 63% year-over-year.
Q1 GAAP expenses totaled $589 million, a decrease of 10% year-over-year.

Q1 adjusted EBITDA of $170 million, a decrease of 6% year-over-year, representing an adjusted EBITDA margin of 31%.
Average monthly active users were 328 million in Q1 (Street Expectations were 322mln), an increase of 6% year-over-year and compared to 319 million in the previous quarter.

Average US MAUs were 70 million in Q1, an increase of 7% year-over-year and compared to 67 million in the previous quarter.
Average international MAUs were 259 million in Q1, an increase of 6% year-over-year and compared to 252 million in the previous quarter.
DAU grew 14% year-over-year, an acceleration from 11% in Q4’16, 7% in Q3’16, 5% in Q2’16, and 3% in Q1’16.

Outlook

Q2
Adjusted EBITDA to be between $95 million and $115 million
Adjusted EBITDA margin to be between 21% and 21.5%
SBC to be between $115 million and $125 million
FY 2017

Total non-GAAP expenses to be flat to down 5%, compared to full year 2016
SBC to be down 20% to 25%, compared to full year 2016
Capital expenditures to be between $300 million and $400 million

Shares are sharply higher in the pre-market over this glorious report.

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Reviewing the Exodus Call to Buy $TNA

Six days ago, TNA flagged oversold inside Exodus — for its 12 month algo — a very rare high probability call.

How do the algos work?

They take numerous factors into account, judging the price action of the ETF, persuaded by price formation, volume, relative strength, and a sundry of external metric which I dubbed ‘sub rosa.’

The algorithms rank the ETF on 4 different algos, 3mo, 6mo, 12mo and all-time. The 12mo algo is the most reliable because of the data set, and also because it is the most relevant as far as recent price action is concerned.

For example, today’s market behavior is totally different from 2009 or 2012. The way the system works is it learns new levels, tracks price performance from those levels, and discloses them to members.

Here was the call.

As you can see by the historical price performance, the oversold signal is flawless over a 5 day time frame — for an average return upwards of 11%. Judging by today’s close above $111, the ETF is performing exactly as predicted.

Based on these numbers, TNA has more upside over the next 4 trading days.

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US Destroyer Has Close Encounter With Iranian Vessel in Straits of Hormuz

The USS Mahan has to take evasive actions in the Straits of Hormuz today, in order to avoid an Iranian ‘fast attack’ vessel. The Mahan sounded the danger alarm, fired flares and manned their weapons, but the Iranian cowards tucked tail and scattered before reaching within 1,000 yards of the U.S. destroyer.

“Coming inbound at a high rate of speed like that and manning weapons, despite clear warnings from the ship, is obviously provocative behavior,” said one American official in describing the Iranian actions.

This is the second time in recent months that the Mahan was put on high alert due to pesky Iranian vessels. Back in January, the Mahan fired three warning shots from a .50 caliber machine gun in order to stop small Iranian vessels from harassing them.

The U.S. military said Iranian vessels harassed US warships a total of 35 times in 2016 — a 50% spike from the year prior.

During the Presidential campaign, Trump was livid over the treatment of US sailors, after a swarm of Iranian vessels seized an American riverine, blindfolded the crew, struck the US flag in exchange for an Iranian, and interrogated 10 crew members, while humiliating them on Iranian tv.

Trump said of the ordeal, “When I see pictures of them with arms up in the air and guns pointed at them, I wouldn’t exactly say that’s friendly.”

Trump added at a campaign rally, “And by the way, with Iran, when they circle our beautiful destroyers with their little boats and they make gestures that our people — that they shouldn’t be allowed to make, they will be shot out of the water.”

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Chipotle is Back: Company Crushes Estimates; Shares Tempered by ‘Unauthorized Activity’ on Payment Processing

The ecoli scare appears to be behind them. But a new problem arises, this time with ‘unauthorized activity’ on their payment processing systems. The great news of a sharp resurgence in their core business is being marred by this disclosure of chicanery. The dates in question are March 24-April 17 — where customer cards might’ve been compromised.

Hacking aside, it appears the company has turned the corner, on both demand and input costs.

Reports Q1 (Mar) earnings of $1.60 per share, $0.31 better than the Capital IQ Consensus of $1.29; revenues rose 28.1% year/year to $1.07 bln vs the $1.05 bln Capital IQ Consensus. The increase in revenue was driven by comparable restaurant sales increases and to a lesser extent by new restaurant openings. Comparable restaurant sales increased due to improved customer traffic, reduced promotional activity, and increased average check.

Comparable restaurant sales increased 17.8% vs. ests. near +15.5%, which included a benefit of 0.6% due to previously deferred revenue related to Chiptopia recognized during the quarter. We opened 57 new restaurants during the quarter and closed 15 ShopHouse Southeast Asian Kitchen restaurants and one Chipotle restaurant. Our total restaurant count as of the end of the quarter was 2,291.

Food costs were 33.8% of revenue, a decrease of 150 basis points compared to the first quarter of 2016
. The decrease was primarily driven by lower food waste and testing costs, and bringing the preparation of lettuce and bell peppers back to our restaurants. This decrease was partially offset by higher avocado prices.

Restaurant level operating margin was 17.7% in the quarter, an increase from 6.8% in the first quarter of 2016. The increase was primarily driven by sales leverage, lower marketing and promotional spend, efficiencies in labor, and lower food costs. The restaurant level operating margin also benefited by 0.15% from sales leverage related to recognizing revenue previously deferred from Chiptopia, slightly offset by free catering discounts for Chiptopia. General and administrative expenses were 6.5% of revenue for the first quarter of 2017, a decrease of 90 basis points from the first quarter of 2016.

Reaffirms: For the full year of 2017, management is targeting the following: Comparable restaurant sales increases in the high-single digits 195 – 210 new restaurant openings An estimated effective full year tax rate of approximately 39.0%

Shares were north of $500 until the unauthorized activity was disclosed. In my estimation, customers are numb to credit card intrusions and this dip is a reason to buy.

The stock is up around 1% in the after hours. Since the shares have been on a tear as of late, it wouldn’t surprise me to see people take profits here until more information is available.

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U.S. Steel Ravaged in After Hours Trade After Reporting Earnings Shortfall

Trump has failed the steel workers of America. The fundamentals have not caught up with the sentiment behind this trade. This much is obvious. Going forward, however, buying this dip might prove to be opportunistic.

Reports Q1 (Mar) loss of $0.83 per share, excluding non-recurring items, $1.18 worse than the Capital IQ Consensus of $0.35; revenues rose 16.4% year/year to $2.73 bln vs the $2.91 bln Capital IQ Consensus.

First quarter results for our Flat-Rolled segment declined significantly compared with the fourth quarter, as we expected, primarily due to higher raw material costs, increased planned outage costs, seasonally lower results from our mining operations, and restart costs associated with the Granite City hot strip mill and our Keetac iron ore mine.

Change in Accounting Estimate — Capitalization and Depreciation Method
During the first quarter of 2017, we completed a review of our accounting policy for property, plant and equipment depreciated on a group basis. As a result of this review, we changed our accounting method for property, plant and equipment from the group method of depreciation to the unitary method of depreciation, effective as of January 1, 2017.

2017 Outlook

“Market conditions have continued to improve, and we will realize greater benefits as these improved conditions are recognized more fully in our future results.

We issued equity last August to give us the financial strength and liquidity to position us to establish an asset revitalization plan large enough to resolve our issues, and to see that plan through to completion. As we get deeper into our asset revitalization efforts, we are seeing opportunities for greater efficiency in implementing our plan. We believe we can create more long-term and sustainable value by moving faster now.

2017 net earnings of approximately $260 million, or $1.50 per share (Capital IQ consensus $2.83), and adjusted EBITDA of approximately $1.1 billion;
Results for our Flat-Rolled, European, and Tubular segments to be higher than 2016; Other Businesses to be comparable to 2016 and approximately $50 million of postretirement benefit expense.

Shares are off by 14% in the after hours.

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Uber Wants to Launch Flying Cars by 2020: Will You Partake?

The livery service company, Uber, wants to go full Jettsons — introducing flying taxis in the Dallas-Fort Worth and Dubai markets by 2020.

The cars will be small, piece of shit, electric air-craft — capable of landing and taking off vertically. They will emit zero emissions and will likely kill everyone on board instantly, upon errantly crashing into a live powerline.

The upside to flying cars, obviously, is travel time. The company estimates that by placing cars in the sky, the travel time from San Fran to San Jose could be cut down from 2 hours to 15 minutes.

I am certain the eggheads at Uber aren’t accounting for air-traffic, which will be abundant once everyone starts doing it. If you thought traffic was bad on the ground, wait until your flying taxi runs out of juice at 1,000 ft in the sky.

So, will you take the plunge into an Uber flying taxi?

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Volatility Sinks to New Lows, Dollar Ravaged, Stocks Fly: What’s Next?

There isn’t fear in the tape, which is a problem. Set that aside for the moment, there are several investment themes worth pursuing here in light of recent news.

Here is my checklist.

1. China is accelerating. This is bullish for commodities and companies who do business in China.
2. If Macron wins, the ECB gets to rig their markets some more.
3.Trump playing ball with establishment means he will get stuff done, such as lower corporate tax rate and infrastructure bill.
4. Weak dollar is great for American exporters.
5. Rising bond yields infers inflation. If we do not get it, rising yields is a net negative.
6. Oil is basing out around $50, ahead of Saudi Aramco IPO. I like my chances for a breakout ahead of it.
7. War

Investable themes

China-centric plays, such as CLF, CAT, FLS, YUMC, BABA, JD, CTRP. There are plenty more.
European banks: CS, DB
Steel/materials: X, ATI
Weak dollar winners: GM, F, PG, LNG
Oil: CLR, OAS, CXO
War/nation building: KBR, CSL, RTN, OA, ESLT, just to name a few.

In the event of war, I’d expect to see the knee-jerk reaction to the downside, quickly digested, followed by monies being allocated ‘to the winners.’ Without war, the Trump agenda and booming Chinese economy come into play. There are several ways to win here. I don’t want to sound to overzealous after a giant move higher, but this move will not stop until all options are exhausted. There is a good chance we’re going to see a massive market rally over the next 12 months.

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