Happy Krampusnacht; Stocks Plunge

The Germans celebrate Krampusnacht on December 5th (today), each and evert year, a day reserved for celebrating the fabled life of a certain Krampus, a half goat elf of Santa Claus who whisks away all of the naughty children. I do believe he does this at the behest of the very kind Santa Claus and I do believe he eats said children after he’s done. I do not know what type of food Krampus lives sustains himself on. But I am pretty certain small, naughty, children should be hiding this time of year.

Stocks are officially in idiot mode, the odd period just before Xmas where the volume is low and the opportunities sparse. Mostly everyone had a fine year and have wrapped up operations, fearing an end of year surprise that could jeopardize bonuses and fees. With only 33% of stocks higher today and my well diversified quant portfolio off by 0.28%, I am certain a great many of you naughty children are hiding out in the market now — wishing you had already sold.

Today’s big standout, aside from HMNY getting crushed down to the pancake, is copper — off by 4.5%. Whenever Dr. Copper hurries lower, people get to thinking China is somehow screwed over. I believe this is an idiot’s mentality, especially since China’s stock market performed best in 2017. I think it’s fair to assume markets will never really trade lower, not in our lifetimes. Best thing to do is diversify your investments, glance over at them every so often, and eat lots of sandwiches. The active manager stuff makes for a good drama, but it’s really overrated and I do believe I’ve proven that with my Quant strategies.

During 2018, I am shifting from weekly adjustments to quarterly. I will do this because the portfolio that I will build will be of supreme elegance, built to crush the S&P 500 with little to no effort. For a more timely portfolio and to keep the blood flowing, I’ll probably do a monthly one too.

As for my discretionary account: they’re pretty much filled with lottery tickets and have an insane quality to them. I am way more interested in automating my investments, than having to bother digging through the mud for a few choice trades. But I might be saying that now because ABC News induced me to buy more UVXY last week. Who knows?

This is probably why the Nasdaq got smashed to fucking pieces yesterday and is indicated lower today. The tax bill is somewhat confusing — but here’s the gist of what’s going on and how it will hurt tech firms.

The Senate draft showed an AMT at 20%, not a repeal. Tech firms who get tax credits for IP, new equipment, and research and development would lose their potency, since the corporate tax rate would remain at the same level.

“The stock market, I think, is going to have a very big day based on the massive tax cut that we’re very much in the process of getting approved,” the president said Monday morning. The only thing that hurts share prices, Trump said, “is the fake news, and there’s plenty of that.”

A simple “drafting error” most likely left the AMT in the Senate bill at 20 percent, said Jennifer McCloskey, director of government affairs at the Information Technology Industry Council, a group that represents tech companies including Google, Oracle and Amazon. Congress should repeal the AMT completely or cut it to a level proportionate to the new 20 percent corporate tax rate, she said.

Under existing rules, every corporation must calculate its tax bill according to both the regular corporate income tax and the AMT, and pay whichever’s higher. With the AMT at 20 percent and the current corporate rate at 35 percent, most companies end up paying tax calculated at the higher regular corporate rate.

“As a policy matter, the AMT rate is supposed to be lower than the regular income tax rate,” said Neil Barr, head of the tax department at law firm Davis Polk & Wardwell LLP.

Backing the corporate AMT out of the Senate bill now would mean giving up roughly $40 billion worth of revenue over 10 years — an amount that’s not prohibitive in the context of legislation that’s estimated to cut federal revenue by roughly $1.4 trillion over a decade.

“It would be nice if we could figure out a way” to dump the tax in a House-Senate conference committee that will aim to merge the chambers’ differing versions into a final bill, said Senator John Thune, the chamber’s third-ranking Republican leader. Thune, of South Dakota, said lawmakers were analyzing the AMT’s impact on Monday.

By retaining the AMT companies would be prevented from using tax write-offs, as such tech stocks are under pressure.

Some believe the AMT will get eliminated in the final draft, since it doesn’t work with other elements of the bill.

Because the AMT “doesn’t seem to work with some core elements of the overall tax reform package, it can’t survive conference in its current form,” said Michael Mundaca, the co-leader of the Ernst & Young Americas Tax Center.

Keeping the AMT “eviscerates the impact of certain pro-growth policies like the R&D tax credit and exacerbates the international anti-abuse rules,” wrote the Chamber’s Harris.

Famed Yale economist and former Morgan Stanley analyst, Stephen Roach, had some choice words for Bitcoin yesterday, saying “this is a toxic concept for investors. This is a dangerous speculative bubble by any shadow or stretch of the imagination. I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career.”

Sorry Bitmorons. Mr. Roach has spoken and now your days are numbered.

He sums up the future of Bitcoins nicely:

“Like all bubbles, they burst,” Roach said.

“They go down, and the one who’s made the last investment gets hurt the most, there’s no question about it.”

BTC is trading at new highs today, $11,870 +2.3%.

Now what will you do, Trumpfags? Robert Mueller has unlimited power and resources and will keep digging into Trump’s corrupt past until he finds something worth hanging him for. There isn’t a chance in red hell Trump will allow Mueller to dig into his finances — because then it’s game-set-match, so he’ll probably be fired soon, which will set off alarms everywhere and trigger impeachment proceedings. I suspect that is the point.

Trump owes the German bank over $300 million in loans.

Special Counsel Robert Mueller has asked Deutsche Bank (DBKGn.DE) to share data on accounts held by U.S. President Donald Trump and his family, a person close to the matter said on Tuesday.

Germany’s largest bank received a subpoena from Mueller several weeks ago to provide information on certain money and credit transactions, the person added, confirming a report by German daily Handelsblatt published on Tuesday.

Deutsche Bank, which has loaned the Trump organization millions of dollars for real estate ventures, said it would not comment on any of its clients.

Deutsche Bank rejected demands in June by U.S. House Democrats to provide details of Trump’s finances, citing privacy laws.

Here is some of the feedback from meaningless people on Twitter.

BE WARNED. Robert Mueller has just crossed Trump's "red line" when it comes to his investigation. He is officially investigating Trump's finances.

Deutsche Bank received a subpoena from Mueller on Trump accounts

The next two weeks will be crucial. Will Trump have Mueller fired?

— Brian Krassenstein? (@krassenstein) December 5, 2017

Is Mueller trying to get fired in order to set off a chain of events that will end in Trump's impeachment? https://t.co/Bi0pHvsqP6

— Paul Joseph Watson (@PrisonPlanet) December 5, 2017

If Trump is going to fire Mueller, today is the day he'll do it.

Trump's Russia personal banking information handed over to Robert Mueller https://t.co/9h2OHyIoSG#TuesdayThoughts

— Holly O'Reilly (@AynRandPaulRyan) December 5, 2017

By subpoening Deutsche Bank accounts and going after the sleazy financial transactions of criminal con-man Trump, Robert Mueller is taking a page out of playbook of Eliot Ness when he took down Al Capone. https://t.co/ysrQt2GQPt

— Bill Madden (@activist360) December 5, 2017

SPACEFAGS GET IN HERE.

The Voyager satellite was launched in 1977, en route to motherfucking Saturn. For the first time in 37 years, we just remotely initiated its thrusters. What?! That fucker is 13 billion miles from the sun, beset with 1970s technology. It’s still going strong — and it takes 19 hours and 35 minutes for a Voyager signal to bounce back to earth. We’re going to lose contact with Voyager 1 within the decade and after that out first beacon won’t set upon another star for 40,000 years; by that time we’ll be the god damned high tech space aliens, invading other planets for sport, taking all of their resources, and shit. Both Voyager’s 1 and 2 are armed with ‘The Golden Record’, which is a gold plated record with 90 minutes of music, sounds from earth, and voices with 55 languages, and etchings on its surface — an advertisement of sorts for aliens who might come upon it and then use it to find us and destroy our civilization.

European markets are Yellen soft this morning and S&P futures are +4, Dow +70, Nasdaq -4. WTI is -0.4% and our yield curve is 56bps, which apparently means absolutely nothing these days.

Regal Theatres just caught a bid for $23 per share from Cineworld.

Aside from that, not much else going on this morning. It’s a bit of a snooze fest.

Here are some other headlines worthy of your attention.

HMNY -8.1% (Cinemark (CNK) announced an $8.99 monthly movie membership program )
Galectin Therapeutics announces results from Phase 2b NASH-CX trial; did not reach statistical significance for primary endpoint
SNAP +6% (upgraded to Overweight from Equal Weight at Barclays)
VALE +2.4% (upgraded to Outperform from Neutral at Credit Suisse)
AutoZone prelim Q1 $10.00 vs $9.79 Capital IQ Consensus Estimate; revs $2.59 bln vs $2.54 bln Capital IQ Consensus Estimate

Ken Langone is one of few men worth idolizing. From Wall Street to founding Home Deport to donating an unrestricted $200 million to NYU’s Medical Center, Langone is a perfect example of rags to riches and then using said riches for good. The NYU Medical Center is now called NYU Langone; and might I add that it has the single best cafeteria ever for a hospital. If you’re on the east side of NY, trust me when I tell you it’s worth the visit, if only for their high end coffee machines.

Ken Langone visited CNBC to discuss the Trump tax bill, saying that if it passed it would mark an end to the Democratic Party because it would ‘unleash economic forces all to the good for a lot of people.’

Are we still paying attention to the Dow? I’d say no, right? Both the S&P and Nasdaq cascaded lower from a robust open, as expected, with the latter seizing up and dropping dead — down nearly 70 NASDAQS. This is because the President can’t keep his trap shut, always taking to the computers to boast about the stock market and how awesome he is. Plainly, these are the tweets of a psychopath.

With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!

— Donald J. Trump (@realDonaldTrump) December 4, 2017

Will he get us all killed? I sure do hope so.

The big winners today were uranium stock — holy shit they sprung higher. There were 10%+ gains in CCJ, UUUU, UEC, DNN and URG.

Reason being: Kazatomprom, Kazakhstan’s state-owned uranium miner, said they’d slash output by 20% next year. The shitty country of Kazakhstan represents ~35% of world production of uranium.

Other strong sectors included lots of retail, like apparel, restaurants, auto parts, entertaining and grocery — all places that might be immediately impacted by tax cuts.

On the downside was tech, a most deleterious drop — which caused by Bubble Basket to plummet by more than 2%.

Some of the standout losers include IPGP, ANET, TTWO, VMW, NOW, AMD, SHOP, FSLR and thankfully NVDA.

My quant portfolio shed 0.38% and my discretionary didn’t do too badly, considering UVXY had been lower by more than 10% earlier. It closed down less than 3%. I enjoyed gains in my NVDA short and UCTT, while enduring losses in my BAC short, RUSS, AQ and WLK.

Judging by today’s tape, tomorrow could be a most heinous display of panic, one that will conure up grave memories of when Krampus came for Xmas and ate your portfolios. Do you remember when that happened a few years ago? The lot of you were dreadfully scorned and truthfully you deserved the beatings you took — because you were fat, greedy, and slovenly.

“The Fly” must be going now. I bid you good day.

Are we still paying attention to the Dow? I’d say no, right? Both the S&P and Nasdaq cascaded lower from a robust open, as expected, with the latter seizing up and dropping dead — down nearly 70 NASDAQS. This is because the President can’t keep his trap shut, always taking to the computers to boast about the stock market and how awesome he is. Plainly, these are the tweets of a psychopath.

With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!

— Donald J. Trump (@realDonaldTrump) December 4, 2017

Will he get us all killed? I sure do hope so.

The big winners today were uranium stock — holy shit they sprung higher. There were 10%+ gains in CCJ, UUUU, UEC, DNN and URG.

Reason being: Kazatomprom, Kazakhstan’s state-owned uranium miner, said they’d slash output by 20% next year. The shitty country of Kazakhstan represents ~35% of world production of uranium.

Other strong sectors included lots of retail, like apparel, restaurants, auto parts, entertaining and grocery — all places that might be immediately impacted by tax cuts.

On the downside was tech, a most deleterious drop — which caused by Bubble Basket to plummet by more than 2%.

Some of the standout losers include IPGP, ANET, TTWO, VMW, NOW, AMD, SHOP, FSLR and thankfully NVDA.

My quant portfolio shed 0.38% and my discretionary didn’t do too badly, considering UVXY had been lower by more than 10% earlier. It closed down less than 3%. I enjoyed gains in my NVDA short and UCTT, while enduring losses in my BAC short, RUSS, AQ and WLK.

Judging by today’s tape, tomorrow could be a most heinous display of panic, one that will conure up grave memories of when Krampus came for Xmas and ate your portfolios. Do you remember when that happened a few years ago? The lot of you were dreadfully scorned and truthfully you deserved the beatings you took — because you were fat, greedy, and slovenly.

“The Fly” must be going now. I bid you good day.

Morning fuckers,

With the great vote on Cutting Taxes, this could be a big day for the Stock Market – and YOU!

— Donald J. Trump (@realDonaldTrump) December 4, 2017

I didn’t sleep all of last night — because I couldn’t. Instead, I wrote chapter X of my story and mapped out how the whole thing will end. I’m thinking the story of Ghetto Fabulous and then into the depths of hell, circa 2002, and end it right near the god damned bottom of the whole kerfuffle. It’s a fine book, much better than the first — and it was written by a madman who didn’t sleep — because he couldn’t.

In you’re interested in part 1 of the three part story, you can buy it here for a song.

Admittedly, I’ve been rather obsessed with my excel spreadsheets, creating risk analysis spreadsheets, scoring Sharpe, Sortino, Treynor and other risk measurements — because I call it fun and love to analyze things that most people don’t. This doesn’t make me special or smarter, just different. Funny thing, my step father is had a Phd and three masters in mathematics and he couldn’t care less about this sort of stuff — which is puzzling to me. I always figured he’d want to partake in a little numbers crunching — but maybe this is too rote for his insane brain.

The DAX is higher by 1.47% and Dow futures are +240. It’s worth noting, the Nasdaq is only +37.

WTI is lower by 1% and the dollar is +0.4% v the Euro.

The big story of the day: CVS is buying AET for $207 or $77 billion. Clearly, the anti-trusters should be shitting their pants over the audacity of this deal, protesting to block it — but it’ll pass. We’re in an age of robber barons and big business can do as they like.

Did you know the average savings account in America is $500?

Here are some other headlines of splendor.

Finisar downgraded to Buy at Needham; tgt $25
Ultra Clean Holdings upgraded to Buy at Stifel after the pullback
Teck Resources downgraded to Neutral from Buy at Citigroup
UPS upgraded to Buy from Hold at Deutsche Bank
Charter Comm downgraded to Underweight from Equal Weight at Barclays
DPW holdings subsidiary Coolisys technologies unveils cryptocurrency hardware

Greetings misfits, I bid you good evening from the confines of my VIXTITS compound, where the ground is very dry and the humor even drier. I see literally none of you cared to discuss Sharpe ratios in my previous post; it’s almost as if you’re retarded on purpose. Do you not feel like improving upon yourselves, or do you simply want to drift away into the night a loser?

Speaking of which, Donald Trump is encouraging investors to sue ABC News over their fake news report on Friday. As a matter of fact, being that it quite literally induced me to buy more UVXY, I might take him up on his idea — an idea that I had first, might I add.

I WANT ABC NEWS TO REFUND THE STOCK MARKET FOR TODAY'S LOSSES

— The_Real_Fly (@The_Real_Fly) December 2, 2017

People who lost money when the Stock Market went down 350 points based on the False and Dishonest reporting of Brian Ross of @ABC News (he has been suspended), should consider hiring a lawyer and suing ABC for the damages this bad reporting has caused – many millions of dollars!

— Donald J. Trump (@realDonaldTrump) December 3, 2017

What do you think about the President encouraging his people to sue the media for publishing market moving stories? Pretty surreal, no? I get how Trump hates them and equates them to being the anti-christ; but it’s all rather disjointing in a beautiful way. What’s even more amazing, might I add, is how markets don’t seem to be flustered by chaos.

Dow futures are +236. Prepare for a Monday shitstorm of buyers at the open. However, I can almost promise you it will be faded.