From the Desk of the Famous Stockbroker Vladimir Putin: “This Russian Business is Good, You Buy”

Hi, this is Vladimir Putin from Russia, how are you?

Listen, I know we’ve had difficult few months between our two countries. But maybe it’s time to put that on the side so that you can make a little money, no?

The name of the company is Yandex, ticker symbol is YNDX. Grab a pen, I’ll be brief.

The company makes lots of rubles in Russia. It’s like your Google, but much better and without all of the distractions of alternative businesses. Yandex will be bigger than Google, especially after we conquer your country and imprison all of the executive from Google and destroy its headquarters.

Look at how smoothly the search works, yes? I typed in a few questions and Yandex provided me with answers. Amazing.

Now you look at chart.

See how it goes up, like Russian spy inside your government? That’s good, very good.

Now look at quarterly numbers, which were just posted. Totally legit. Real numbers, no fakes like Google.

Reports Q1 (Mar) earnings of RUB11.41 per share, excluding non-recurring items, RUB2.18 better than the two analyst estimate of RUB9.23; revenues rose 25.4% year/year to RUB20.65 bln vs the RUB20.28 bln Capital IQ Consensus. Online ad rev +23%.

Based on the solid start of the year, we are increasing our revenue guidance, and currently expect our ruble-based revenue to grow in the range of 17% to 20% for the full year 2017.” This is a raise from +16-19%.

Now you buy, ok? The only question now is how much? Normally for my oligarch clients, I suggest purchase of 1 to 2 million shares, just to start out. I always like to say “Igor, if you want to facking make some money in the stock, take controlling interest, fire the board, and pay off government officials to make shares go higher. But if you just want to dip your toes, to give chance, buy 1-2 million shares. And don’t tell me you have to speak to Natasha. Who makes decision in your house to bake bread? Does Natasha ask you how long to bake bread, or does she just do it?”

So now you are familiar and very comfortable with Vlad. Now tell me my American friend, what is your social security numbers? I am going to fill out a new account form for you now — but it will need to be verified by a copy of your drivers license.

The office of Elijah Cummings, ranking member on the House Committee on Oversight and Government reform, released the following statement, regarding General Flynn and his foreign dealings.

Cummings Releases Three New Docs on Flynn

Pentagon Explicitly Warned Flynn Not to Accept Foreign Government Payments; Newly Unclassified Letter Confirms Flynn Did Not Report Foreign Payments; Defense Department IG Launches Its Own Investigation

Washington, D.C. (Apr. 27, 2017)—Today, Rep. Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, released new documents relating to Lt. General Michael Flynn, who was fired by President Trump from his position as National Security Advisor after concealing information about his communications with the Russian Ambassador to the United States.

“These documents raise grave questions about why General Flynn concealed the payments he received from foreign sources after he was warned explicitly by the Pentagon,” said Ranking Member Cummings. “Our next step is to get the documents we are seeking from the White House so we can complete our investigation. I thank the Department of Defense for providing us with unclassified versions of these documents.”

First, the Oversight Committee has obtained a letter to Flynn on October 8, 2014, from the Defense Intelligence Agency (DIA) Office of General Counsel explicitly warning Flynn, as he entered retirement, that he was prohibited by the Constitution from receiving payments from foreign sources without advance permission:

“Foreign Compensation Requires Advance Approval

The Emoluments Clause of the U.S. Constitution, article I, section 9, clause 8, as interpreted in Comptroller General opinions and by the Department of Justice Office of Legal Counsel, prohibits receipt of consulting fees, gifts, travel expenses, honoraria, or salary by all retired military personnel, officer and enlisted, regular and reserve, from a foreign government unless congressional consent is first obtained. Consent is provided by Congress under 37 U.S.C. 908, which requires advance approval from the relevant service secretary and the Secretary of State before accepting employment, consulting fees, gifts, travel expenses, honoraria, or salary from a foreign government. … Accordingly, if you are ever in a position where you would receive an emolument from a foreign government or from an entity that might be controlled by a foreign government, be sure to obtain advance approval from the Army prior to acceptance.” (emphasis in original)

In addition, this week, the Defense Department produced to the Oversight Committee an unclassified, redacted version of a letter that DIA originally sent to the Committee in classified form on April 7, 2017.

The new DIA letter counters the suggestion by Flynn’s attorney on Tuesday that Flynn followed appropriate procedures for accepting foreign funds for his trip to Moscow in December 2015 when he dined with Russian President Vladimir Putin. The DIA letter states:

“DIA did not locate any records referring or relating to LTG Flynn’s receipt of money from a foreign source. … DIA did not locate any records of LTG Flynn seeking permission or approval for the receipt of money from a foreign source.”

Flynn’s attorney issued the following statement on Tuesday:

“As has previously been reported, General Flynn briefed the Defense Intelligence Agency, a component agency of the Department of Defense, extensively regarding the RT speaking event trip both before and after the trip, and he answered any questions that were posed by DIA concerning the trip during those briefings.”
In other words, regardless of whether Flynn discussed his trip to Moscow with DIA, the Committee has obtained no evidence that he disclosed the payments he received from the Kremlin-backed propaganda outlet RT or that he obtained permission from the Secretary of the Army and the Secretary of State, as required.

The new DIA letter also confirms that the Pentagon warned Flynn explicitly when he retired in 2014 not to accept payments from foreign government sources without obtaining advance approval:

“LTG Flynn was advised of the legal restrictions concerning foreign compensation and instructed to report any potential receipt of compensation in advance.”
In another development, on April 11, 2017, the Inspector General of the Department of Defense sent a letter informing the Oversight Committee that it has now launched its own investigation:

“This office has initiated an investigation to determine whether Lieutenant General (LTG) Flynn, U.S. Army (Retired) failed to obtain required approval prior to receiving any emolument from a foreign government.”

The White House is still refusing to provide even a single document as part of the Committee’s investigation and has refused to comply with the bipartisan document request sent by Chairman Jason Chaffetz and Ranking Member Cummings on March 22, 2017.

How will the Yellen Fed recover from this humiliation? They’ve been hiking into a maelstrom — reducing the money supply at a time when the economy is literally in shambles.

Prove me wrong.

The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.2 percent on April 27, down from 0.5 percent on April 18. The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday’s annual retail trade revision by the U.S. Census Bureau. The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning’s advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau. The forecast of real equipment investment growth increased from 5.5 percent to 6.6 percent after the durable manufacturing report and the incorporation of previously published data on light truck sales to businesses from the U.S. Bureau of Economic Analysis

The sages over at JP Morgan have cut estimate too, down to 0.3%

We now believe that real GDP increased 0.3% saar in 1Q. This incorporates the various source data that were released this morning as well as a correction to our treatment of the annual revision to the retail sales data that was released yesterday. The updated details of our forecast are in the table below.

In terms of the retail sales data, it appears that this year the BEA will not incorporate the updated figures until the May GDP report, so this Friday’s GDP release will be based on an older vintage of retail sales data. Reverting to the older data, we think Friday’s GDP report will show real consumption at 0.9% saar.

Turning to today’s reports, the flurry of information was a negative for 1Q growth on net, mainly through the inventory components. Wholesale inventories declined 0.1% in March, retail inventories increased 0.4%, and durable manufacturing inventories ticked up 0.1%. These figures continued what has been a weak run for much of the inventory data, and we now think that the real change in inventories in 1Q will actually be negative (at -$2bn saar). This very weak inventory figure expected for 1Q should be a positive development for 2Q growth, but we hold our 2Q growth forecast at 3.0% saar.

Separately, the nominal goods balance widened from -$63.9bn to -$64.8bn in March, with declines in both exports (-1.7%) and imports (-0.7%) during the month. This was slightly less widening in the deficit than we had been expecting for the month and it looks like net exports will be a small positive for growth in 1Q. However, the trade report did have some negative implications for equipment spending, and we now think that real equipment spending increased 5.2% saar in 1Q despite a modest upside surprise on the core capital goods shipments data that were also released today. Core capital goods orders and shipments have both been trending higher lately, with the latest figures showing core orders up 0.2% in both February and March and core shipments up 0.4% in March after a 1.1% gain in February.

Two things come to mind when viewing this forecasts.

1. How can Janet Yellen and her cadre of losers look in the mirror after learning that they were hiking into a potential recession?
2. What will Trump do to up the ratings of this bad show?

We all know the President loves high ratings. I am certain a recession is worse than death for him, form a PR standpoint. He will have none of it and will raze North Korea to the ground in order to avoid being canceled in 2020.

God I love Disney. I know the Pirates of the Caribbean ride is nothing special, filled with animatronic. But, for some reason, I love it.

That attraction got kicked up a notch yesterday after Johnny Depp made a surprise visit to the park and replaced filled in for his robot self.

How cool is this?

#Repost @thedisneylandtwins
???
It's not everyday that you come to Disneyland and see Johnny Depp as jack sparrow in the pirates attraction pic.twitter.com/4619jHdkq9

— DisneyLifestylers (@DLifestylers) April 27, 2017

The company guided down a little bit, $13 million and change, causing the stock to get decapitated by 40%. This is the best job in the world.

Oh, both the CEO and CFO are stepping down — effective immediately. Talk about red flags. Both of those assholes said they were leaving to ‘pursue other interests.’ In all of my years doing this, I’ve never seen a CEO and CFO resign on the same day, effective immediately, just because they wanted to head out golfing. There is something horribly wrong here.

Synchronoss Tech CEO & CFO step down, co expects Q1 revenue to be $13-14 mln less than prior guidance (shares halted) (24.62)

The co announced that company founder and Chairman of the Board of Directors Stephen Waldis will return to the role of Chief Executive Officer, effective immediately. Ronald Hovsepian, who previously served as Chief Executive Officer, will be leaving to pursue other interests. Mr. Hovsepian will serve as a consultant to the company to ensure a seamless transition. Synchronoss also announced that Lawrence Irving has been named Chief Financial Officer. Mr. Irving served as CFO for Synchronoss from July 2001 until April 2014 and played a crucial role in the company’s development during that time. John Frederick, who served as Chief Financial Officer prior to Mr. Irving’s appointment, will be leaving to pursue other interests.

Based on preliminary financial information, Synchronoss expects total revenue for the first quarter of 2017 to be $13 million to $14 million less than the company’s previously announced guidance. Operating margins are expected to be 8% to 10%, which are less than previously announced guidance.

Prior Q1 guidance was for revs of $173-$178 mln (Current Capital IQ Consensus Estimate: $175.73 mln)

So what in the world is going on here?

On March 27th, 2017, Roddy Boyd from SIRF issued a report, warning investors of this eventuality.

Boyd seems to think there are accounting irregularities taking place.

The releasing of the 2016 10-K was hardly the first time Synchronoss’ investors have been force-fed some baffling disclosures about the cloud services unit’s economic health: Opaque transactions in the fourth quarter of 2015 as well as in the last moments of the third quarter of 2016 have made virtually no economic sense.

Synchronoss is an aggressive acquirer of other companies and business lines, and with the sales from these purchased businesses folded into its own totals, showing growth is easy.

Sounds like Worldcomm.

The stock is lower by 40%.

NOTE: According to recent filings, Colorado based Elk Creek Partners owns a chunk and is their largest reported holding.

This isn’t really anything new out of ‘secular’ China. But it demonstrates the scumitude of an authoritarian communist regime. Marxism is only a mode to centralize power. Once consolidated, it corrupts the government and disconnects them from the people they rule over.

In this instance, China wants to do away with the ‘Arabization’ of their muslim districts, in the Xinjiang region. To accomplish this, they’ve ordered officials to bring the people in line with traditional Han chinese culture, which entails banning the following names.

Muhammad, Jihad, Islam, Imam, Hajj, Turknaz, Azhar, Wahhabi, Saddam, Arafat, Medina, Cairo.

There are approximately 10 million Uighurs in the region, a Turkic sunni people. A communist party chief said the region had been radicalized, resulting in ‘hundreds of lives’ being lost. As such, they’re taking measure to eliminate the core issue: religion.

Prepare to get lit up again, Trumpfags. After yesterday’s catastrophic decline of 26% in X, investors in the steel sector, many of which are long due to Trump, are about to get lit up again — because CLF just reported a worse than expected quarter.

The company has been reducing debt, so their long term viability looks plausible now. However, the business hasn’t picked up to match the enthusiasm exhibited in the shares.

Reports Q1 (Mar) earnings of $0.16 per share, excluding a $72 mln, or $0.27 per share, loss on extinguishment/restructuring of debt attributable to the liability management activities, $0.04 worse than the Capital IQ Consensus of $0.20; revenues rose 51.1% year/year to $461.6 mln vs the $412.71 mln Capital IQ Consensus

Total debt at the end of the first quarter of 2017 was $1.6 bln, ~$900 mln lower than $2.5 bln total debt at the end of the prior-year quarter
U.S. Iron Ore pellet sales volume in the first quarter of 2017 was 3.1 mln long tons, a 63% increase when compared to the first quarter of 2016 as a result of increased customer demand
As Cliffs’ management previously guided, first-quarter revenues per ton of $79.35 decreased by 5 percent compared to the prior-year quarter.

The decrease is a result of carryover pricing impacts from both 2015 and 2016, and changes in customer mix. The majority of tons sold in the first quarter are from products shipped under the prior-year contract pricing. Contracts that have been priced based on 2017 pricing have been favorable to prior year due to higher benchmark iron ore and hot-rolled coil steel pricing
Asia-Pacific: First-quarter 2017 Asia Pacific Iron Ore sales volume increased 9% to 3.0 mln metric tons, from 2.8 mln metric tons in the first quarter of 2016. The volume increase was primarily related to the timing of shipments

Outlook:
Based on the assumption that iron ore and steel prices will average for the remainder of 2017 their respective April month-to-date averages, Cliffs expects to generate ~$380 mln of net income and $700 mln of adjusted EBITDA for the full-year 2017

This new outlook incorporates revised assumptions around Asia Pacific Iron Ore revenue realizations, which are impacted by the lower IODEX price, larger iron ore content discounts, and lower lump premiums

U.S. Iron Ore Outlook (Long Tons):

Cliffs full-year sales and production volumes expectation is unchanged at ~19 mln long tons. Cliffs’ full-year 2017 U.S. Iron Ore cash cost of goods sold and operating expense2 expectation is unchanged at $55 – $60 per long ton

Asia Pacific Iron Ore Outlook (Metric Tons, F.O.B. the port):

Cliffs’ full-year 2017 Asia Pacific Iron Ore expected sales and production volume is unchanged at ~11.5 mln tons. The product mix is expected to contain 50 percent lump ore and 50 percent fines

My take: the quarter wasn’t all bad. The stock is up 85% over the past 12 months, but lower by 14% for 2017. We’re definitely seeing stronger numbers out of China and hopefully the Trump plans to stoke growth will come to fruition, which would certainly help the stock price in steel and steel related names. The stock is indicating lower by 5%. I wouldn’t buy today. It’s probably a buy sometime next week.

No one expected anything out of this company. Better than expected margins were the driver here, down 70bps, which was better than the 100bps estimate that the Wall Street gurus has expected. Revenues are plodding along and revenues fucking soared in Asia. But the bottom line is, this stock is so fucking hated right now, with the shares in the dumpster, it was ripe for a reversion to the mean.

The fact that margins came in a little better than expected tells you that pricing power is improving and the business is starting to recover.

Reports Q1 (Mar) loss of $0.01 per share, $0.03 better than the Capital IQ Consensus of ($0.04); revenues rose 6.7% year/year to $1.12 bln vs the $1.11 bln Capital IQ Consensus. North American revenue declined 1 percent as new distribution was more than offset by the absence of business lost to bankruptcies in 2016. International revenue, which is comprised of our EMEA, Asia-Pacific, and Latin America regions, represented 20 percent of total revenue in the quarter, and was up 52 percent (up 57 percent currency neutral). By region, revenue was up 55 percent in EMEA, 60 percent in Asia-Pacific and 30 percent in Latin America. Apparel revenue increased 7 percent to $715 million including strength in training, golf, and team sports. Footwear revenue grew 2 percent to $270 million, against last year’s same period which was up 64 percent due to significant strength in basketball sales and the timing of liquidations. Accessories revenue increased 12 percent to $89 million with strength in men’s training, running, youth, and global football.

Gross margin was down 70 basis points (vs. 100 bps guidance) to 45.2 percent as benefits from channel and product mix were offset by continued efforts to manage inventories appropriate to market demand.

Co reaffirms guidance for FY17, sees FY17 revs +11-12% to nearly $5.4 bln vs. $5.35 bln Capital IQ Consensus. Gross margin expected to be slightly down compared to 46.4% in 2016 with benefits in product costs being offset by changes in foreign currency and shifts in overall sales mix, as the footwear and international businesses continue to outpace the growth of the higher margin apparel and North American businesses; Operating income expected to reach ~$320 million.

Shares of $UAA are down 32% for 2017 — but indicating higher by more than 10% this morning.

No surprises out of the ECB. They’re due to stop the madness in December of 2017, and then beginning hiking in April of 2018 — based off market odds.

Instant reaction as ECB keeps its policy settings unchanged https://t.co/NZRYmzD2Ba pic.twitter.com/dv9rj0tcX9

— Bloomberg (@business) April 27, 2017

Markets see 1st #ECB hike at end-Apr 2018 meeting. Looks a bit too hawkish as Praet, Constancio & Co. have been clear: QE first, then rates. pic.twitter.com/bHs2aCKQsR

— Holger Zschaepitz (@Schuldensuehner) April 27, 2017

Separately, WTI is getting hammered, off by 2%. I wouldn’t base this move off the inventory numbers. The fact of the matter is, crude has been weak and ebbing lower for months now. Perhaps we need a flush out to price in a hard bottom.

Dow futures are +33.

This earnings report is literally useless. The trading business continues to struggle. The media is fascinated with the announcement that the company might move 4,000 jobs out of Great Britain because of BREXIT. The real reason has less to do with BREXIT and more to do with the bank losing market share — because they suck.

Bear in mind, I am long the stock.

Litigation costs were estimated to come in at 336m euros, but they only took a 31m euro charge.

Income before taxes rose 52% year-on-year to €878m, net income up 143% to €575m — but they missed on revenues.

“I am pleased with the start we have made to 2017. Client engagement is strong, asset flows are returning across the bank and activity is picking up. Our cost-cutting efforts are starting to pay off, while we have reduced complexity significantly. We have laid firm foundations upon which Deutsche Bank can once again deliver good results.”

Here’s Bloomberg’s take.