Monday, December 5, 2016
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
14,837 Blog Posts

Morgan Stanley to Encourage Advisors to Leave Firm for Higher Payouts


Morgan Stanley announced they’ll be changing their payout grid in 2017 — upping the level of production needed to attain the utterly ridiculous 32% commission share they’ve pulled out of their fucking asses.

As of now, a broker at Morgan Stanley needs to produce $220,000 in gross commissions — in order to retain a slap in the face — or 32% of what they produced. But in 2017, that same piker broker, albeit hard working and poor as shit, will need to produce $242,000.

Here is how the numbers work in the real world.

$220,000 at 32% payout = $70,400

But wait, there’s more!

From that $220k, one could assume a sundry of fees to be levied upon them. For the sake of brevity, let’s assume Morgan dings them around $1,000 per mo. Now you’re making $60,400 per annum.

At 25% Federal tax bracket, 5% state tax, social security, medicare, the low end Morgan Stanley broker will make around $38,000 take home per annum, or $3,200 per mo. That is poverty, literally.

Why in the world would anyone stay at Morgan when you could easily go independent and receive a 90% payout? Bear in mind, at an indie firm brokers will be under a 1099 schedule and will be able to write off many expenses — thereby lowering their tax burdens.

Alas, if you’re part of the elite club at Morgan, doing $5m or more in production per annum, you’ll still receive a payout ranging from 51.5% to 55.5%. Plus, you’ll get invited to annual golf matches and get to rub elbows with all of the wonderful C level execs at the firm.

These wirehouses are plantations for aspiring brokers and advisors. Avoid them like the plague.

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Italian Banks Collapse; Markets Shrug it Off and Jog On Towards Record Highs


If I told you a year ago that markets would soar after the U.K. would vote to leave the EU, the debt strapped Italy would vote to fire Renzi and pave the way to potentially exit the EU, and Trump would win the election on an anti China platform, you’d tell me to fuck off. Well, following yesterday’s Italian referendum and subsequent collapse of the entire Italian bank, that’s precisely what’s happening today.

Let’s draw some distinctions, shall we?



And…markets are at new highs.


Italian 10yr is ripping higher, up 13bps to 2.037%. In bizaaro world, spiking borrrowing costs for highly indebted nations is good news. Bankruptcy is so trendy.


In short, because Trump is such a friend to China, and inflation is such a threat, and the economy is doing so well, sharply higher interest rates is good for stocks. It transcends everything, even the potential collapse of Italy’s banking system and their exit from the EU.

To be clear, all that matters is global growth is somehow back with a vengeance.

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Bill Ackman is Back: Pershing Square Posts 10% Gain in November


Bill Ackman is a billionaire for a reason. While most of you mere millionaire spartan types struggle to keep up with the Joneses, Montauk Bill is constructing giant buildings and acquiring $100 million apartments as a matter of leisure and ‘fun.’

He takes gigantic positions in soon to be bankrupt biotech companies and shorts the shit out of stocks that soar. But none of that matters, for Bill is blessed by the Gods to continue his quest to collect billions of dollars and to make Pershing Square great again.

Thanks to his positions in FNMA, CP, APD and QSR, Ackman enjoyed a rather effervescent lift in November, climbing by 10% — cutting his losses in half for 2016. About $500m of the gains were propelled by Fannie Mae, all thanks to Trump. Also, his HLF short plunged 19%.

Bear in mind, 6 months ago, Bill was besieged in ruin. His fund was down 25%, following a horrendous 2015 (-20.5%). To be down just 10% for the year is truly evidence of the genius of Bill, a man who needs no introduction or assistance as it pertains to the art of professional money management.

Congrats to Bill for making it back and double congrats to clients of Pershing for only losing 10% this year and just -30% over the past two.

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European Markets Celebrate Their Potential Demise


We are truly living through interesting times. Let me remind you that Exodus hasn’t flashed an oversold signal since the beginning of summer, representative of a market that doesn’t go down. Literally nothing is able to derail the bull run.

We’ve gone through BREXIT, Trump winning, Italian referendum and Trump menacing China and markets still climb to new highs.


European markets, save Italy, are rallying. Future are up and all of the risk on trimmings are in effect.


If a nuclear device detonated in NYC, stocks would trade up.

All currencies could be rendered worthless, a Black Plague could breakout and the anti christ himself could step forth and declare hell on earth to commence and stocks would still trade up.

Holiday shopping season is upon us and the mall is dead. Will that matter? Perhaps for a few individual names. Certain stocks will succumb to reality and plunge. But on the whole, I suspect we’re gonna glide into the New Year’s — right through retarded Federal Reserve hikes, and live happily ever after.


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EU Demands Facebook, Twitter, Google and Microsoft Cede to Their Anti-Hate Speech Laws


There’s so much hate out there. The EU has decided they’re going to do something about it, god damn it. All of the damned, fucking, voters running astray this year must have the autocrats going apeshit trying to figure out ways to suppress populism. As such, the EU is demanding that US tech giants comply with their demands to curtail ‘hate speech’ else be literally forced to do so — according to law. The laws are designed to protect migrants streaming into the EU, raping and pillaging along the way.

Europeans, you must comply.

source: Reuters

The European Union (EU) executive’s warning comes six months after the companies signed up to a voluntary code of conduct to take action in Europe within 24 hours, following rising concerns triggered by the refugee crisis and terror attacks.

This included removing or disabling access to the content if necessary, better cooperation with civil society organizations and the promotion of “counter-narratives” to hate speech.

Such as propaganda, like the correct the record shills? Counter-narratives.

The code of conduct is largely a continuation of efforts that the companies already take to counter hate speech on their websites, such as developing tools for people to report hateful content and training staff to handle such requests.

The EU Justice Commission wants tech companies to censor speech at a much faster pace than the current 80% after 48 hours. Permitting 20% of speech that is deemed hateful to be disseminated after 48 hours is 20% too much, according to the Commissioner Vera Jourova.

“If Facebook, YouTube, Twitter and Microsoft want to convince me and the ministers that the non-legislative approach can work, they will have to act quickly and make a strong effort in the coming months,” Jourova told the Financial Times.

Jourova’s report showed an uneven pace across the 28-country bloc, with the removal rate of racist posts in Germany and France above 50 percent, but just 11 percent in Austria and 4 percent in Italy.

Coincidentally, the Italians just told the EU to fuck off this evening, voting against the referendum. I suppose they’re all a bunch of racist bastards.

EU justice ministers will meet in Brussels to discuss the report on Thursday. They are also expected to ask the companies to clarify issues including taking down “terrorist propaganda” and helping provide evidence to convict foreign fighters.

How nice of them to also include the censorship of terrorists. Kiss your free speech goodbye Europe. The EU has gone full Soviet Union with the aim to suppress freedom of expression.

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Futures Lower, Gold Up Following Italian Referendum Defeat


Thus far, the pin action is tepid, mainly because no one takes anything seriously anymore and also because it was expected. Nasdaq futures are off by 0.7%, DAX and CAC futures are down by 0.75% and 1.06%, respectively.

On the upside, gold is surging by 0.6%, as the euro gets clobbered by 1%. This is significant because dollar strength usually means gold weakness. But in this instance, the dollar strength is more representative of risk off instead of faux hyperinflation.

Both WTI and copper are lower by about 0.7%.

In light of the referendum defeat, I think it’s important to monitor the spreads between German and Italian 10yr bonds. Right now, German yields are edging lower — while Italians are rising. The moves are not noteworthy at the moment, with spreads at 163bps.

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Trump Saber Rattles China, Heightens His Anti-Globalist Rhetoric on Twitter

FORT LAUDERDALE, FL - AUGUST 10:  Republican presidential nominee Donald Trump speaks during his campaign event at the BB&T Center on August 10, 2016 in Fort Lauderdale, Florida. Trump continued to campaign for his run for president of the United States.  (Photo by Joe Raedle/Getty Images)

At some point, the non believers will have to start learning the old fashioned way. Trump has been very transparent from day 1. If you fuck with American business or its people, he’s going to use the full powers of his office to exact a reckoning. Since the election, the mindless drones on Wall Street have taken a very bullish position on China — bidding up steel, aluminum and copper stocks without a care in the world.

If Trump is truly sincere about protecting US industry from unfair and corrupt Chinese trade practices, which entails dumping and currency manipulation, as well as unfair taxation on US goods entering the country, then this entire dream of a run will be revoked and the nightmare for the status quo will begin — in earnest.

Trump talks to the people directly, laying into China and setting a tone.

Obviously, this is in response to the media’s absurd objections to Trump accepting a phone call from the democratically elected President of Taiwan, which was deriding by the left because it might upset the apple cart of the status quo relationship with communist China. Think about that.

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Italian Referendum Exit Polls Suggest Renzi is Doomed; Prepare for #ITALEXIT


UPDATE 2: Euro extends losses, now down by 1.02%.

UPDATE: Renzi is fucked.

Early elections will likely be held and Italy’s move towards leaving the EU will begin shortly.

Italians have completed their democratic duties and the polls are now closed. Early exit polling suggests a big win for the “NO” crowd at 55%. If this is the case, the Five Star Movement shall rise, Renzi shall fall, and Merkel will tremble at the specter of an Italian exit from the EU — which will undoubtedly rock markets like GREXIT rumors to the power of 10.

Markets are responding to this news by plunging the euro — off by 0.75% v the dollar.


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Americanism Not Globalism: Trump Fires Off Salvo Against Companies Leaving America for Cheaper Labor


The experiment of globalism worked wonders for backward countries bedraggled by low wages and onerous living standards. Over the past 30 years, America’s best companies packed up and left in order to take advantage of horrendous working conditions, slave labor, and a corrupt American government who permitted this to happen without a tax consequence. At the same time, America was trained to consume — absorb massive amounts of debt, in order to fuel the engine of globalism.

At the heart of the Trump contract with America is to make an effort to bring back manufacturing jobs — in order to create a better middle class and become a more competitive exporter of goods. In order to do this, tariffs have to be applied to companies who ship goods into the country. The trade off is higher prices at Walmart and a shift away from consumerism to a slightly more austere lifestyle — doing away with a toxic shop till you drop culture for something more productive.

In an early morning tweet storm, President elect Donald Trump warned American companies not to even think about moving manufacturing overseas for cheaper labor — for there will be a reckoning in the form of 35% tariffs.

Globalism was great for equity holders, the wealthiest 2% in the country, and a slew of C-level execs who’ve moved factories out of the US, realizing huge profit windfalls who then ingratiated themselves with absurd bonuses. Everyone else has been hoodwinked with the idea that cheap shit at Walmart brimming with low-quality products was the best America had to offer — when in fact the country had been hollowed out and is now peering over the edge of a debt mountain almost too high to fathom — let alone think about paying down.

Somehow, someway, delusional Wall Street will ignore these statements and continue to make bullish bets on China.

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Democrat Strategist on CNN Said ‘We Don’t Need White People Leading Democrats Now’


When asked by two CNN shills who she thought should be the next Chair of the DNC, democrat statagist, and former Bernie Sanders spokeswoman, Symone Sanders said ‘we don’t need white people leading the democrats now.’ Instead, she felt someone of a darker persuasion should lead them, in order to best represent ‘diversity.’

Apparently, diversity doesn’t include all races — just the ones that aren’t white — according to Symone.

If you recall, Symone mocked the Trump supporter that was viciously beaten by thugs — saying ‘oh my god poor white people,’ when asked about the harrowing event.

The problem isn’t Symone. There are lots of racists pigs like her, traversing the globe spreading their demented version of hatred. The issue that I take with these comments is the platform from which she’s allotted to make them, the global network of CNN. Notice how the two cucks next to her didn’t even bother to call out her bullshit, with the flaccid male sitting there just nodding his head?

The good news is, these people are weak. Their ideas and schemes crumble very easily; because at the heart of progressive ideologies is a sickness whose columns and tenets fall one by one after just a very small amount of inspection. Populism is on the rise and the culture wars will be won by people wholly interested in freedom — rejecting the superstate and all of its trimmings. The perversion and the lies will not last the test of time and history will remember them as fleeting symbols that result when corruption intermingles with zeal — the deadliest of concoctions, which stands at the precipice, right now, of erasing the democratic party from existence.

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