Constructive on Any Near Term Destruction

As many of you know, “The Fly” is calling for the end of western finance sometime this century. For most of you who aren’t immortal, you might miss this momentous event. I, on the other hand, intend to preside over this event, fully robed and flowing, leather sandals adorned like Moses, which is forthcoming in the most earnest of ways. Moreover, I fully intend to profit from it — feeding off the blood and the accounts of those foolish enough to believe they could live so carelessly and ignore the perils of rigged markets indefinitely.

But today’s weakness is a mere pittance, a distraction from the true dangers that lurk around the bend.

Markets have broken out of their recent ranges and will most likely trend higher for the next week or so. Having algorithmic intelligence at my finger tips, in Exodus, I can tell you that shorting into hot markets is a low probability bet.

Listen to me. This isn’t the moment of truth or the time to go all in bearish. This is a farce, a ruse, to lure you into an indelible circumstance from which you will depart all the lesser. Bide your time and take a few moments to enjoy the North Eastern foliage and take heart in the fact that a great storm of epic proportions is coming and that when it comes you’ll be prepared. But for now, avoid any temptations to venture out into haphazard bear traps.

Stay aboard the ark, or in the mine, for they are impenetrable vessels, impervious to inclement conditions and deleterious winds that pose grave risks to your well being.

The ceasefire agreement was in place and the possibility of normalcy was within reach. But, according to Russian officials, the deal fell through because the U.S. wanted to keep it secret.

Then American planes bombed and killed dozens of Syrian soldiers, for the benefit of ISIS, later admitting to making a mistake. The next day Russia bombed a UN convoy that was allegedly accompanied by armed rebels. So he we are now, worse off than before.

Thank you Secretary Kerry. Top notch diplomacy efforts.

Ammar al Selmo, the head of civil defense rescue service in opposition-held Aleppo, said three of its four centers in Aleppo had been hit. “What’s happening now is annihilation in every sense of the word,” he told Reuters. “Today the bombardment is more violent, with a larger number of planes.”

Assad remains defiant, saying on Thursday he expected the conflict to “drag on” as long as it is part of a global conflict in which the groups fighting him are backed by Saudi Arabia, Qatar, Turkey and the United States.

The International Syria Support Group, including Moscow, Washington and other major powers, met on the sidelines of the annual United Nations gathering of world leaders in New York.
“We have exchanged ideas with the Russians and we plan to consult tomorrow with respect to those ideas,” Kerry said, expressing concern at the reports of the planned new Syrian offensive. “I am no less determined today than I was yesterday but I am even more frustrated.”

Maybe if we weren’t pursuing regime change policies around the world and supporting ISIS with air cover, Kerry might find his job far less beguiling.

IMPV is way up this morning, following a Bloomberg report which stated there were multiple bidders for the company and that a deal was imminent.

RBC notes Bloomberg is reporting that there could be several bidders for Imperva including CSCO, IBM and Forcepoint, which is backed by RTN and Vista Equity Partners. Each could make some sense to us as Cisco has a strategy to build out a larger security presence, IBM is the most direct competitor with Guardium and Forcepoint has been active in M&A recently with last year’s acquisition of Websense. As a reminder, the average EV/S multiple for strategic software deals is 4.4x while the average EV/S multiple for a company with 70%+ GMs (Imperva is just shy of 80%) by a strategic bidder is 6.5x. Maintain Outperform and $52 price target that reflects 4.5x EV/S on their FY/17 estimates.

If they did catch a bid, I’d expect shares of FEYE and SPLK to move higher in sympathy.

It looks like China is having troubles with spreading the risk for the eventual failure of their fucked up banking system. It’s being reported by Bloomberg that the government is set to approve CDS trading for companies, citing immense demand by market players to mitigate risk. What many people are not aware of is that China already has a CDS like system in place, called CRM. It was created in 2010 and has failed to mitigate risk miserably.

Five years into its existence, the market for credit risk mitigation (CRM) instruments — the Chinese equivalent of credit-default swaps (CDS) — remains a barren wasteland. Taking into account China’s decade-long rapid credit expansion, as well as the surge in non-performing loans and the rise in corporate bond defaults in more recent years, the failure of CRM is particularly baffling.

Indeed, when it was launched in China in late 2010, it looked like a safe bet that CRM would become a popular hedging tool in the country’s multitrillion dollar credit sector, replicating the triumphant rise of CDS in the international market in the late 1990s. Instead, the market has remained stagnant, and recently — in an effort to solve this puzzle — many pundits and CRM architects have combed through institutional, market and analytical hindrances.

The CRM market’s real bottleneck, however, may well lie in its product design.

It’s interesting to see them capitulate and adopt the CDS system, after six years of obstinate failure. Perhaps they’re merely adopting a superior system that will permit institutions to properly hedge against credit defaults. Or, maybe they foresee a whirlwind of defaults coming soon, as evidenced by the record amount of NPLs, and desire to lessen the eventual Federal burden by letting CDS trading being asap.

On the Lou Dobbs show tonight, Nigel Farage said Hillary represents a privileged, establishment, elite that have made things worse.  He then went on to say she was an ‘awful’ candidate and is the worst American presidential candidate he’s ever seen.

In part two of his rant, Farage likens the U.S. elections as a mirror image of what happened with BREXIT, warning Americans that the establishment will begin to try to instill fear and doubt in their minds, in order to sway them against voting for Trump–who clearly has the momentum.

‘Why aren’t I 50 points ahead?”

How crazy is this woman?

The new moves by the BOJ have been widely dismissed as yet another scheme in an effort to create the illusory inflation they so desperately desire. Because of the litany of failed central bank efforts by the BOJ, markets have punished them with a brutal 19% spike in the yen, effectively front running every single thing they’ve tried to do with a mocking disposition.

As usual, the chardonnay drinking analyst across Wall Street and abroad have offered nothing but acrimonious disapproval to Kuroda’s recent gambit.

Deutsche Bank: New policy equates to the end game for the BOJ. Plan will produce an ‘anchor’ for long end nominal yields and borrowing costs will go up. Moreover, he believes Yen will trade 94 v the dollar by year end. Should inflation expectations fall, credit conditions will tighten and growth will be constrained.

Macquarie: Japan’s current account surplus will ‘bedevil’ the BOJ’s flaccid attempts to create inflation. Deflation is entrenched and these new policies are fucking stupid.

Bank of America: They believe the Yen will weaken next year, but first strengthen this autumn. The retarded bank cites confusion as a contributing factor in their asshatted assessment, stating “The newly introduced 10-year yield target and quantitative target cannot coexist in a clean form.”

Credit Suisse: The Swiss banks eviscerates the BOJ plan, saying “We fear the market has trained itself to be very accepting of the BoJ’s more meager offerings and that is why it still tries to beef up the story around the efficacy of BoJ policy in terms of weakening the JPY.”

Crossborder Capital: Placing faith in the BOJ’s ability to shape the yield curve is woefully misguided and is dangerous. “In short, the new BoJ policy will distort the term structure, could strengthen the Yen and will likely underscore the need for even more fiscal support.”

Moreover, they believe central banks are unable to shape the yield curve and and equates it to “squeezing a balloon full of air in one place [it] simply pushes out the balloon somewhere else.”

As many of you know, I’ve been a big advocate of the twitter platform from day 1, having established by handle there in 2009 and used it to grow the overall traffic of iBankcoin with great success.

It’s worth noting, traffic coming into IBC is up 150% year over year from Twitter. Many of our Exodus members found us through Twitter. Purely from an operational perspective, Twitter is the single best news platform in the world. So, having said all that, how in the world are advertisers not chomping at the bit to reserve ads there?

I can only offer my personal experience there as a testimonial to the fact that the company is being managed by a bearded baboon.

RBC Capital downgraded Twitter, Inc. (NYSE: TWTR) from Sector Perform to Underperform with a price target of $14.00 (from $17.00).

Analyst Mark Mahaney commented, “This change is based on our belief that Twitter’s value proposition to advertisers could be waning, based on our recent advertiser survey data. We note that we still believe Twitter is a unique asset with a strong value proposition to core users.”

The analyst listed the following data points on TWTR from a survey of 1,100 advertising professionals:

26% of respondents plan to “significantly” or “modestly” increase their Twitter ad spend vs. 28% who intend to decrease – this is the weakest result we have seen and the first time we have seen a negative skew towards spending.

30% of our survey respondents do not allocate any budget to the Twitter platform, up from 25% in February. And the % who are committing 1%-10% (an experimental level, perhaps) of their Online market budget with Twitter decreased to 54% from 57% last time. Further, we found response rates to bigger Twitter advertising commitments (11% or greater) to be somewhat low, and decreased slightly to 16% from 17% in February and 18% last year.

Only 24% of respondents believe their ROI has improved on the platform versus 21% who think it declined (a negative move from the 29% vs. 21% split seen earlier this year)

When ranked against its peers, Twitter ranked 5th of 7 in terms of ROI to advertisers, behind Google, Facebook, YouTube and LinkedIn, but ahead of Yahoo and AOL

Mahaney’s broad concerns on TWTR are: 1) It’s not clear when/if product/UI changes can stabilize or reaccelerate User & Usage. 2) Channel checks and our last 4 surveys (and particularly our most recent referenced above) don’t provide convincing evidence that a substantial number of advertisers will commit meaningful $s to TWTR.

Without question, RBC is right. If it weren’t for the specter of an imminent buyout by a number of media conglomerates, Twitter’s share price would be appreciable lower.

This is called obsfucation. This alleged tax hike is tailor made for estates in excess of $1b, otherwise known as estates who employ capable tax attorneys who ensure their clients don’t pay taxes.

Many on the right are falling for this ruse and pointing to Clinton’s very obvious socialist beliefs. This cannot be further from the truth. Hillary is an establishment oligarch, who is supportive of the higher, enlightened, portion of our genteel society.

The revision will put a 65 percent tax rate on estates valued at $1 billion or more per couple, the Clinton campaign said Thursday.

In 2016, estate tax returns must be filed for estates valued at $5.5 million or more, according to the Internal Revenue Service. The top rate currently sits at about 40 percent, while Clinton had previously proposed an increase to 45 percent on inherited property.
Sanders, Clinton’s populist primary opponent, had previously proposed that top rate, which the Republican Party quickly criticized Thursday. Clinton’s GOP opponent Donald Trump has called for an outright elimination of the so-called “death tax,” a proposal Clinton and other critics have contended would help Trump himself.

The pair have offered contradicting visions for taxes, with Clinton promising to put a larger burden on the wealthiest Americans through a surcharge and the elimination of loopholes. Trump has touted across the board tax cuts, which could balloon the national deficit, though he has also pledged to cut some loopholes for wealthy Americans.

That article was written by Washpo, an organization that is wholly controlled by the democrat party. This policy represents a last ditch effort to galvanize her otherwise moribund supporters who don’t even bother showing up to her rallies.

Clinton is not a candidate for the people and her policies will only help defend an already entrenched elite establishment from competition.

Former Fed Chairman, Alan Greenspan, the man who brought us the housing crisis, is warning us now that the bond market is a speculative bubble. Like many in the bond bear camp, he offers very little in terms of actual catalyst to sell, other than the fact that prices have gone up.

“Whenever you have a bull market, it looks as though it is never going to turn,” Greenspan, the second-longest serving Fed chairman, said in an interview on Bloomberg Television. “This is a classic case of a peak in a speculative security.”

On the other end of the spectrum is Bill Gross, former King of Bonds. He’s suggesting it’s nearly impossible to fight central banks, especially since they have an unlimited trove of cash and can print and buy print and buy for as long as they deem fit. There aren’t any checks and balances. They simply make the rules.

“The timing of a bond bear market has certainly been delayed,” Gross said in an interview on Bloomberg Television. The BOJ’s plan “provides what I call a soft cap on Treasuries and on gilts and on bunds,” and signals limited downside in terms of price. “You can’t fight central banks.”

In other words, why sell bonds now when rates aren’t going up and the market doesn’t seem to mind either? There is clearly a flight for yield that will continue tp permeate markets. Like it or not, bonds are the main beneficiary of these orphan dollars.