China’s Banking System is a Lit Powder Keg

Stick around and it’ll blow your arms and legs clean off.

Here’s an old article from January of this year.

Okay, you read it right? Bad loans are soaring in China, amidst the sharpest economic slowdown in 25 years.

Now watch this.

You tell me how this ends.

The noose is swinging from the gibbet waiting for a neck to wrap itself around.

Bezos is everything Tim Cook wished he was, sans the bald head and proclivity to procreate with the opposite sex.

Amazon absolutely crushed numbers. Did I mention that the Amazon Echo is, by far, my favorite electronic device?

Reports Q1 (Mar) earnings of $1.07 per share, $0.47 better than the Capital IQ Consensus of $0.60; revenues rose 28.2% year/year to $29.13 bln vs. $28.0 bln consensus; operating income $1.1 bln vs. ests of ~$545 mln and $100-700 mln guidance.

NA operating income +131% to $588 mln; net slaes +27% to $17 bln
AWS operating income +210% to $604 mln; sales +64% to $2.6 bln.

Co issues in-line guidance for Q, sees Q revs of 28.0-30.5 bln vs. $28.34 bln Capital IQ Consensus; operating income of $375-975 mln vs ~$850 mln estimate.

AMZN is higher by 12% in the after-hours, within range of new highs. That’s just plain crazy.

This is a big deal, unless of course Uncle Carl has gone senile. Last I checked, he was still winning in HLF, however.

Nevertheless, Icahn exiting Apple, the world’s largest company, is the same as saying he’s getting out of tech. If big money managers are exiting tech, which constitutes 23% of the S&P 500, the market isn’t going higher from here.

“We no longer have a position in Apple,” Icahn told CNBC. Icahn sold most of his remaining stake in February, he said. “I got out because I’m worried about China.”

Icahn perceives a risk in Apple’s relationship with China and that made his already profitable investment in the company no longer a “no-brainer,” he said. China shut down Apple’s iTunes Movies and iBooks services recently, showing that the company is no longer immune to the reach of Beijing regulators.

“You worry a little bit, and maybe more than a little, about China’s attitude,” Icahn said. Apple has a good relationship with China, providing vast employment there, but also relies on the country for lots of sales, he said.

“We have this huge profit so by definition it’s not the no-brainer it was — but two — if China was basically steady I would probably go back into” Apple, which he reiterated he viewed as a great company with great management. “I hope one day to get back into it.”

This is distribution. The market has topped during late April. I wonder who said this would happen, almost to the exact day.

Stocks are, for lack of a better term, plunging lower. We are seeing losses strewn out, across the board, in a most heinous fashion. For the better part of the past two month’s homosexual giraffe’s have been running this market higher, based on the theory that men could indeed urinate, standing up, in the ladies room, and that QE would save the day, and that oil was bottoming, etc, etc, etc.

All of that was wrong, AND MORE.

Earnings have been an abomination. The very thing that is supposed to fuel stocks higher, will indeed crush them back to the February lows, and even lower.

TLT is trading higher again, now up more than 9% for 2016, by far the best performing asset class worth allocating into.

Dark, dark, even grim, days lie ahead. Brace yourselves for the storm to come.

NOTE: The iBankCoin Bootcamp schedule has been posted. I hope to see you all there.

I feel like the Devil on here, always prognosticating doom. But the voices inside of my head tell me to say these things.

Pardon the lack of news on the site today. There was a lot of things to cover, such as J. Boehner calling Rafael Cruz ‘Lucifer in the Flesh’ and what not. But I’ve been a little busy dealing with some things, which have–inexorably– led to this.

Say, for example, someone put a shotgun to my head, demanding to know where I thought the markets would be by X-mas. Although reticent to work under such undue pressures, finally, I’d succumb and offer my advice. Without question, I’d say we’d be 30% lower from where we are today. See, that’s the statement of a madman, one steeped with bedlam, from a man wholly interested in seeing everything rip from its roots.

This is all true, but for good and just reasons.

Markets will knife lower. When it does, you will all flock to these halls hoping for a ride on my ark, at which point I will hit you with my solid oak oars and tell you to be gone.

Back to reality, the SPY is lower by 0.35% and the whole centaur on the NYSE dream of mine is nothing more than fantasy.

To dream is to live, is it not?

Boy have I missed out on one heck of a run. Then again, I was burnt the fuck out, like a frozen waffle left in the oven at 500 degrees for 2 hours. I’ve been trading these stupid stocks my whole life, ever since I was 10. When I was a teenager, I took some money that was given to me through a lawsuit and started to make my mark.

I became a stock broker, made buckets of coin, became cynical and jaded, made an egregious error in 2014, then burnt out. That pretty sums up my career, one that I do not look back upon as an experience worth my time.

Writing this blog, creating stuff in Exodus, banning readers, ranting and raving, that’s what I was born to do.

I WAS BORN TO RANT AND RAVE.

Stocks do not want lower today. The clowns are out in full force, sashaying around in the wrong bathrooms, buying the wrong stocks, for all the wrong reasons.

There is going to be a brutal sort of hell to pay for all of this perfidy. When it happens, you’ll be able to find me on the ark. I’m always on that thing, watching the waves and examining cloud formations.

He said it, not me.

Scott Minerd from Guggenheim said it’s time to nibble on the ark. Now is a good time to buy treasuries, following their pullback.

“It is impossible to get the timing of anything exactly right. You have to ask yourself, ‘Are you a speculator or an investor?'” Minerd said in an interview in New York.
“We are investors and we believe it is a pretty good period to start nibbling on Treasuries.”

I’m not gonna say a single bad thing about Scott. That guy looks like he could punch a hole through a cinder block. But, I will say this: Scott, one does not nibble on the ark. One takes starvation mode chunks out it and prays for salvation.

The morons at the NY Fed had forecaste upwards of 1% growth, no? Jar my memory.

It looks like the Atlanta Fed’s GDPNow models worked, only missing by a tenth of one percent.

*ECONOMY IN U.S. GREW 0.5% IN FIRST QUARTER VS 0.7% FORECAST

Spin it however you like: these are abysmal numbers (thunderous lightning strikes spire atop castle).

Dow futs are lower by 133.

Abbot is buying St. Jude Medical for $25 billion. STJ is higher by 25% in the pre market.

More interestingly, ABBV is buying privately held Stemcentrx for $5.8 billion. Stemcentrx is a Peter Thiel backed company. That man had signed a deal with the devil, which explains his wanton success.

Stemcentrx, a closely held biotech firm based in South San Francisco, California, has five experimental drugs in human trials. The leading candidate is for small cell lung cancer, targeted at a protein called DLL3 that is expressed in 80 percent of small cell lung cancer patients’ tumors and not in healthy tissue, according to a statement on Thursday. Patients are enrolling in a final-stage test of the company’s lead drug, called Rova-T, which could be on the market by 2018 if approved, Chief Executive Officer Rick Gonzalez said.

“We have dedicated ourselves to oncology and we view it as our second major growth platform,” he said in a telephone interview. “Stemcentrx in particular fits well as a major platform play for us in solid tumors.”

Lastly, MDVN received a bid from SNY for $9.3 billion, a modest 8% premium to yesterday’s close. I am almost certain the primadonnas at MDVN will ask for moar.

I won’t make too much out of these deals, as the healthcare industry is rife with misdirection and convoluted motives. But the investment bankers must be glad to see activity.

Don’t worry, we’ll be up by 9:45am.

The Bank of Japan didn’t provide markets with additional crack-cocaine. Subsequently, investors are throwing infantile tantrums, selling off the NIKKEI and U.S. futures.

The yen is soaring v the dollar up by 2%. The NIKKEI had been higher by 2%, but is now off by 2.5%. S&P futures are down 10.

Poor Japan will have to make due with a paltry budget of just 80 fucking trillion yen, to buy up excess ETF supply.