BEHOLD THE IDES OF MARCH

Since I have a downward bent to my stock market bias, I felt it was incumbent upon me to provide you with some ideas to toss into the flaming barrel of garbage, while relishing in its pungent smells of perfidy.

These stocks perform miserably during March, a month that is known for outperformance and the beginning of the idiot American tradition known as ‘the driving season.’ It’s also host to both Drunken Irish day and Easter this year, something that is considered by some to be a dark omen that will precede the very end of the world that Jesus fought so hard to avoid from happening.

These stocks suck in March.

(stock, percentage of times down in March, percentage loss)

JKS 80% -12.1%
YOKU 80% -11%
RDCM 76% -8.9%
CF 80% -3.6%
VC 80% -3.2%
IPGP 77% -2.66%
QLIK 80% -2.48%
INXN 80% -2.2%
SIL 80% -6.1%
EGPT 100% -4.8%
FXY 77% -0.97%
DBA 77% -3.18%
CYNA 100% -15%

It’s worth noting that the SPY has risen in 69% of time in March, dating back to 1993. Moreover, last year was the first down march since it fell by 0.8% in 2008. It is, inherently, a very strong month for equity markets, one that has lulled many investors to sleep, prepping them for the sharp contrast to come in June, which has wreaked havoc upon portfolios, with regularity, dating back to the Tontine Coffee days.

The ark, normally, is an ill performer in March. As you know, it’s a very rare occasion for the ark to be anchored in port for repairs.

The media is doing a great job of not reporting on the wholesale invasion of ancient european countries by savages. They are depicted as poor women and children in search of succor by most in the media. The truth is a lot more insidious than any of them want to believe. These are belligerent military aged men, who aren’t respecting the traditions or laws of the nations they’re seeking refuge in.

I do believe as the warmer climes prevail over this part of the world, the migrant issue will become an unsustainable deleterious drag on the Greek economy, forcing them to finally exit the Euro, or threaten to do so in the most serious of ways.

This is a demographic altering invasion that will change the face of Europe forever.

What sort of horseshit is this? Cramer is out again with his voodoo charts, suggesting if the market should indeed trade higher tomorrow, even by the most meaningless of ways, then henceforth we shall soar to new highs, summarily ignoring all fundamental concerns.

While a rally may indeed be in the cards, I find it very childish to rally around the idea that tomorrow’s trading session holds the skeleton keys to the fate of global equity markets. As the market moves higher, accordingly, the news flow will become exceedingly bullish. The same could be said for when markets drop. As such, the noise is loudest by people talking their books at these important inflection points.

Until this time, the opinions of a certain James Cramer, have hitherto been of the ursine varietal–regularly running about the earth warning others of an impending doom. BEHOLD his metamorphosis from mouth foaming mad bear into a red faced steaming bull.

Things have gone from bad to worse at the embattled drug-scam company, now under SEC investigation. I would expect nothing less from a Canadian based company, home of the Blacked Berry and Nortel Network.

Their statement goes as follows:

In response to media inquiries, Valeant confirmed that it has several ongoing investigations, including investigations by the US Attorney’s Offices for Massachusetts and the Southern District of New York, the SEC, and Congress. With respect to the SEC investigation the Company confirmed that it received a subpoena from the SEC in the fourth quarter of 2015 and, in the normal course, would have included this disclosure in its 2015 10-K. We do not have further detail to provide at this time

In other words, they’re fucked.

Speaking of which, no word on how this affects Cowboy Bill Ackman’s year to date boondoggle. Word around the street is that its been quite onerous, on numerous fronts.

Aside from Broadway Bill, Valuact, Sequoia and Paulson are fervent and zestful bagholders of the Michael Pearson’s playhouse of smoke and mirrors.

If this fucking thing crashed into my car, I’d take a crowbar to it and destroy it, from soup to nuts.

The car, a Lexus sports utility vehicle, hit the left side of a public transit bus as it was attempting to avoid some sand bags on a road in Mountain View, California. The automobile had a test driver, who saw the bus approaching in the mirror but “believed the bus would stop or slow to allow the Google AV to continue,” according to an accident report filed with the state’s Department of Motor Vehicles.

Google is betting that its efforts will lead to a future when a large number of cars on the road will drive themselves, and has been testing autonomous vehicles on streets near its headquarters for the past few years. The company acknowledged that the technology still needs work. The incident with the bus happened because the car’s software also predicted the bus behind it would yield so it could merge back into traffic.

“We can imagine the bus driver assumed we were going to stay put,” Google wrote in its February monthly report on self-driving cars, which Bloomberg obtained. “Unfortunately, all these assumptions led us to the same spot in the lane at the same time. This type of misunderstanding happens between human drivers on the road every day.”

I can’t wait for these things to start littering the rush hour lanes.

It looked like the market wanted to rally a bit, then the dust storms settled upon Wall, and investors began to choke on their own bullshit.

At the same time, Pershing Square is being dismantled, with VRX taken to the woodshed, off by 16%. That equates to a $190 million loss for the old Gotham manager.

Separately, government bonds continue to outperform.

I am short of complacency in global terms. Save yourselves from heinous sized losses. Board the ark.

In spite of the indices up a little, there is significant buying in many risk assets today, stemming from oil to high valued restaurants.

Shares of SHAK are on the move higher today, as well as members of my TWDFM (these will definitely fuck me) stocks.

Taking a look at the broader market, one could easily see there’s interest to buy.

The bulk of the selling is ripping apart both the biotech and banking sectors, with a keen focus on the shares of VRX, whose decline is shattering both the hopes and dreams of many prominent hedge fund managers.

Aside from risk oriented stocks, both bonds and utilities are climbing too. I suppose there is a divergence of sorts taking place today amongst asset allocators. Either way, the market looks strong and should build upon recent gains.

Citi is trying to scare people with this note, pointing to an eerily quiet primary bond market and a total disastrous high yield market, one that has seen a 75% drawdown in issuances.

With $570 billion in maturities scheduled to get refinanced by year end, Citi is fatalistically ominous when it comes to the lack of activity in the best rated credits. Moreover, they declare the ‘no go’ credit shutdown days, over the past 12 months, exceeds that which was endured during the financial crisis of 2009.

“It’s the increased irregularity of the new issue flows that’s concerning, particularly since we may have something on the order of $570 billion of maturities to get refinanced by year-end,” write Citi analysts led by Stephen Antczak. “Throw in the M&A pipeline, and it’s a large number to push through a stop-and-go primary market.”

Indeed, by Citi’s calculations the market for significant new investment-grade deals saw 75 “no go” days over the past 12 months, in which the primary market was essentially shut. That’s a higher rolling 12-month figure than was seen during the depths of the financial crisis in 2008 to 2009.

Citi concludes in the most bearish of ways:

“The second factor is the weakening fundamental backdrop—more leverage, falling profits, downgrades, etc.,” the analysts say. “We’ve seen volatility in recent years that didn’t result in as sharp a rise in no-go days thanks to a healthier fundamental backdrop, or at least [a] more supportive Fed[eral Reserve]. But in the current environment, we really don’t have an offsetting factor to volatility.”

“Given that volatility has ebbed in recent trading, it’s important to monitor how broadly the primary markets open,” Citi concludes.

Brace yourselves for contagion.

I have no idea what this man is talking about. Tom Porcelli, chief economist from RBC, is out with a note saying if the Fed is truly data dependent it will hikes rates in March.

Heretofore, the Fed had a dual mandate, targeting full employment and an inflation rate of 2%. While we’ve accomplished the former, we are still miserably below inflation targets. Moreover, and it goes without saying, all recent turmoil in financial markets are suggestive of further deflationary pressures.

Nonetheless, Porcelli believes the environment is more than ripe for a series of hikes.

He closes his rant suggesting that inaction by the Fed in March means they’ve ceded to the will of markets, fearful of the commodity collapse and its subsequent maladies.

“For all of the effort the Fed has put into communicating to markets that monetary policy decisions are data dependent, a no move at the March meeting (our base case) will prove the exact opposite,” wrote Chief U.S. Economist Tom Porcelli.

“Note that a Fed forecast for core PCE prices to hit 1.6 percent by the end of 2016 and for the unemployment rate to be at 4.7 percent was justification enough to usher in a baseline view of four rates hikes this year,” wrote Porcelli, referencing the projections monetary policymakers made in December. “Not only has the trajectory toward those explicit goals not changed, it has accelerated!”

“A no hike in March reaffirms that monetary policy remains less about U.S. domestic realities and more about the perceived risks from the commodity price collapse and broad global malaise,” the economist wrote.

The man has amassed a net worth in excess of $70 billion through the purchase of stocks. There is little point in asking him if he likes them now, since his bias is obviously skewed to the upside.

Nevertheless, old man Buffett did cast aspersions on stock picking and reiterated his belief that index funds are the preferable method by which investors should approach the market, alluding to his will and how his wife will be 90% in index funds, 10% government bonds.

When asked about the drop in crude, he said it was a bullish event for consumers. However, the prices realized at the pump take time to resonate with the average Joe dressed in a gorilla suit.

Asked whether he’s concerned about the stock swoon, Buffett said “not that much” has changed from his viewpoint in the past five months or so because he’s a more aggressive buyer of stocks when the market is going down.

“We’re almost always a buyer of stocks,” he said. “It’s hard to think about many months when we weren’t a net buyer of stocks.”
Buffett reiterated his mantra that it’s “crazy” to time the market. “In 10 or 20 or 30 years, I think stocks will be a lot higher then they are now.”

“It’s what I tell me wife to do in my will,” he continued. She’s going to be 90 percent in an index fund. And 10 percent in governments.”

Giving investors an idea of his commitment to the market, he said he bought stocks after the Sept. 11 terrorist attacks, and after the 1987 stock market crash. “The country is not going to go away,” he said. “The country will grow in value over time.”
The billionaire investor said he bets on American business doing well over the long term, though he acknowledged that businesses have been “a bit softer” than they were four to five months ago.

Buffett said low oil prices “without a doubt” are good for consumers, but the benefits at the gas pumps come very slowly, while the capital values in the American oil patch go away immediately.