Yellen Serves Up More BS: GAMEOVER

In her testimony today, she still thinks inflation is going to 2%. She was surprised by the drop in oil and rise in the dollar. And, she believes the economy is strong.

Most importantly, she explicitly stated that the Fed would keep an eye on things, but didn’t want to rule out more rate hikes. She said they’d discuss it during the March meeting.

Investors didn’t want to hear more bullshit.

Gold is higher by 4.5%. Crude is plummeting through the fucking floor boards. Stocks are off by 300. And the ark is crowded with all sorts of animals and humans; TLT is up more than $2.

Look at some of these gold winners in Exodus today.

News just broke that BA is under scrutiny from the SEC for its Dreamliner accounting. My guess, this is a shakedown. It will likely be settled and done with inside 6 mos.

But this is the wrong day for this type of news to hit. Shares are getting gut punched.

Being that BA is a Dow component, it just tacked on a new layer of hurt to the indexes.

Yellen testimony is the sane as yesterday. She’s leaving door wide open for March rate hike. Too funny.

There’s some bullshit story out about an oil production freeze, concocted by the beggars in Venezuela. The story is going mainstream and they even tie the House of Saud in with it. As a result, oil is bouncing and so are stocks.

I really liked the open, with stocks delving into the lower bands of sanity and then recoiling from the fires of hell. This is precisely what bottoms look like.

Now we need Yellen is grow a fucking beard and step up her Fed chief game. Ever since she’s been chief, markets have been miserable. I vividly remember saying stocks should be sold when Bernanke left his post at the Fed. That call ended up being right.

I’ll make another call for you here. Janet Yellen will go down as the single worst Fed Chair in history.

Moving on. I had a whole post lined up, pointing to Bill Ackman’s positions getting clobbered today. But then I felt like a bully, so I scrapped it. It’s very easy to demonize guys like Bill, treat them as sub humans and have a good belly laugh at their displeasure. But that’s not who I am, really. If I saw Bill in the subways, I’d place a $5 bill in his coffee cup to help him out. I’m done discussing the trials and tribulations of a Mr. William Albert Ackman. I wish him the best of luck.

My current position is 50% SPY, 25% TLT, 25% cash.

Grab an Exodus free trial now. I’ll be ending access to them tomorrow.

In my favorite segment of CNBC, the 8:55 spot when Jim Cramer let’s loose before his show begins, he said Yellen was relying on ridiculous 1976 economics– when pointing to the labor market and being completely and utterly blind to the world blowing up around her.

He is, however, perplexed as to how the U.S. got lumped in with all of the other pieces of shit economies of the world. I suppose Jim believes America is special, completely immune to the contagion that is spreading like cancer in a DuPont chemical facility.

Just a few more percent lower and Jim is going to go completely ape on the Fed. I can’t wait.

Regarding Yellen: In a 2005 speech in San Francisco, Yellen argued against deflating the housing bubble because “arguments against trying to deflate a bubble outweigh those in favor of it” and predicted that the housing bubble “could be large enough to feel like a good-sized bump in the road, but the economy would likely be able to absorb the shock.” In July, the Senate Banking Committee voted 17 to 6 to confirm her, though the top Republican on the panel, Senator Richard C. Shelby of Alabama, voted no, saying he believed Yellen had an “inflationary bias”.

Congratulations Janet Yellen for reserving a special seat in hell. You’ve managed to undo all of the good your predecessor built with Wall Street and completely abandon the Federal Reserve’s place in western finance, as protector of capital, creator of wealth. Like a villain, you’ve turned the Fed into an evil organization whose sole purpose is to destroy lives and capital and the American way.

The FTSE MIB is leading the charge lower, down 5.2%, at the vanguard of Europe’s crash. Italian banks are getting hammered.

WTI crude is down more than 4% to $26.26 and gold is soaring, up 3.5%.

Over in Germany, Deutsche Bank is down 8.5% and Commerzbank -6%.

In the UK, Barclay’s is off by 6%.

In France, Socgen is down 12%.

In Switzerland, Credit Suisse is down 7%.

You get my drift.

S&P futures are lower by 300, all thanks to Janet Yellen’s absurd and childish insistence to hold the line on interest rate hikes.

Bonds are racing higher, with TLT up $2 in the pre-market.

Oh, and the PIGS sovereign yields are blowing out v the rest of Europe, especially in Portugal and Italy.

Portuguese-German spreads now 399 bps.

European indices are down 3%+ and U.S futs are off by 320, setting up for a most horrendous trading day.

French stocks are the hardest hit, with the CAC off by more than 4%, thanks to banks getting smashed–particularly Socgen–which is off by 10%.

Deutsche Bank is sharply lower and all Italian banks. Essentially, the oil crisis has shifted to the banks.

That’s called contagion.

On the upside is gold, higher by 2% and bonds.

This is getting repetitive. Thank heavens for our robust labor market. Let’s see how much longer that will last with wealth being destroyed at the current rate.

Oh, crude is trading in the $26s now, off by 3% or so. Who’s counting anymore?

Worst of all is the unraveling of the yen carry. Look at the spike in the yen.

Tremendous pain out there.

Credit Suisse’s CIO, John Woods, responded to Kyle Bass’s bearish case for Chinese collapse, suggesting the Chinese NPLs pales in comparison to what occurred 15 yrs ago and how the government may need to nationalize debt and write some of it down to deal with the situation. Clearly, the pace at which the Chinese government is drawing down their FX reserves, down from $4 trillion to $3.1 trillion over the past 12 months, they cannot bail everyone out.

Credit Suisse believes they’ll need to devalue the yuan, significantly, down to $6.80-$7.00, to better deal with the looming debt kerfuffle they find themselves in.

Current CNY/USD cross stands at $6.57.

This is why I hate politics. These primaries are a complete fraud, especially on the asinine democratic side (irony abounds!).

Get this, despite Sanders crushing Clinton in New Hampshire, she received more delegates, thanks to her friends there who are ‘super delegates’.

This reminds me of the book Animal Farm, where all animals were equal, but some more equal than others. The people from NH and every state that goes out to vote for Sanders will be ignored by Hillary’s friends, who are super delegates and are not required to follow the will of the people.

Bernie Sanders defeated Hillary Clinton in New Hampshire’s primary with 60 percent of the vote, but that’s not the end of the story. Because of a peculiarity in the Democratic Party’s nominating system, Clinton will likely receive more delegates from the state.
New Hampshire has 24 pledged delegates that are assigned based on the proportion of the popular vote received. Sanders received 60 percent of support in New Hampshire’s Democratic primary, giving him 15 pledged delegates. Hillary Clinton received 38 percent of the votes, putting her pledged delegate count at nine.

This seems simple enough, but Democratic National Committee’s method of assigning delegates complicates the matter. There are eight “superdelegates,” party officials that are free to support any candidate they please – even if that support does not align with the wishes of voters. Six of those superdelegates have committed to Clinton, giving her a total of 15 delegates from New Hampshire as of Wednesday afternoon. The two remaining superdelegates have not committed for either candidate yet.

Clinton had a razor-thin victory in Iowa followed up by a crushing defeat in New Hampshire, putting her pledged delegated of 32 behind Sanders’s 36. However, Clinton has an imposing lead over Sanders thanks to her 45-to-1 superdelegate advantage. She now has 431 delegates of all types supporting her, while Sanders only has 52, according to CNN.

There are 712 superdelegates in the DNC primaries. A Democratic presidential candidate needs 2,383 delegates of any type out of the 4,763 total to win the nomination.

Hillary has a 45-1 super delegate advantage, giving her 431 delegates to Bernie’s 52. She’s a lock for the nomination and the voting hasn’t even begun yet.

Everything is going to hell this evening. You name the sordid correlation and it is going wrong.

Japanese Yen are soaring again.

German bonds, as well as all western bonds of the distinguished nature, including my 30 yr treasury ark, are rallying. More importantly, weaker euro nations are diverging from the stronger, once again. Portuguese-German 10 yr spreads are now 330bps.

Risk off assets are the rage. Hence, Peter Schiff’s fav, gold, is ripping.

Crude lower, naturally. That’s a $26 handle, Cullen Frost. Go rework your stress tests.

Welcome back Hang Seng! We missed you these past few days.

US futures are lower, by 14 NASDAQS. DAX futures are off by 1.5%.

Good evening.

Who can blame him for losing 19% during the past 20 days of trading, in his $10 billion+ hedged-less hedge fund, aside from his clients of course? This coming off a down 20% 2015 places Bill ‘let’s cycle to Montauk and back’ Ackman at the very top of the very worst performing high profile managers.

At the crux of his problems is the concentrated nature of his holdings.

According to recent filings, just 8 positions comprise the bulk of his assets, aside from his HLF short, which is another large bet.

Bill is the kamikaze of billionaire hedge fund managers. Bernie Sanders would be appalled.

Since last reported, Pershing is down nearly $300 million in PAH, $200 million in QSR and a staggering $1.8 billion in VRX.

APD is his only green position in 2016, aside from his HLF short–which is down 18%.