Saturday Cinema with Le Fly: Top Hat

Vix futures got you feeling down? The contango in crude ruined your day? Did the dollar/yen cross remove you from your life savings?

Watch Top Hat, starring the indomitable Fred Astaire and Ginger Rogers, and I promise you’ll be feeling a lot better by the end of the film.

This is a song and dance movie. I am a fan of Fred’s work, but didn’t expect to enjoy a movie of this genre. I was wrong. It was delightful.

As an aside, watch a 71 year old Fred cut loose at the 1970’s Oscars.

Fred was the man.

Forget about Trump v Clinton. The British Empire’s fate stands in the balance. The corrupt finaglers from Brussels are doing everything they can to prevent England from declaring independence from the EU. They want their fish, their banks, and their people. Markets are going to be EXTREMELY volatile next week. There is a better than average chance that some of you reading this will perish under the brush fires of catastrophic consequences.

The Swiss National Bank is the worst actor in the negative interest rate dilemma, mainly because of their balance sheet success. Because everyone else, save Germany, is an abomination in Europe, whenever things get dicey, people flee to the swissy. In the past, this has put a pervasive and unsustainable pressure on the Swiss banks to deter this from happening. Thus, we are seeing them prepare now, ahead of Thursday’s vote.

“This is an event that is possible, and the probability increased in the last few days, but the base scenario that we have does not include the Brexit,” President Thomas Jordan told reporters in Bern after the central bank kept interest rates unchanged. Nevertheless, “turbulences could arise, and we intend to stabilize the market in case such a situation arises.”

The SNB held its deposit rate at minus 0.75 percent on Thursday, as forecast by economists in a Bloomberg survey. It also reiterated its threat to wage currency-market interventions if needed, saying the franc remained significantly overvalued.

“Fundamentally, we have room to maneuver on these two instruments,” Jordan said. “In a first phase, should the situation arise, it will be about stepping in to markets in a stabilizing manner to prevent exaggerations.”

“We will have a full team that will be following developments as they unfold,” Governing Board member Andrea Maechler said. “We will be following developments very closely. We have a global view, we follow markets on a 24-hour basis.”

“In case of Brexit we expect markets to test 1.05 francs per euro — a level that we expect the SNB to defend fiercely,” said Karsten Junius, chief economist at Bank J Safra Sarasin in Zurich.

Economists surveyed by Bloomberg predict interventions will probably be the SNB’s first line of defense to rein in any currency strengthening. Some also expect a cut to the deposit rate, already at a record low.

Jordan last admitted to currency purchases at the height of the Greek debt crisis a year ago. The SNB has some 600 billion francs ($626 billion) of foreign-currency reserves, a sum almost equal to the economy’s annual output. Growth slowed to 0.9 percent last year due to the strong franc.

In spite of the success of the SNB, their banks are in dire straights. Both Credit Suisse and UBS are trading all record lows. No one is safe. Hide the kids and the husbands.

The last time Exodus flagged oversold was on March the 23rd, 2016. Although rare, I do believe the algorithms are behaving as they should. Markets have, for the most part, done nothing for the past month or so. We’ve seen some weakness in multiple sectors, but not anything that is overly concerning.

But if there’s one thing that I’ve learned since creating this amazing market tool is to be wary of periods of calm, for they always lead to tumult. Over the past two weeks, the algorithms have pointed to overbought conditions in both semis and Asian equities. Today, they are saying to short Brazil and to go short the British pound.

Markets tried to rally today, but the heft and the weight of the selling was a burden too much to bear. With shares of Apple and Google in the penalty box and a sundry of near term events that pose a threat to market stability, investors opted out of today’s rat race.

The bull case, of course, lies with a rejection of the BREXIT referendum, which should spur a feverish rally in European banks. That rally should spill over into our markets and a short squeeze might occur. But the overall sentiment that negative rates have imprinted on markets is one that will not be lifted any time soon. I am somewhat sanguine on the new Fed position, backing away from hiking. However, the way those lunatics talk, at the first sign of economic stability or growth, they might resume the ‘live meeting’ and ‘three more hikes for ’16’ jargon again.

Who knows?

In a world filled with smoke and mirrors and clowns running about splashing cream pies into the faces of investors, this much is, indelibly, clear.

We are entering a period of stagnation. Earnings growth is nil to negative. Valuations are excessive. The main source of liquidity is provided by central banks. Eventually, the fundamentals will matter. Either productivity is set to explode and valuations will grow into their oversized boots, or a lot of jobs are about to be lost and GDP estimates are about to coming tumbling down.

NOTE: Big news coming to members of 12631 soon. Stay tuned.

When I read this Bloomberg report I wanted to punch a hole through my wall. Earlier this morning, the 126 year institution, dubbed ‘The Wall Street Journal’, went head to head with some fucktard tech reporter on CNBC, dubbed ‘Josh Lipton.’

The WSJ reported that China had suspended the sale of the iPhone 6 because it was too similar to an existing Chinese phone, who had already stole IP from Apple. The stock was hit and everyone was pissed off. Then, some asshole from CNBC, threw cold water on the story, claiming that his ‘sources’, who are obviously nobody, said the story was bogus. CNBC spiked the story and everyone took to Twitter to talk shit about the venerable WSJ.

Lo and behold, once again, the Journal was right.

Beijing’s Intellectual Property Office said the iPhone 6 and iPhone 6 Plus infringe on patent rights held by the company Shenzhen Baili because of similarities to its 100C phone, according to its ruling Friday. China’s largest smartphone makers, by unit shipments, were Huawei Technologies Co., Oppo and Vivo in the first quarter, with Lenovo Group Ltd. and Xiaomi Corp. close behind, according to research firm International Data Corporation.

While the decision covers only Beijing, future lawsuits against Apple could take the case as a precedent, potentially influencing the outcomes of litigation elsewhere in China. Baili is one of scores of smartphone brands trying to cash in on the country’s mobile boom. Xu Guoxiang, the inventor who holds the patent and listed as a Baili representative on yellow-pages site czvv.com, did not answer calls seeking comment.

“IPhone 6 and iPhone 6 Plus as well as iPhone 6s, iPhone 6s Plus and iPhone SE models are all available for sale today in China,” Apple spokeswoman Kristin Huguet said in an e-mailed statement. “We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court.”

Tim Long, an analyst at BMO Capital Markets in New York, said he doesn’t think the Chinese ruling is meaningful for Apple.

“We believe there have been several prior cases against U.S. companies ruled in favor of local companies by lower courts that were later overturned by higher courts,” Long wrote in a note to clients. “We have seen dozens of court decisions banning different smartphone products over the years in many different countries. We are not aware of one ever that has resulted in an actual injunction.”

I promised to toss Lipton onto the Catherine Wheel in the city square if his story was bogus. That is exactly what I am about to do right now.

I don’t think this was a case of Mozilo greasing the right skids or your standard oligarch gets out of jail free card situation, as the 77 year old holds very little sway over the establishment elite. The Justice Department didn’t have a case, frankly. Alas, this chapter of the tanned man comes to an end.

U.S. prosecutors have abandoned their case against Angelo Mozilo, a pioneer of the risky subprime mortgages that fueled the financial crisis, after a two-year quest to bring a civil suit against him.

The Justice Department sent a letter informing Mozilo, the co-founder of Countrywide Financial Corp., that it isn’t moving ahead with any action against him, according to people familiar with the matter. That effectively ends nearly a decade of U.S. scrutiny of a man who became a face of risky lending practices and later an emblem of the government’s mixed success in holding individuals accountable.

In recent years, the 77-year-old has been living in a 12,692-square-foot house in Santa Barbara, California, investing in real estate and writing a book about his life so his grandchildren will “know the truth.” Interviewed in late 2014, shortly after news of prosecutors’ civil pursuit became public, he denied any wrongdoing and said the national real-estate collapse, not Countrywide’s lending, was at the root of the crisis.
“Countrywide or Mozilo didn’t cause any of that,” he said at the time.

I can’t wait to read his book of filth and lies, about how innocent they all were at Countrywide, which was penned from his 12,000 sq ft fortress in Santa Barbara.

Lord Jeffrey Gundlach, Bond King, said the Fed gained credibility by not raising rates–coming to grips with reality. Moreover, as he points out so eloquently, the market has done dick since QE ended in 2014, more than 18 months ago. As for the astute imbeciles at the ECB, they’ve bargained with the devil and lost. Their negative interest rate policies have been disastrous for their markets.

I challenge any one of you to debate the Bond King on this issue.

This is unbelievable. Who the hell are these 51 people in the state department that want to start world war 3, over fucking Syria?

Let me do the math.

Assad is fighting ISIS.

The United States was supporting the removal of Assad, effectively supporting ISIS, up until it became politically toxic.

NATO, via Turkey, has been helping ISIS, buying their oil.

Turkey shot down a Russian warplane, without provocation.

Russia intervened on behalf of Assad to push back ISIS and was successful in achieving their stated goals. Russia, in addition to taking out military personnel, wreaked havoc on the ISIS oil gravy train, something we didn’t do ‘for environmental reasons’.

We got very mad at Russia for intervening and cock blocking us.

Now we want to ATTACK Assad, who is allied with Putin.

Fuck this.

More than 50 State Department diplomats have signed an internal memo critical of U.S. policy in Syria, calling for military strikes against President Bashar al-Assad’s government to stop its persistent violations of a civil war ceasefire.

The “dissent channel cable” was signed by 51 mid- to high-level State Department officers advising on Syria policy.

It calls for “targeted military strikes” against the Syrian government in light of the near-collapse of the ceasefire brokered earlier this year, the Wall Street Journal reported, citing copies of the cable it had seen.

U.S. Secretary of State John Kerry, visiting Copenhagen, told Reuters on Friday: “It’s an important statement and I respect the process, very, very much. I will … have a chance to meet with people when I get back (to Washington).”

He said he had not seen the memo.

Military strikes against the Assad government would represent a major change in the Obama administration’s policy of not intervening directly in the Syrian civil war, while calling for a political transition that would see Assad leave power.

Such strikes would put the United States on a collision course with Russia, which is backing Assad with air strikes, equipment, training and military advice.

In Moscow, Kremlin spokesman Dmitry Peskov said he had only seen media reports about the memo, but said: “Calls for the violent overthrow of authorities in another country are unlikely to be accepted in Moscow.

“The liquidation of this or some other regime is hardly what is needed to aid the successful continuation of the battle against terrorism. Such a move is capable of plunging the region into complete chaos.”

What’s the goal here? This is wreckless diplomacy of an unbelievable brand of stupidity, rare and astounding to bear witness to.

Davidson is tossing extreme shade on a stock, which has, hitherto, enjoyed fantastic gains in 2016. To translate what they’re saying, in the clearest of terms: they don’t get it.

This company is offal and only one outcome is likely. Such an outcome is indelibly grim, especially from current levels.

DA Davidson wants you to sell.

Emerge Energy Services: Living on a prayer, starting to only see binary outcomes – DA Davidson

DA Davidson notes EMES’ stock price has increased over 200% since reporting horrendous 1Q16 results (lowest utilization across coverage universe) and confirming a covenant breach under its revolving credit facility. At that time, we still saw the light and expected cost reductions and a quick fuel segment sale to enable an amendment to its credit agreement, with enough liquidity to weather the downturn. Today they’re less sanguine about the fuel business fetching a meaningful sale price or the outlook for a company with the highest cost structure in our coverage universe being able to compete in a low cost “secular” sand demand environment. We reiterate our underweight rating and their $5 target based on a 2018 EV/EBITDA multiple of 8x. Their multiple is toward the low end of EMES’ historical range but it still might be optimistic given growing uncertainty in our estimates and increasing expectations for binary outcomes for EMES.

The stock is ignoring this hit piece today.

I just threw a fit, like a 5 year old, over a WSJ report that said China was banning the sale of iPhone 6’s because it was too similar to iPhone rip offs.

Now CNBC’s Josh Lipton is reporting that the story is untrue. If Lipton is wrong and the WSJ is correct, rumor has it that Lipton will be taken to the city square, whereby he’ll be fixed to the Catherine Wheel and beaten until his bones turn to dust.

Enough is enough already, with this fucking country and their stealing. That’s what you get Apple for having the murderous pigs at FOXCONN do your manufacturing.

A. They steal and resell your technology and manufacturing process.

B. The Chinese government then declares the company that ripped you off is the rightful inventor of the technology, because they don’t give a shit about your IP.

Intellectual property regulators in Beijing barred Apple from selling models of the iPhone 6 and 6 Plus in the city, citing strong similarity to an existing Chinese phone, The Wall Street Journal reported.

Apple has the option to appeal the regulatory ruling to a higher court, WSJ said, but some stores stopped selling the phones months ago and are switching to newer models. Apple will soon end production of both of the banned iPhone 6 models, a person familiar with the production plans told the Journal.
The regulator’s decision is another speed bump for Apple in its largest market outside of the U.S., The Journal said.

Struggling iPhone sales in the country were a major factor in the tech giant’s first quarterly decline in more than a decade this April.

China also shut down Apple’s iBooks and iTunes movies service in April, as regulators said the company did not have the appropriate licenses, people familiar with the matter told the Journal.

Shares of Apple are selling off on this news. If Tim Cook had any balls at all, he’d move manufacturing out of China. Oh, no word on whether China is going to shut down APPLE STORE REPLICAS in their dog eating, piracy filled, nation of liars and thieves.

Did that come across strong enough?

UPDATE: CNBC’s Josh Lipton is out with a source report who says the WSJ story is bullshit.