Obligatory Note: Happy 50th Birthday Bill Ackman

May you live forever (extra King Leonides).

Hey smile, VRX is up (happy face).

But so is HLF (sad face).

In a scathing indictment of the Fed’s zero interest rate policy, Dallas Fed President, Richard Fisher said the Fed’s policies are hammering bank margins and pose a significant risk to the insurance industry, who rely upon treasuries to finance their chicanery.

Shockingly candid.

The companies Fisher said he’s most worried about are insurers.
“Insurance companies, particularly life companies, are like noble oxen. They pull the cart forward steadily forever and ever and ever. They’re living in a 1 percent world in this country, but they’re pulling a 3-to-6 percent liability cart. It doesn’t square,” he told CNBC’s “Squawk Box.”
Low interest rates are a major risk for insurers because the income they derive from investments — mostly in safe assets like Treasurys — may be insufficient to fund payouts to customers in low-rate environments.

Fisher said Fed policymakers did not anticipate the scope of easy money’s impact on the financial sector.

“Bank’s interest margins are being hammered. Money-market funds are trying to squeeze out a return. This is the kind of stuff, to be honest, sitting at the table, we did not foresee at the FOMC,” he said, referring to the Federal Open Market Committee.

Fisher is a hawk and wants the Fed to hike and then hike some more.

KKR managed to convince management at HCA to buy back $800 million of stock from them, in one fell swoop, for the extreme discount of 1%.

08:35 | HCA | (80.93)
HCA to repurchase 9,360,958 shares of its common stock beneficially owned by affiliates of Kohlberg Kravis Roberts & Co. at $80.12/share

The Share Repurchase was made pursuant to the Company’s existing $3.0 billion repurchase program adopted by the Company’s board of directors in October 2015. After giving effect to the Share Repurchase, a total of $2.09 billion of share repurchases will have been effectuated under the program.

Michael Michelson, a general partner at KKR, in addition to being on the HCA board, without question, agrees with this move. Ever since Hercules was created, an entity that combined several PE firms, including KKR and Bain Capital, to acquire HCA and then bring them public again in 2011, they’ve been using shareholder money at HCA to liquidate their position.

Considering the fact that the stock has nearly tripled since then, thus far, the buybacks have been a great investment for the company. Then again, I’m not sure if share buybacks would’ve been the best use of capital over the given time frame, a period of great profit for hospital operators.

Nevertheless, the chrony capitalism continues at HCA, a denizen of Senator Bill Frist.

The good news is that Macy’s is firing thousands of meaningless employees, fodder, which will save $400 million in the intermediate term. The bad news is the company has spent upwards of $7 billion on share buybacks since 2011, with another $2 billion remaining, and have lost money on almost every single transaction since.

Oh, and by the way, business sucks…because the mall is dead.

“We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook,” Terry J. Lundgren, Macy’s chairman and chief executive officer, said in a statement. “Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy’s and Bloomingdale’s are key destinations, as well as a slowdown in some center core categories — further intensifying the challenges associated with growing topline sales revenue.”

08:01 | M
Macy’s sees 2016 EPS of $3.15-3.40 vs $3.80-3.90 prior guidance and $3.78 consensus and top-line sales expected to remain below initial expectations

Oh, don’t worry about the dividend. In spite of the fact that business is undeniably impaired, along with pursuing a share buyback frenzy, the company has once again hiked the dividend.

The business of Macy’s is not to sell goods to the consumer, after all. It is to sell their stock to the investor.

Paul Singer and his $28 billion from Elliott Management thinks the rally is gold is just beginning. Then again, he’s been saying that shit since 2013 and has been kicked down his billionaire steps every year since.

Nevertheless, I’d rather listen to the man at the helm of $28 billion than some fuckhead jerking off to charts on Twitter.

“It makes a great deal of sense to own gold. Other investors may be finally starting to agree,” Singer wrote in an April 28 letter to clients. “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies. If confidence in their judgment continues to weaken, the effect on gold could be very powerful. We believe the March quarter’s price action could represent something closer to the beginning of such a move than to the end.”

Historically, Elliott is a very conservative hedge fund, one that actually hedges positions. His returns are expected to come in at around 12% per annum, Bernard Madoff style, enabling him to keep the flow of fees coming in perpetuity so that he could continue his true passion of breaking down bathroom barriers for men with mammaries and women with testicles.

Gold is the best performing asset class of 2016, with many stocks posting triple digit returns thus far.

The merger of two losers has failed. The depository for school supplies and office kitsch from the 1990’s must remain compeitive, according to the catamites at the FTC.

In a statement issued by Staples this evening, the company reiterated their focus on recapturing the antiquated ink toner and paper markets. These statements of business focus and initiative are so unbelievable, I am shocked that the FTC didn’t let these two morons merge and fail together.

‘We are extremely disappointed that the FTC’s request for preliminary injunction was granted despite the fact that it failed to define the relevant market correctly, and fell woefully short of proving its case. We believe that it is in the best interest of our shareholders, customers, and associates to forego appealing this decision, terminate the merger agreement, and move on with our strategic plan to drive shareholder value. We are positioning Staples for the future by reshaping our business, while increasing our focus on mid-market customers in North America and categories beyond office supplies.’
The company announced a strategic plan to enhance long-term value including the following actions:

The company is focused on increasing its share of wallet with existing customers and acquiring new customers. The company is increasing its offering of products and services beyond office supplies. Staples also plans to pursue market share gains in core categories like office supplies, ink, toner and paper. To support its growth plans, the company will invest in lower prices and improved supply chain capabilities and add more than 1,000 associates to its mid-market sales force. Staples will also pursue acquisitions of business-to-business service providers and companies specializing in categories beyond office supplies to build scale and credibility and accelerate growth in these areas.”

Staples will incur a $250 million break up fee and will buy back up to $100 million in stock. Is it me, or has the regulatory environment become toxic and prohibitive for mergers?

Shares of SPLS are plunging by 10% in the after-hours and ODP has been buried, off by 26%.

Bossman, J. Burbank, hailing from Passport Capital, issued a letter this afternoon which predicted a ‘repositioning’ of sorts and the beginning of a ‘liquidation’ that is bound to leave a mark.

“For both it will be a normal ending after decades of extending their booms,” Burbank said in the letter obtained by Bloomberg. “We think this is a time full of peril and repositioning that heralds either the start of a new market reality (i.e. inflation and too much liquidity) or the beginning of the liquidation.”

Then he gets into some heady stuff and puts the whole audience to sleep.

“The Fed policy response now seems to be a function of global growth concerns rather than domestic considerations,” Burbank said. “This essentially brings forth a period of global monetary policy convergence rather than the anticipated divergence.”

There will be “substantial” opportunities to make money once the “massive dose of central bank anesthesia wears off financial markets,” he said, adding that the dollar will resume rising “once markets embrace the fundamental truth of the consequences of divergent monetary policies.”

He really does walk around in that fucking fleece vest all day long, like a stereotype of some asshole hedge fund trader. I am especially delighted to post this ‘news’ on a day when the market buried the bears from whence they came.

Shares of Disney are plunging lower by 6% in the after-hours, following a tragic earnings report. All in all, the numbers weren’t all that bad.

The ESPN division posted solid results.

The increase at ESPN was due to the benefit of lower programming costs and higher affiliate revenues, partially offset by a decrease in advertising revenue. Results for the quarter benefited from the timing of our fiscal quarter end relative to when College Football Playoff (CFP) bowl games were played, which resulted in a decrease in programming costs and advertising revenue. One CFP game was aired in the current quarter, whereas seven CFP games were aired in the second quarter of the prior year. Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers. Lower advertising revenue was due to lower ratings and rates, which were negatively impacted by the timing of CFP bowl games, partially offset by higher units sold.

Nevertheless, markets do not like these numbers.

The Walt Disney Company (DIS) today reported quarterly earnings of $2.1 billion for its second fiscal quarter ended April 2, 2016, an increase of $35 million over the prior-year quarter. Diluted earnings per share (EPS) for the quarter increased 6% to $1.30 from $1.23 in the prior-year quarter. Excluding certain items affecting comparability(1), EPS for the quarter increased 11% to $1.36. EPS for the six months ended April 2, 2016 increased 22% to $3.04 from $2.50 in the prior-year period. Excluding certain items affecting comparability(1), EPS for the six months increased 20%.

“We’re very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS,” said Robert A. Iger, chairman and chief executive officer, The Walt Disney Company. “Our Studio’s unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value. Looking forward, we are thrilled with the Studio’s slate and tremendously excited about the June 16th grand opening of the spectacular Shanghai Disney Resort.”

Walt Disney prelim Q2 $1.36 vs $1.40 Capital IQ Consensus Estimate; revs $12.97 bln vs $13.20 bln Capital IQ Consensus Estimate

I have no strong opinions on DIS, other than it’s a component of the Dow, so I hate it.

Look at this warning.

Fossil sees Q2 $0.00-0.15 vs $0.58 Capital IQ Consensus Estimate; sees revs decreasing 5.0-1.5% y/y

I am sure the mall is just resting and not dead, per se. Nevertheless, companies like FOSL are going to have to start selling marijuana if they’re to survive this generational shift away from cheap, sub-standard, watches. Kids these days merely look at the time on top of their Netflix app to determine whether or not they’ll check up on their friends over at Snapchatville. The demand for items produced at Fossil are all but nonexistent.

In the first quarter of fiscal 2016, reported worldwide net sales decreased 9.0% or $65.3 million driven by a decline in the Company’s multi-brand licensed watch portfolio and the negative impact of changes in foreign currency. The following table provides a summary of net sales performance compared to the first quarter of fiscal year 2015.

The Company reported net income for the first quarter of fiscal 2016 of $5.8 million compared to $38.1 million for the first quarter of fiscal 2015. Diluted earnings per share were $0.12, compared to $0.75 for the first quarter of fiscal 2015.

“We continue to advance our digital and omni-channel initiatives and enhance our CRM capabilities; efforts we believe will position us to drive future growth as our customer continues to evolve and change the way they shop and engage with brands. Our team is making great progress toward integrating the Misfit technology and platform across our portfolio of brands and we anticipate launching new wearable products in eight brands later this year. We remain confident in our strategies and continue to believe the advantages of our global operating platform with distribution in 150 countries, powerful brands and now, the technology and resources to lead in wearables, will enable us to improve our long-term sales growth and profitability.”

Shares are down 22% in the after hours.

Hereinafter, the value of your greenback shall increase in value, says the sages around the harkness table at Goldman.

The dollar is down 6% over the past 6 months, in spite of the fact that both European and Japanese central banks have enacted a negative interest rate policy. If you try to wrap your head around the whole thing, with the Fed in a tightening mode, your head may very well explode.

Just know this now, things are going to get inexorably better for dollar bulls–according to Goldman of course.

“We remain dollar bullish and think the trajectory is higher from here,” Robin Brooks, Goldman Sachs’s New York-based chief currency strategist, said in an interview with Bloomberg Radio. “The reaction on Friday to a meaningfully weaker-than-expected payrolls was telling: We had a disappointing jobs number and the dollar actually bounced.”

Goldman Sachs estimates that the dollar will advance 15 percent during the next two years as U.S. monetary policy normalizes, Brooks said in a report Tuesday. This isn’t the first time the bank has reiterated its dollar-bullish stance in recent months, a view that hasn’t always panned out. Goldman Sachs closed a dollar position against a equally weighted basket of euro and yen in February, one of its top trade recommendations for 2016, with a potential loss of about 5 percent.

That’s right, Brooks is calling for a 15% move in the dollar over the next two years. I am sure he concocted this prophecy while unconscious, under the heavy influence of opiates.