European Banks Explode Higher on Italian ‘Bad Bank’ Fund

Italian stocks, led by banks, are surging today on news that a ‘bad bank’ fund will be established and launched as early as Monday.

Here are the to gainers in the eurostoxx 50 now.

While this plan has been known for sometime now, it’s launch date was always in question. The fact that this Italian fund might be ready as early as Monday, investors are using that element of surprise to their advantage by roasting short sellers on the spigot.

Dow futures are up 85.

The boozehounds over at Moody’s concocted a number, seemingly while intoxicated, suggesting that under a dire scenario, banks would only need $9 billion to get back up to snuff with capital requirements.

“Yes, the sector is troubled,” said David Fanger, a Moody’s senior vice president and author of the report. “It will generate losses. But it’s not so large that it will blow a hole in the banks’ assets.”

With close to $400 billion in distressed oil and gas loans and recovery rates at just 20%, my instincts tell me this $9 billion number can grow should a ‘severe’ scenario materialize.

Is this even relevant? As I watched this, I thought to myself  ‘gee, this guy is somewhat dimwitted and lacks energy’ (extra Trump). He’s not telling me anything worthwhile, but maybe it will help some clown out there who thinks the fucking world is a giant rainbow with unicorns committing acts of fellatio on it.

It’s mid-evening, so I figured now was the time to attempt to scare you, in order to deprive you of sleep. I understand a great many of you are long stocks, myself included. With that in mind, have a look at this (extra Large Marge)!

To put that chart into actual numbers, here are the returns of the HYG v the XLF. Notice how wide that divergence is year to date.

That’s almost a 10% differential! You people are smoking large bags of heroin if you think buying some dumbfuck oil pipeline company is a better investment than JPM or GS.

A reckoning is coming.

Julian Emanuel is an Executive Director (ooh, fancy title) at UBS, which means that he thinks he knows more about everything, stemming from stocks to cocks, because he works on the VIX line all day long. At any rate, I entered into this video with an open mind and left feeling unfulfilled. He’s calling for a higher VIX. He cites the disconnect between GDP expectations and the stock market run. Correctly, he highlighted the failure of central bank overplanning (you can steal that too), yet only calls for the S&P to dive lower to 1,970–a mere 60 points or so from current levels.

In addition to that, he said markets will trade up by year end.

Wrong. The S&P will eclipse 1,970 in a single day, then proceed to throw people like Julian into fucking wooden barrels over the edge of Niagra Falls.

Moreover and inexorably so, equities will trade sharply lower by year end, much lower than most people ever thought was possible.

Do not be fooled by the Clinton position against the BlackLivesMatter vagrants. This is a calculated plan to curry the favor of moderate to right leaning democrats and white males. Upwards of 75% of black Americans will vote for Hillary, even if she gave her speeches in Klansman garb. Nonetheless, I found this exquisitely entertaining.

BONUS ROUND: Shots fired at Obama…again.

The man manages $95 billion, was inspired to become a money manager living in a hovel while watching Lifestyles of the Rich and Famous, and has outperformed 99% of his peers.

What the fuck have you done lately?

“The negative interest rate experiment seems to be backfiring,” said Gundlach, who helps oversee $95 billion for Los Angeles-based DoubleLine. “The best evidence of negative interest rates backfiring is the yen versus the dollar and the Nikkei.”

The dollar was last down 1.4 percent at 108.01, its biggest daily percentage drop in two months. The decline put the greenback’s losses at about 10 percent for the year.
Gundlach said: “Negative interest rates are not just deflationary, they are deflation. You lose money.”

NASH drugs are the next blockbusters and ICPT is at the forefront of the science.

In my opinion, this company gets acquired within the year.

FDA approval means a sharply higher open for ICPT tomorrow.

The FDA’s Gastrointestinal Drugs Advisory Committee votes 17-0 backing approval of Intercept Pharmaceuticals’ (ICPT) obeticholic acid (OCA) for the treatment of primary biliary cirrhosis (PBA), accepting the use of the liver enzyme alkaline phosphatase (ALP) as a surrogate endpoint.

French drug maker, Genfit (GNFTF) should get some sympathy love, and maybe GALT.

The Statue of Liberty weeps for our heinous losses.

Truth of the matter is, today’s move merely negated yesterday’s gains. On the bright side, oil was marginally lower and the dollar is weakening on a daily basis–a net positive for our global exporting bastards.

Additionally, today felt like a head fake lower. You’ll know the move is the real deal when you see actual centaurs on the NYSE, kicking traders in the chest.

The one doomful development is the rapid appreciation of treasuries. Yields at back down to the lows. The market is calling bullshit on the reflation story. Should this persist, I can almost guarantee you the broader indices will drop to the February lows in a matter of weeks.

It’s amazing how a tweet can create shareholder value, almost instantaneously, yet the company who domiciles the platform is unable to make money or create shareholder value for their shareholders.

Charles Gasparino just tweeted that Valeant might unload its Bausch and Lomb unit, something that should attract many bidders.

The stock is spiking on the news. I’d switch over to Fox Business to see his report, but that would entail getting up and finding the remote–simply not worth the effort.