Today’s Short Squeezes, Courtesy of Exodus

A slow sleepy market is the perfect occasion to lay waste to short sellers. One of the more notable breakouts is SQ, Jack Dorsey’s other publicly traded company.

On the proprietary momentum screen there are a litany of biotech stocks found, such as  ARIA, FGEN, HALO, INSY and SRPT.

Future former CEO of Apple, Tim Cook, said in a speech given today that the company would not shrink from the responsibility of protecting the data embedded in their ridiculous iPhones. He doesn’t give a shit about the government’s requests and if Hitler himself had war plans on his iPhone, circa 1940s, Apple would not be obliged to hack into it for the benefit of the allied powers.

Speaking of shrinking, Apple unveiled two smaller items that zero Americans will buy: a smaller iPhone and Ipad pro. Also, they lowered the price of the iWatch, since no one buys them. Additionally, they unveiled new bands for that caricature of a time piece.

Good day.

Markets are evidently rallying on the news of an emergency rate hike being supplanted upon the market in April. Just a few days ago, the market was slathering itself in the refuse of zero rate hikes through 2016. Then the Fed meeting revealed ‘maybe 1 or 2’, as early as June. Well, today, two Fed officials, Lockhardon and Williams, said in separate, but deliberate, speeches that a hike was possible as early as April.

If done, this would be a non-conference meeting, which could be construed as something being done posthaste and without regard for market sensitivities.

Seeing the market up, one could only imagine it enjoys this flair coming out from the Federal Reserve and looks forward to future emergency tightenings–because inflation and full employment are such pressing issues of our time.

FML.

Pearson is out; Ackman is in. The former CFO, Howard Schiller, was asked to resign from the board, but refused to do so.

What?!

Ackman isn’t sending a surrogate in to represent Pershing’s interests. He’s doing it himself, telling of the seriousness surrounding this move. For Schiller to remain on board, obstinently, one could only imagine there is some serious turmoil behind the scenes.

After 8 years, Pearson is out, hung by his own petard.

Ackman’s statement regarding the appointment:

“I am looking forward to working with the board to identify new leadership for Valeant. The company’s large scale and dominant franchises in eye care, dermatology, GI, and other therapeutic areas coupled with its extraordinarily low valuation present a spectacular opportunity for a world-class health care executive. On behalf of all shareholders, we are extremely appreciative of Valeant employees’ hard work and commitment during this challenging time for the company.”

Ack-attack should’ve went hostile from the beginning, removing the troll, Pearson, from the company immediately. Instead, he had to wait until Nagasaki befell the share price and his fund to act. Hopefully, his actions aren’t too late. I don’t know what I’d do if Montauk Bill wasn’t around Wall Street kicking up dirt, making a big old soap opera of the place.

Alarmingly, it appears the entire biotech index is now tethered to the shares of VRX.

JP Morgan’s global head of equity strategy, Steven Rees, isn’t a fan of this rally. As a matter of fact, it’s already higher than his year end target. As such, ergo, he recommends that you remove the beer bottle from your mouths and collectively sell your stocks in order to reallocate into a dividend stock buying strategy. Granted, this plot of his seems a bit convoluted and a tad hypocritical. After all, if stocks are truly overpriced, why not suggest cash?

Nevertheless, he wants everyone to know, aside from his wanton hatred for equities, he is NOT a fan of oil, especially after bargaining its nefarious way up to $40.

Oh, but he thinks earnings should get much better in the second half of the year, so you might need to ignore everything he just said.

Here we go again. Expect a litany of jargon from these Fed heads, trying to prime us to be painted red by a barrage of Federal Reserve hikes. Just the other day, Bullard suggested that low rates might be causing low inflation. Ergo, we should hike them in order to raise inflation.

The fuck?

Has it occurred to any of these brainiacs that the cause of deflation is DEBILITATING DEBT, which causes fiscal spending to be constrained and unproductive? Just a theory of mine.

Lacker in Paris today:

“The recent data on inflation – because they have come in firmer than expected – suggests that upside risks to inflation have increased maybe not significantly, but I think noticeably and materially,” Lacker said at a central banking conference at the Bank of France in Paris.

“We need to take that into consideration,” he said, adding that he expected core inflation firmer this year than last year and close to 2 percent in 2017.

The U.S. central bank said in its Wednesday policy statement that financial market-based measures of expected inflation were low.

“Although recent declines in inflation compensation do give me some pause, I think the evidence indicates that inflation expectations … remain well-anchored,” Lacker said. He cited studies that suggest public expectations of inflation guide actual price changes.

Let’s see if the market really likes the idea of higher rates, or if it was just kidding when it acted like it did for the past 5 weeks.

Sometimes I think these economists ingest psychedelic mushrooms before penning this cock-eyed stories. Hang on, let me take this shit serious for a second and stop laughing at it. Okay, I’m ready.

In order to avoid a significant overheating in the U.S. economy, the Fed must cease being the central bank for the world and instead return to their station at central bank for America. Moreover, it’s incumbent upon them to stave off debilitating inflation, affected by a rapidly increasing employment index, by hiking rates FOUR times this year.

“One interpretation of the recent moves by the European Central Bank and the Federal Reserve is that they represent coordinated attempt to ease global financial conditions while avoiding upward pressure on the U.S. dollar, especially against the Chinese renminbi,” write Chief Economist Jan Hatzius and Economist Sven Jari Stehn of Goldman Sachs Group Inc, giving a nod to the so-called “Plaza Accord 2.0” theory.

“To guard against significant overheating, we think that the FOMC would want output and employment growth to slow as we enter 2017,” the economists write. “But this seems inconsistent with the current setting of financial conditions.”

Put another way, if the blowout in spreads and strength of the dollar still hasn’t been enough to stop the U.S. unemployment rate from declining steadily—which implies that growth has been above-trend—then that alone is enough evidence to suspect much more tightening is required to rein in activity to a level at which the economy won’t be running too hot.

Goldman estimates that the Fed will need to carry out four rate hikes this year in order to strike this balancing act and avoid a more brisk removal of monetary accommodation later that could tip the economy into recession.

In other words, the strength of the domestic economy will soon force the Fed to return to being the central bank for the U.S., rather than the world.
“If we are right, the Fed’s willingness to keep policy easier for longer in the name of global policy coordination is likely to be short-lived and the funds rate will rise significantly further than currently discounted in the bond market,” conclude Hatzius and Stehn.

Both Hatzius and Stehn are morons of the first magnitude. These economists at Goldman are delusional, playful thinkers, men clad in velcro hoodies playing with their feces inside of rubber rooms.

At this point, the Valeant agony is minimized only by the reduced size in an already tattered position. Firms like Valueact and Pershing Square have endured heinous, unforgivable, losses at the hands of a M. Pearson. The bedraggled CEO of VRX is a fat, disgusting, troll of a man, who circumvents the world in search for orphan drugs, for the explicit purposes of raising their prices.

This business model, once revered by the Wall Street elite, has proven to be woeful.

Here we are, pre-market, and the stock is getting hammered on heavy volume, down 4.5% to $25.77.

As I am writing this, shares are halted with news pending. The way I see it, Pearson has to go, immediately. Since the business model is broken and their debt load is becoming an issue for the never-ending spiraling equity, they need to do a capital raise. At this point, the only thing that can turn the shares around is a takeover of the entire company. Even if that occurred, the geniuses who went long above $200 will never recover their original investment.

The tides have turned, permanently, for VRX and their ilk, which include ENPD and MNK.

It appears the zealots at Marriot have outbid Anbang for the takeover of Starwood. Let’s see if the Chinese step up and bid higher.

This is all very, very boring.

Via Briefing.com

Under the terms of the amended merger agreement, Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott International, Inc. Class A common stock for each share of Starwood Hotels & Resorts Worldwide, Inc. common stock. Excluding its timeshare business, the transaction values Starwood at ~$13.6 bln ($79.53 per share), consisting of $10.0 bln of Marriott International stock, based on the closing price of $73.16 on March 18, 2016, and $3.6 bln of cash, based on approximately 170 mln outstanding Starwood shares. Starwood shareholders will own approximately 34 percent of the combined company’s common stock after completion of the merger, based on current shares outstanding.

In addition, Starwood stockholders are expected to receive separate consideration in the form of Interval Leisure Group (IILG) common stock from the spin-off of the Starwood timeshare business and subsequent merger with ILG, currently valued at $5.83 per Starwood share, based on ILG’s share price as of market close on March 18, 2016.

Both companies continue to expect the closing of this transaction will occur well before the planned date of the Marriott-Starwood merger closing. The amended agreement and the ILG transaction have a combined current value of $85.36 per share of Starwood common stock. As a result of extensive due diligence and joint integration planning, Marriott is confident it can achieve $250 mln in annual cost synergies within two years after closing, up from $200 mln estimated in November 2015 when announcing the original merger agreement. This revised agreement offers superior value for Starwood’s shareholders, the ability to close quickly, and provides value creation potential that will allow both sets of shareholders to benefit from improved financial performance.

Who the fuck bids $85.36 anyway? What did they calculate that price in a psyche ward somewhere, to the exact penny? Psychopaths.

Much of the seasonality data is regarded as ‘hocus pocus’, sheer moments of coincidence, by the bookworm crowd. The truth is, often times this hocus pocus stuff can save you an immense amount of coin, simply by following the paths worn out by fellow humans who have travailed similar paths before.

The above chart are the seasonality returns for the SPY, dating back to 1993, courtesy of Exodus. Moreover, the last time the SPY returned greater than 6% was in 2009 and 2010. In both circumstances, the market proceeded higher in April, with a 1.55% return in 2010 and a 9.93% return in 2009.

In May of 2010, however, the SPY plummeted by 7.95%.