18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
After internal review, management at VRX have discovered they’ve been completely full of shit. An earnings and revenue restatement are forthcoming, which might open the door to regulatory concerns. As such and is presently the case, the stock is careening lower to the tune of 8%.
Based on recent regulatory filings, Bill Ackman’s Pershing Square owns about 9% of Valeant Pharmaceuticals. With the stock down 8% in after hours, Broadway Bill Ackman is down a total $350 million today alone–$140 million in the after hours.
My question to the SEC is: who leaked this news throughout the trading day? Surely a company of this size and liquidity should not dive lower by 10% without news. Someone was trading on insider knowledge.
As a reader of the site, you have very little to complain about. The markets have been played like a fine tuned fiddle in 2016, with all ‘tabbed’ bloggers offering timely and often sagely advice during these tumultuous times. I had you on the ark, long TLT, then off the ark, as it docked in harbor for renovations. More recently, I alerted you to the fact that I was to be long SPY, with all of my available cash, thanks to the predictive algorithmic greatness inherent in Exodus.
Now, you are entreated to a 5 day long educational boot-camp, hosted by Jeff Macke (tonight at 7pm and tomorrow), then Jeff Kohler aka The Option Addict and then finally, Vince aka Raul for an Exodus run through in a very detailed manner. I beseech you, for the sake of your families and future offspring: reserve a seat.
Markets soared higher today, as a culmination of separate events formed a consensus opinion that all short sellers should be vanquished from the field of battle. Stocks with large short positions, particularly in the oil patch, underwent terrific rallies– relieving longs who’ve been under their torturous spells for the better half of 8 weeks.
Most impressive were the gains found in utilities, gold, and the lack of weakness in bonds, equating to an overall euphoric day whereby everyone seemed to win. Alas, all good and righteous things must end. According to the rules set forth in Exodus, I will begin the liquidation of my SPY position–leading me to a 75% cash position by the end of this week.
This is fucking bullshit if you’re a GOGO shareholder. Last week you wanted to blow your brains out, thinking all of the airlines hated the product and wanted to move on over to VSAT.
Today, you’re feeling like Henry the 8th during his 6th marriage.
Shares of Gogo Inc. soared after the company ended a legal dispute over contract terms with American Airlines Group Inc., though the airline is still considering a switch to a competitor for in-flight Wi-Fi service on about 200 planes.
Scott Minerd, CIO of Guggenheim Partners, managing upwards of $250 billion (who’s counting, really?), declared on CNBC today for all able-bodied lads and lassies to board the ark, as the 10 yr yield descends into the sublimely ridiculous level of 0.25% to 1%. This, as you know, would mean a terrific rally in store for those owners of TLT and other government bonds.
It is his conclusion, a man privy to the best minds afforded to finance, that the idiots in Europe, Japan and elsewhere, will henceforth undergo a systematic plan that will eventually destroy their economies, by going deeper into negative rate territory. It is Minerd’s belief that both zebra and man can coexist on this ark, if only for the purposes of salvaging whatever semblance of normalcy left on God’s green earth.
I just mentioned the hedge fund hotel status of Valeant pharma last week. Well, for no reason other than a Wells Fargo analyst note last week, said hotel is on fire right now.
Shares are plunging, in a more than notable decline. This has the look of liquidation, someone forced to get out in order to save a fund or a very large account.
I hate to keep picking on Ackman, but he’s awfully concentrated amongst a few positions, VRX being chiefly his largest and most important.
For now, his other positions are holding up, namely APD and CP. Still, the ruinous losses in his VRX position alone, just for today, is about $200 million.
I don’t know how many times I need to show this to you, for you to understand the winship, for lack of a better term, is palpable.
That being said, the market has taken on the tone of a vigilante, in search of criminally minded short sellers. Using the algorithms of Exodus, we can very easily discern which stocks might be set for a significant squeeze to the upside.
Here are some names. The link is here for members.
(Stock, technical score, 1=weakest, 5=strongest)
ANFI 4.54
MAT 3.84
TTWO 3.84
ADT 3.79
FAST 3.79
OMI 3.79
ANF 3.74
BGG 3.74
VRSN 3.69
CLB 3.64
You will notice there was just 1 oil related name in there. That’s because the sector hasn’t earned the privilege of a high score, as the price action has been wholly belligerent and without any sense of decorum. My best guess, there will be a considerable number of oil names in the short squeeze screen tomorrow, providing the market and oil continue higher.
In our momentum analyzer, there are plenty of oil names, if that’s what you’re interested in.
If we were to grade investment banks and put them on a barbell, Goldman would be on one end, representing the best and smartest with just $10.6 billion in overall oil and gas exposure, and then Citi on the other, dumb as shit gorillas with $58 billion in a toxic wasteland loan portfolio of oil and gas nonsense.
The figure, which counts both loans made and future promises to lend, accounted for $4.2 billion of a total $10.6 billion as of the end of December, the New York-based bank said Monday in its annual regulatory filing. Goldman Sachs has $1.5 billion in loans to energy companies rated below investment grade and $2.7 billion in unfunded commitments.
The total exposure jumps $1.9 billion counting derivatives and other receivables, which were “primarily” to investment-grade firms, Goldman Sachs said.
Concerns about banks’ energy loans have helped spur share declines for lenders after the price of oil fell 42 percent in the past 12 months through Friday. The Standard & Poor’s 500 Financials Index slumped 13 percent in the same period.
Goldman Sachs’s total is below some of its biggest competitors. Citigroup Inc.’s funded and unfunded commitments amounted to $58 billion, analysts at Susquehanna Financial Group LLP wrote in a note last week. Most of Wells Fargo & Co.’s $17 billion in outstanding energy loans is for companies that aren’t investment grade, Chief Financial Officer John Shrewsberry said last month.
I think it’s fair to say that 40% of oil and gas loan portfolios can and will turn bad for investment banks. By my last count, there was $356 billion in unmanageable oil and gas debt, soon to be restructured. Behind that was another $351 billion that is likely to fall by the same sword, unless we see a measurable rally in crude and other basic resources. In all, a total of around $700 billion in debt might need to be restructured. This, of course, doesn’t mean total loss. There are assets associated with these loans, collateral through land and equipment. But the losses will be significant and we’ve yet to endure their sting through the reporting of them by any of our banks.
So, now everyone hates stocks, even the people whose very job definition is to be fully invested at all times. Bob Doll, perma-bull, Nuveen Investments, loves stocks, innately. He was programmed to tell you to buy them. He was trained, as a young lad, to run about the earth to tell people about stocks, their virtues, and to always trust their integrity.
But now he’s saying to buy dips and to avoid chasing the rally. This leads me to believe we are to go straight up, without pause or siesta.
At the very end there, when asked about financials, Bob couldn’t help himself but to suggest buying them.
Quite frankly, James Cramer is appalled by today’s rally and he’d like you to see your way out, and certainly not to chase it. For if you do, a certain spell of doom will cast over your house. It is Jim’s belief that it is an impossibility for crude oil to trade appreciably higher. Moreover, our banks have yet to feel the full downwards thrust of energy prices and the billions of dollars they lent to see the industry expand.
It is J. Cramer’s belief that investors pallor will soon be ghostly, as prices fall and fall some more. The entirety of civilization will cease to exist and in its place will be nothing but a Bristol Meyers outpost.
He finds you to be of the stupid varietal, disgusting, craven, beastly men, chaser of stocks, subjugated by pajama-clad wearing futures guys–ordinary mountebanks.
Markets are off and running again, as a major short squeeze ensues on Wall Street. The most hated of all, crude oil, is being propped up by reports from the IAE, suggesting that production out of the US shale will drop by 600,000 barrels per day in 2016 and another 200,000 in 2017.
This, of course, is having a profound effect on speculators, who are now running over one another, with ghastly intentions of trapping shorts who exhibited too much zeal in their positions, buying up futures contracts–pushing net long positions to a five year high.
The subsequent result of all this fervor is an extraordinary short squeeze amidst stocks heavily shorted. Shares of FCX are higher by 13%, amongst many other commodity related plays.
As such, I expect this treacherous market to be as punitive and absurd on the upside as it was on the downside. If you happen to be short, I advise you to seek counsel and to get your affairs in order, for the guillotine is heading your way and it isn’t going to leave until your head is in a basket.
NOTE: tonight begins the five day journey of the ibc bootcamp, hosted by The Option Addict, Jeff Macke and Raul, who will be doing a live Exodus presentation.
