Biotech is Tanking Again; Sector Now Off by 28% For 2016

Some of these biotech stocks are having their brains eaten for them. Wow. Shares of MNK are off by 13.5%, chained to the VRX ball heading to the bottom of the sea.

ZYNE is off by 21%
GWPH is off by 9.5%
PBYI is off by 8%
VRTX is off by 5.7%
BMRN is off by 4.5%

And there are scores of small cap names down 5%+.

Biotech is easily the worst performing sector of 2016, down 28%. To put that into perspective, for all of the doom being cast over the oil sector it is up 0.2% for the year–completely reversing stark losses that were endured earlier in the year.

Well, well, well, look what we have here: a fucking asset bubble crisis born from egregiously low interest rates. Yet, in this special case, we are talking NEGATIVE interest rates and their deleterious effects.

Moody’s is out with a report, warning Sweden (of all places) that their current housing market is bubblelicious and very soon they’re all fucked and in the streets panhalding for snaps and glog.

… the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit”, adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low, raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends. In all three countries, households are highly leveraged, and while they also have high levels of financial assets, returns on these assets will be under increasing pressure if the negative interest and yield environment persists.

Here is the full report, via Moody’s.

London, 16 March 2016 — The central banks of Switzerland, Denmark and Sweden (all rated Aaa stable) have been among the first to push policy rates into negative territory. A year into this novel experience, Moody’s Investors Service concludes that, from among the three countries, Sweden is most at risk of an — ultimately unsustainable — asset bubble.

Moody’s report, entitled “Governments of Switzerland, Denmark & Sweden: Negative interest rates have unintended consequences, with Sweden most at risk of asset bubble,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.

The three countries’ central banks have lowered their key policy interest rates to the current -0.75% in Switzerland, -0.65% in Denmark and -0.5% in Sweden, albeit for different reasons. The Swiss and Danish central banks were aiming to reverse the intense appreciation pressure on their currencies as a result of the ECB’s introduction of its quantitative easing program. In Sweden, the central bank is focused on lifting persistently low inflation, in the context of the ongoing strong economic expansion.

“In Moody’s view, the Danish and Swiss central banks have achieved their main objective given that the appreciation pressure on their currencies has eased or, in the case of Denmark, even disappeared completely. But this is not the case for Sweden, where the Riksbank has not been successful in engineering higher inflation, while Sweden’s GDP growth continues to be among the strongest in the advanced economies,” says Kathrin Muehlbronner, a Senior Vice President at Moody’s.

“At the same time, the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit”, adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low, raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends. In all three countries, households are highly leveraged, and while they also have high levels of financial assets, returns on these assets will be under increasing pressure if the negative interest and yield environment persists.

Moody’s is not overly concerned about Switzerland and Denmark as the rating agency considers these trends as “unavoidable” side effects of an otherwise successful policy. Mortgage lending also shows first signs of slowing in both countries, and Switzerland in particular has deployed several macro-prudential tools to reduce risks to financial stability.

However, Moody’s believes the situation is different in Sweden. It believes that the Riksbank will find it difficult to achieve its objective of significantly pushing up consumer price inflation in a deflationary global environment, while the sustained and strong growth in mortgage lending and house prices risks leading to an (ultimately unsustainable) asset bubble.

The Swedish authorities have imposed counter-cyclical capital buffers on their banks, and the country’s banking regulator has announced additional measures with effect from mid-2016 onwards. However, it remains to be seen how effective these measures will be in achieving a material slowdown in credit growth and house prices, while interest will likely remain at negative (or very low) levels. In general, Moody’s believes that macro-prudential tools are most effective if they complement rather than oppose the direction of monetary policy.

This is a nice, cordial, market ahead of the Yellen speech. It’s highly unlikely she will hike rates today. However, the market wants to know which one of those asshole Fed heads wanted to. Moreover, every syllable of her statement will be parsed and vetted for keywords that will tell us when the Fed will hike next.

My belief, from the start, is that rates should be permanently at zero because of the $19 trillion debt burden, coupled with the fact that I rather enjoyed POMO. However, the tone and tenor of this Fed are appreciably more hawkish than the Bernanke Fed, which leads me to believe they will stop at nothing to hike rates, whenever they can.

As such, I believe today’s meeting will point towards a June hike. The markets are firmly in denial, high on nitrous oxide, laughing like little bitches at all the bad news because nothing can go wrong. Hell, we might rally after the statement and squeeze the shorts a little more, formerly a favorite avocation of mine. But, make no mistake, the market will not like the reality of higher rates, when they do finally befall on his market.

Ahead of the news, oil is higher by 3.6%. Both the dollar and bonds are higher and gold is flat.

My hunch: sell the news.

This is the most checkered panted dialogue I’ve heard this election cycle, by the GOP. One of their committee members is going to introduce changes to the rules in order to unbind the delegates from the candidates, in order to permit the RNC to cherry pick their preferred candidate over whatever the stupid, uninformed, people selected.

Cory said, “That’s right. Every delegate to the 2016 Republican National Convention is a completely free agent, free to vote for the candidate of their choice on every ballot at the convention in Cleveland in July. Every delegate is a Superdelegate!”

The fuck.

Now hear this smug little fucker during a CNBC interview this morning, saying he doesn’t know why we even bother with primaries, chuckling like a school girl the whole way.

The fix is in.

The establishment does not want D. Trump to be President for a wide variety of reasons, mostly because he’s not beholden to anyone. It’s like a crooked cop taking money from the mob getting mad at the clean cops who want to put them away.

In a novel twist to dismiss the Trump surge, former speaker of the house and permanently tanned, John Boehner, said he will support current speaker, Paul Ryan, as the nominee if the current roster of nominees are unable to secure the required delegates needed to ‘lock in’ the nomination.

In other words, he’s suggesting that if Trump got 1,100 delegates to Cruz’s 500, they’re both losers and don’t deserve to run.

“If we get to the convention and we don’t have a nominee that can win on the first ballot, I’m for none of the above,” he said. “They all had a chance to win. None of them won. So I’m for none of the above. I’m for Paul Ryan to be our nominee.”

This is a very clever establishment tactic.

Bohner regularly refers to T. Cruz as ‘lucifer’ and calls him a ‘jackass’ for being unwilling to work with the other checkered panted hacks.

As for Boehner’s lack of desire to run for the Presidency himself, he offered nothing but wanton depravity as his excuse.

“Being president is like voluntarily climbing into a jail cell and then letting people throw stones at you through the bars,” he said. “I smoke cigarettes, I drink red wine, I play golf, I cut my own grass, I wash and iron my own shirts, and I sure as hell am not giving that up to be president of the United States.”

Trump’s take on a brokered convention:

“If you disenfranchise those people, and you say, ‘I’m sorry, you’re 100 votes short’ … I think you’d have problems like you’ve never seen before. I think bad things would happen.”

I’m so done with this story. Valeant is the hedge fund hotel that checks you in, but doesn’t let you out.

The losses via concentration is both mind boggling and staggering.

Overall, Valeant lost over $12 billion in market cap yesterday, of which over $5 billion belonged to idiot hedge less hedge fund managers.

Ackman’s $12 billion Pershing Square Capital Management and Ubben’s $14 billion ValueAct Holdings, which invest for large clients including state pension funds, are two of Valeant’s largest investors with directors on its board.

Ackman’s fund, Valeant’s third largest investor with 16.5 million shares, lost an estimated $776 million on Tuesday while Ubben’s fund, Valeant’s fourth largest shareholder with 14.9 million shares, lost roughly $701 million. The estimates are based on share counts from the end of December.

At least five smaller hedge funds had tied up 20 percent or more of their capital with the company as of the end of December, according to Symmetric.IO, betting that it could turn its fortunes around.

Brave Warrior Advisors has one quarter of its roughly $3 billion invested with Valeant and lost an estimated $292 million on Tuesday, if its position remained unchanged from the end of December.

At Brahman Capital, which also has more than one quarter of its money invested in Valeant, the losses are estimated at $379.5 million on Tuesday alone, if the fund still owns the 8.1 million shares it reported at the end of December.

Okumus Capital, which added Valeant in the fourth quarter, lost an estimated $87 million on Tuesday, if it still owned the stock. Senzar Asset Management, which also added Valeant in the fourth quarter, lost an estimated $60.7 million. Tyrian Investments, a fund that managed $870 million at the end of December 2014 according to a regulatory filing, lost an estimated $8 million on Tuesday with Valeant.

The biggest scam purported unto the American people over the past decade was born in Silicon Valley, by socially awkward geeks trying to get laid by becoming rich. In order to accomplish this task, they schemed ways to create a Ponzi scheme that overly inflated the valuations of their overvalued, piece of shit social media companies.

This, of course, was helped by the demonically greedy investment bankers who sold this to the investor class. Men like Fred Wilson made hundreds of millions by funding and then dumping these horrible money losing ventures onto an unsuspecting public.

Make no mistake, these are mostly horrible companies, poorly run and unable to survive a hard economy.

This morning, Morgan Stanley offered a mea culpa for getting LinkedIn so wrong, downgrading the stock and cutting the price target to $125.

“With its current product offering, LinkedIn isn’t likely to be as big of a platform as we previously thought,” the team, led by Brian Nowak, said. “We are reducing our price target to $125 [per] share (from $190) as well, driven by our lower long-term cash flow forecasts and increased execution uncertainty.”

“LinkedIn’s ability to re-accelerate Talent Solutions growth and/or deliver better than expected results in B2B advertising, Lynda or Sales Navigator could reinvigorate investors and drive the stock back toward our bull case valuation ($200/share),” the analysts noted. “That said, continued faster than expected deceleration and/or mis-execution will likely cause the stock to be range-bound (best case) or trend toward our bear case valuation ($60/share).”

It’s amazing how so many people vomited over themselves to get back into this name, thinking the worst was over. This companies brand is nearly ruined. To back up my claims are staggering -36% January same store sales and -26% for February.

Consequently, the stock is plunging.

CMG expects Q1 EPS will be a loss of ($1.00) per share or worse, well below the Capital IQ consensus for earnings of $0.06.

Sales: February sales comps improved to (26.1%) from (36.4%) in January. Leap day added an estimated 2.6% to the February comp. Sales comps improved to (24.7%) for the last two weeks of February, excluding the extra leap day, from an average of (33.8%) during the first two weeks of February.

The sales recovery began the week of February 8, 2016, when we launched an aggressive marketing campaign that coincided with our National Team Meeting, to invite customers to dine at Chipotle via a free burrito offer. This sales recovery continued into March, as comparable restaurant sales were (21.5%) during the week ended March 7.

Results the second week of March declined to (27.3%), as they were affected by the temporary closing of a single Boston area restaurant which was the result of our restaurant teams fully following protocols. The restaurant reopened quickly with no customers affected.

Operating margin: Anticipates Q1 restaurant-level operating margin to be in the mid-single digit range.

“During the quarter we will incur higher expenses driven by increased marketing and promotions spend in other operating costs, which are anticipated to be significantly higher in the first half of 2016 compared to historic reporting periods.”

“We also anticipate higher food costs due to additional food safety protocols put into place, as well as higher food costs related to food waste, rejection rates related to high resolution DNA testing, and lower volumes. We have also incurred higher labor costs to ensure we were fully staffed as customers redeemed their free burrito offer.”

“We continue to expect that our margins and earnings potential will fully recover as our sales improve over time, except that we expect our food costs to be higher on an ongoing basis by about 200bps due to the food safety related actions we have taken.”

We were the Saudi Arabia of coal. Now we’re the Venezuela of coal. Thanks almost primarily to the EPA, our once great coal industry is in utter ruin. The best among them, Peabody Energy, warned this morning of bankruptcy and is a going concern.

“As a result of operating losses and negative cash flows from operations and our election to exercise a 30-day grace period with respect to certain interest payments, together with other factors, including the possibility that a covenant default or other event of default could cause certain of our indebtedness to become immediately due and payable (after the expiration of any applicable grace period), we may not have sufficient liquidity to sustain operations and to continue as a going concern.”

“We incurred a substantial loss from operations and had negative cash flows from operating activities for the year ended December 31, 2015. Our current operating plan indicates that we will continue to incur losses from operations and generate negative cash flows from operating activities. These projections and other liquidity risks raise substantial doubt about whether we will meet our obligations as they become due within one year after the date of this report. We have also elected to exercise the 30-day grace period with respect to a $21.1 million semi-annual interest payment due March 15, 2016 on the 6.50% Senior Notes due September 2020 and a $50.0 million semi-annual interest payment due March 15, 2016 on the 10.00% Senior Secured Second Lien Notes due March 2022, as provided for in the indentures governing these notes. Failure to pay these interest amounts on March 15, 2016 is not immediately an event of default under the indentures governing these notes, but would become an event of default if the payment is not made within 30 days of such date. As a result of these factors, as well as the continued uncertainty around global coal fundamentals, the stagnated economic growth of certain major coal-importing nations, and the potential for significant additional regulatory requirements imposed on coal producers, among other matters, there exists substantial doubt whether we will be able to continue as a going concern.”

During today’s amazing Trump acceptance speech, Donald Trump informed America that, if elected, we will win again, a lot. Moreover, everything is going to be great and he’s very happy to meet so many amazing people and do incredible things for the United States.

He also called out the media in the back of the room, calling them ‘some truly disgusting people.’

Also, I loved how he had his campaign manager, Cory something or another, on his right hand side, despite being maligned by said disgusting people in the media for pushing some crazy lady, or something of that order. He truly gives zero fucks.

#winning. #fuckyeah.