FED’S DUDLEY: Rate Hikes On Track for 2016; Inflation Still a Concern

Can you explain this to me? The second I saw Grandma Yellen and her idiot smile, I knew we were in for a severe beat-down. But this type of tone deaf jargon out of the Fed is completely insane. Fed’s Dudley made a speech today and didn’t mention the markets at all. He said inflation was still a concern and how employment data suggested the economy was smoking, fucking, pistol hot, and how rate hikes, more or less, are still on track for 2016.

You’ve got to be kidding me.

Watch the clip.

Dow futures are down 370.

Talk about spinning a yarn.

Goldman is out with useless garbage this morning, declaring oil to be sowing the seeds of a future bull market, all is good and merry. Rejoice in the calamity of sharply lower crude, for it will lead us to everlasting strength in the commodity.

What sort of shit are they on over there? With this sort of doublespeak, Goldman must be short the commodity, hoping to rope in a few last minute suckers.

“The key theme for 2016 will be real fundamental adjustments that can re-balance markets to create the birth of a new bull market, which we still see happening in late 2016,” analysts Jeff Currie and Damien Courvalin wrote.

The market will signal it’s ready to rally when the forward price curve, which currently shows a steep discount on immediate commodity supplies, starts to flatten out, the analysts said. The end of that discount would demonstrate that there’s enough demand to whittle down oil that’s piled up in storage tanks, they said.

“A flat curve near cash costs is historically the buy signal for passive investors and we believe the current bear market will end the same way,” Currie and Courvalin said. “Such a signal is what will shift us to being bullish commodities.”

Goldman, which has warned that the oil market might not re-balance unless prices fall to $20 a barrel, forcing production cuts among shale operators, said this remains a possibility. Still, the $20 scenario remains an outlier rather than their most-likely case, and would only be realized if oil storage space runs out. As that’s unlikely, the bank said it’s sticking with its forecast of $40 a barrel for the first half.

I suppose an argument can be made that the housing collapse was sowing the seeds for another bull market too. But in the interim, as it was happening, it didn’t help not one iota to think that way. People got wiped out trying to catch the falling knife. This Goldman note is abhorrently irresponsible.

What’s important to remember here, lads, is we’re permitting Iranian crude to come back onto the markets now–because they’ve earned it by capturing our vessels, taking our navy crewmen in custody, albeit temporarily, and agitating a ‘student mob’ to burn down the Saudi Arabian embassy in Tehran.

Oh, they’ve also promised to stop trying to make those devilish nuclear bombs.

Dow future are hitting the rocks.

Both WTI and Brent are lower between 3.5 to 5%, under $30 per barrel.

The key theme for 2016 will be real fundamental adjustments that can rebalance markets to create the birth of a new bull market, which we still see happening in late 2016,” Goldman said in a report.

Others were more concerned about the impact of new exports from Iran. While experts warned that not all sanctions may be lifted immediately once the agreement on its nuclear program came into effect, any additional oil would add to a glut that has pushed prices into a deep slump since mid-2014.

“In the very short term, another price drop cannot be excluded in particular after sanctions against Iran are being lifted,” Commerzbank analyst Carsten Fritch told Reuters Global Oil Forum.

“That means a drop toward $25 is quite possible, but not much lower than that.”

The end is now.

China dropped by another 3.5% tonight, putting it down 20% from recent highs. Their stock exchange, however, is utterly meaningless to world markets. But it’s a side effect of the core issues, which is capital flight, currency devaluation, and a drawing down of their currency reserves. Bear in mind, according to McKinsey, the Chinese household and corporate debt are the most leveraged in the world.

Let’s face it, the world is awash in debt. It will take a miracle to have this all end well.

Crude is down by 3% and Dow futures are at session lows, -182.

Shares of Freeport McMoran are down 91% over the past 5 years, off by 38% this year. The recent drop has pushed the companies debt/eq level above 3–putting fear into the minds of investors, considering FCX has over $20 billion in debt. Their copper mines are the envy of the world, yet no one gives a shit about copper anymore. This has conjured up chatter that the company may opt to put some of their assets up for sale.

According to a recent Deutsche Bank analysis of the companies balance sheet, they should  turn a profit again in 2017–providing the price of copper doesn’t tank further.

The only problem with selling assets is the entire sector is in turmoil. FCX was the elite of the group, with crown jewel properties. It’s sort of like trying to find buying for mortgage backed paper in 2009. Who wanted to buy it then? No one. But, after the dust settled, the people who stepped up and bought the good mortgage paper, for pennies on the dollar, made an absolute fortune.

The stock has been in the penalty box for some time now. But things have accelerated to the downside, in a big way, these past two weeks, which is now affecting some of their debt–especially paper that is maturing in 2018.

Their $20 billion in debt is staggered out for the next couple of decades.

When President, Donald J. Trump might just try to park the USS Reagan in the port of Beijing. Once again, Trump took to populism and attacked China for “stealing American jobs” and for “trading unfairly.” Because of this, he intends to slap the shit out of them with trade tariffs, in order to ‘even the playing field’ and to punish them for killing dogs and eating them.

People love when Trump attacks China, not because they eat dogs or steal American jobs or roll over protesters with Russian made tanks; but because Americans hate the game of baccarat and will not tolerate it any longer in our mafia owned casinos.

Chinese markets aren’t really crashing tonight, just an ordinary -1.54%. Oil is practically up, down 1.67%. But NASDAQ futures are meeting its maker, down 50 points in despondent thinly traded pajama laden pin action.

During tonight’s debate, GOP frontrunner, Donald Trump, said he’d slap the shit out of China and Japan for making fools of us in trade.

It’s like Fred got all down and out over his ETSY/TWTR positions and just wanted to go back in time and relive his go-go golden days, when investors were fucking morons and unprofitable social media plays were all the rage.

Leading a small group of corrupt and idiot investors, including Morgan Stanley, Andreesen Horowitz and Spark Capital, Fred is trying to make Foursquare great again (extra Trump).

Foursquare, which makes apps that helps users find restaurants and stores and “check” into them, also raised $45 million in funding, Glueck said in a blog post on Medium.

This series E funding round was led by Union Square Ventures with participation from Morgan Stanley, as well as previous investors including DFJ Growth, Andreessen Horowitz and Spark Capital.

The company expects this latest funding will aid its plans to fill 30 new positions in sales, engineering and other functions, according to Glueck’s blog post.

Foursquare planned a funding round in December, between $20 million and $40 million with one new investor, valuing the company at $250 million.

Does anyone actually use Foursquare anymore? Fuck that shit. I don’t want to be the “Mayor” of anything, let alone some restaurant. This company is worth exactly zero. Hopefully Fred & Co. can sucker Marissa Mayer from Yahoo to buy this heaping pile of waste, once again. Either way, this is a major “down round” for the happening social media app of 2007.

I can’t wait until it IPOs.

Last year was an awful year for many of you favorite billionaire hedge fund managers. With markets down the drain in 2016, let’s have a glance at some of the largest holdings at some of these prestigious denizens of capital management.

Pershing Sq.

VRX -12%
APD -9%
CP -16%

Ballpark overall fund performance: -11.1%

Greenlight Capital

AAPL -5.3%
GM -11%
KORS -10%

Ballpark overall fund performance: -11%

Appaloosa Management

GM -11%
HCA -4%
DAL -11%

Ballpark overall fund performance: -10.6%

Trian

MDLZ -7.3%
PEP -4%
SYY -1%

Ballpark overall fund performance: -9.98%

Valueact

MSFT -4.3%
VRX -12%
HAL -7%

Ballpark overall fund performance: -7.3%

Paulson

AGN -4.7%
VRX -12%
TWC -2%

Ballpark overall fund performance: -12%

Icahn

IEP -5.1%
AAPL -5.3%
CVI -7.6%

Ballpark overall fund performance: -12.3%

Baker Brothers

INCY -26%
SGEN -17%
ALXN -13%

Ballpark overall fund performance: -18.7%

Baupost

LNG -12%
VSAT +0.8%
AA -26%

Ballpark overall fund performance: -10.2%

Thirdpoint

BAX -7.5%
AMGN -5.5%
AGN -4.7%

Ballpark overall fund performance: -7.3%

Tiger Global

NFLX -7%
JD -13%
FLT -16%

Ballpark overall fund performance: -12.6%

Citadel

LRCX -9.3%
EW -2.7%
APC -28%

Ballpark overall fund performance: -13%

Jana

QCOM -4.5%
CAG -5%
WBA -3.7%

Ballpark overall fund performance: -7.5%

Eminence

ADSK -14%
GMCR +0.5%
G -6.4%

Ballpark overall fund performance: -10.4%

Glenview

MON -6%
TMO -4.3%
HUM -6.6%

Ballpark overall fund performance: -9.9%

Most of these funds got smoked the fuck out in their 2nd and third tier positions. I didn’t bother listing them, since there is a remote possibility they pared them down and/or sold them out before they collapsed.

Hopefully, for the sake of the accredited investors in these funds, their managers hedged.

Data provided by Exodus

Hello there fine gents,

Early this morning, Lord Norman Lamont had a word, or two, regarding the obliqueness of the Janet Yellen Federal Reserve. Our good Sir offered his two cents, as well as the final say, on the eventual outcome of the ridiculous Yellen ‘dot plot.’

There is nothing else to be discussed on this matter. It is now closed. EXCHEQUER NORMAN LAMONT has said what needed to be said on the matter, so consider it a moot topic henceforth.

Good day.