CHINESE STEEL DEMAND EVAPORATING AT ‘UNPRECEDENTED RATE’

I am sure Janet Yellen and her board of retarded governors are reading this tonight, scratching their balls saying “hey, we should raise interest rates.”

Ahead of tomorrow’s Fed meeting, this sort of news can do nothing but help make the case for another round of QE

“Production cuts are slower than the contraction in demand, therefore oversupply is worsening,” said Zhu at a briefing by the China Iron & Steel Association. “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up.”

China’s mills — the linchpin of the global industry, producing half of worldwide output — are battling against oversupply and sinking prices as local consumption shrinks for the first time in a generation. The fallout from the industry’s struggles is hurting iron ore prices and boosting trade tensions as China’s mills seek to sell their surplus overseas.

“China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed,” Zhu said. “As demand quickly contracted, steel mills are lowering prices in competition to get contracts.”

Now I know what you’re thinking.

“Why do more QE, since it has done nothing for us thus far?”

Oh really? Your science if off, mate. Just because the economy isn’t booming 1999 style, that doesn’t mean QE did nothing. As a point in fact, one could make the argument that without QE the euro would’ve collapsed and all of our stupid, fucking, banks too.

The economy needs more easing because there is deflation. Once the Fed comes around to the facts, stocks will be crashing bears’ fucking skulls again.

Goodnight.

This has to be the single most dysfunctional tech stock on the planet. No wonder why Fred Wilson sold his shares to the ordinary folk. These guys running Twitter are animals.

Revenue will be $695 million to $710 million, the San Francisco-based company said in a statement Tuesday. That compares with analysts’ average projection for $741.6 million, according to data compiled by Bloomberg.

In the third quarter, when Dorsey was still interim chief, the company’s user base grew 11 percent to 320 million, compared with a forecast for 324 million and growth of 15 percent in the prior period. In the U.S., the world’s largest advertising market, Twitter’s user count remained flat at 66 million.

“The lack of meaningful user growth will clearly be a long-term challenge for Jack Dorsey and his team,” Sweeney said.

Twitter shares slumped to $27.69 in extended trading, after rising 1.5 percent to $31.34 at the close in New York. The stock has slipped 13 percent so far this year.

I am long the stock in pretty decent size. The drop in the after-hours, all but wipes out my recent gains and places me in a position to really, really, ardently hate on the dick-smokers running TWTR into the dirt.

Granted,  Jack is now running the company and perhaps he can turn the ship around. But the crux of the issue with Twitter is the lack of new user momentum. Friends and family that I know think Twitter is the dumbest thing ever. Frankly, if you don’t have a defined genre of people worth following, like us in finance, Twitter is one of the most inane concepts to have ever been created.

Finance and news is where Twitter’s true value is. Management should circle the wagons around that and make this thing into a Facebook-like cash cow.

Apple is scheduled to report earnings tonight. Estimates are for $1.88. According to Factset, average revenue estimate is $50.98 billion.

Let’s be honest about Apple. It, like AMZN, is a giant deflationary vortex that constantly draws from the economy to ingratiate itself.  What’s good for Apple is good for Apple, not necessarily good for everyone else. Bear that in mind when trying to extrapolate something from their soon to be reported quarterly earnings.

If, by chance, Apple misses earnings, then the market is entirely fucked. Let’s hope Tim Cook was solely focused on his business and not so much being happy with his sexual orientation.

I added to my JAZZ, XON, COST, CNC  and NK positions, defending and advancing the cause of Le Fly towards all the corners of the globe.

If you recall, last week the WSJ threw Miss Holmes and mega-cap, privately held, blood testing company, Theranos, under the bus.

And now this from the FDA:

Heavily redacted inspection reports, posted Tuesday by the U.S. FDA, said that Theranos’s “design validation did not ensure the device conforms to defined user needs and intended uses.” The name of the device was redacted. In addition, “the design was not validated under actual or simulated use conditions.”

The inspections were conducted Aug. 25 through Sept. 16 at Theranos’s Palo Alto and Newark, California, offices.

In other words, Theranos is full of shit and their magical blood test, which only requires a pin-prick, is most likely a far fetched fantasy.

According to Crunchbase, ATA Ventures, Continental Ventures, Draper Fisher, Tako Ventures, as well as Larry Ellison are investors in Theranos.

Can you say ‘down round’?

It was a nice respite, but now it’s over. The over-arching trend of debilitating deflation has resumed, taking with it wide swaths of market capitalization from the indices. You might be tempted to bottom fish from the sewage infested waters. But you’re only going to capture sick fish, who will eventually die on you.

Might I posit an alternative stance?

Instead of repeating my errors, why not allocate funds into boring stocks that work? My largest position, as of yesterday, was COST.  It’s holding up rather well in this tape, isn’t it? Simply screen for mega cap stocks within 5% of a 52 week high and start from there.

The small cap rally that has alluded us for so long isn’t going to happen now. Very simply, after a 9% move in October, it’s unlikely we’ll get much follow through from here.

I expect the market to tread water from now until January. My job, aside from being the best god damned finance blogger who has ever lived, is to protect gains and maximize my investment dollars by limiting downside and capturing easy upside.

I just don’t see easy gains here. Biotech is down; but are they cheap?

Sure, if we knew AGIO was gonna have killer data, we’d all pile in ahead of the move. But that’s not how the market works, at least not for non-congressmen.

We make assessments and then try to figure out if our conclusions are worthwhile, based on risk/reward metrics. I’ve been rifling through risky shit like crazy these past two years, enduring savage drawdowns and inhumane periods of capital loss.

Those days are over. Le Fly is no longer interested in the Fast Money, a term coined by catamites partaking in heinous acts of degeneracy.

“The Fly” is better than them, better than all of them. You will see the fruits of my labor soon come to fruition.

The airline stocks haven’t been doing shit this year, despite the price of jetfuel plummeting to lows.  Part of the reason is Americans hate the airlines, always have and always will. We select the cheapest fare and lament over waiting in the 3rd world styled airports, amidst insane delays and ridiculous cancellations. In a sense, our air travel industry is the very worst this great country has to offer, which is why we have ZERO loyalty to any brand.

“Given that 50 percent of our revenue is up for grabs in these markets and that these carriers have had so much success when they weren’t matched, we know that we have to match their fares,” Kirby said. More than a quarter of American’s domestic capacity overlaps with Spirit’s, he said.

The fare bargains are causing a bit of an existential crisis among some who had turned bullish on the consolidated industry. Does the world’s largest airline need to join a race to the bottom to lure the most price-sensitive customers? United and Delta aren’t matching the cheap fares to the same degree.

And were Spirit executives foolish to think they could expand their flying 30 percent in 2015 without sparking a fierce backlash from rivals, at a time when cheap fuel is helping bolster American even more than others in the industry? American doesn’t hedge its fuel needs, meaning it hasn’t paid above-market prices this year or last, unlike its three largest rivals. That financial benefit has soared into the millions.

Florida-based Spirit is now “our No. 2 competitor” at Dallas-Fort Worth International Airport, with 25 nonstop routes—more flights than Delta or United, Kirby said. “In those 25 routes in Dallas that Spirit flies, they have 20 percent market share, huge market share,” he said. In Chicago, where American has a hub, Spirit has 60 daily flights to 24 cities.

As a result of Spirit’s low fares, American plans a new, no-frills fare in 2016, much as Delta devised “Basic Economy” as a way to match Spirit in competitive nonstop markets. American declined to discuss specifics of the new economy fare.

More broadly, the bare-bones fare innovations at Delta and American are the latest permutation in legacy airlines’ decades-long effort to combat the rise of low-cost rivals. In the early 2000s, after the vaunted “Southwest effect” had begun lowering fares in major markets, legacy carriers turned to an “airline-within-an-airline” model, with a goal of flying a lower-cost airline alongside their mainline operations. In 2003, Delta started Song and United followed not long after with Ted. Both flew only briefly.

I bought Centene. I have little regard for the industry and I’m not a fan of our moronic healthcare system. Nevertheless, this stock should work, as they rip their way through the middle and lower classes of American society, further ingratiating themselves with the lavish lifestyle God demanded that they have.

I have no fucking idea why I thought these two piece of shit dogs were going to trade up. Maybe I got caught up in the moment and it passed and I held to long (obviously). I just sold out of SLCA and CNX for big percentage sized losses. I am going to state a singular silver lining, which also happens to be the biggest crock of shit: they were both small positions.

So fucking what? Small positions that nibbled away at my essence each and every day. CNX reported earnings this morning and they’re fucked. SLCA is down in sympathy of EMES and HCLP, with one of the two getting slapped with ZERO dollar price targets. The frac sand market is dead. I knew that, but held on for a “trade.”

Do you know what happens when you buy a stock, that you know is a piece of shit, but want to squeeze a fucking trade out of it?

THIS HAPPENS

Spy futs -5, Europe lower by 0.6%, oil -2%, gold -0.3%, dollar flat; FUCKED

Higher

Earnings nonsense: IDTI +9.5% (made a bullshit acquisition), BABA +8.5%, ASC +6.9%, EW +6%, SAVE +5.4%, AGEN +5.2%, CNC +5.1%, COH +4.9%, PCRX +4.8%, ROSG +4.4%, MGLN +4.2%, AGII +3.7%, BMY +3.6%, PAH +3.4%, ONE +3.2%, PFE +2.8%, UTHR +2.8%, YNDX +1.8%, MDSO +1.7%, CIGI +1.4%, MRK +1.2%, TXT +1.1%, BP +1.1%, .

Mergers and Executions: PRSN +166.6% (Some moron is buying this company), TRIV +55% (acquired for $9.10 by ELGX), RIVR +29.6% (The Germans are buying this for $9.90)

Chinese lottery winners: WBAI +5.6%, JD +4.7%, DANG +3.5%, JMEI +3%, BIDU +1.9%

Random horseshit: UQM +24.6% (China pyramid scamming, most likely), ASTI +18.2% (mapping for Mars. Talk about horseshit), CYTK +13.9% (rubbish), SBBP +9.2% (RA Capital Management discloses 12.7% passive stake in 13G filing–these guys are boss), SHPG +5.6% (phase 3 stuff), AGEN +5.2% (more biotech boredom ), YHOO +5.1% (riding BABA dick), PBMD +3.3% (fucking biotech), LOOK +2.8% (don’t bother), RMBS +2.5% (100mill buyback), TWTR +1.7% (IBM announces collaboration with Twitter and The Weather Channel), TASR +1.6% (Baltimore body cams-Reuters) AA +1.3% (CRAMER PUMP)

Analyst HORSESHIT: VMW +1.8% (upgraded to Heroin from Hold at Drexel Hamilton)

Lower

SHAMEFUL earnings: HCLP -21.4% (sand sucks), RRTS -18.5%, KN -13.8%, MSTR -13.2%, GIGA -13%, CMI -8.8%, AMKR -8.1%, ALSN -6.1%, CAKE -5.8%, HIG -5.8%, ERI -5.7%, FDC -5.7%, IACI -4.3%, CAJ -4.2%, UPS -3.9%, IPGP -3.8%, JBLU -3.3%, NVCR -2.8%, AGNC -2.7%, SWFT -2.6%, F -2.1%, CMCSA -2%, CR -1.9%, PCAR -1.6%, ICLR -1.3%

Miners that suck: MT -2.9%, BBL -1.9%, BHP -1.6%, VALE -1.3%

Oil and Gas that suck: SDRL -2.5%, RIG -1.9%, TOT -1.4%, RDS.A -1.2%, HAL -0.6%, SLB -0.5%

Random shots fired: MRVL -20.1% (PWC resigned; super red flag; Einhorn must be cursed), CTIC -13.1% (DILUTION), AAN -7.1% (in symp with RCII), GORO -5.4%, GLAD -4.3% (DILUTION), FDX -2.1% (in symp with UPS), TACO -1.9% (DILUTION)

Analyst comments: DSW -1.9% (downgraded to No Real Opinion from Buy at Sterne Agee CRT), LVS -1.7% (downgraded to Equal Shit at Barclays)