You Don’t Eat Turkey; Turkey Eats You

Can you people quit being so miserable, if only for the next few days? I might have to do a post on how to properly conduct yourselves during the holiday season. There’s too much vitriolic hatred around here. Take lessons from “the dude” and unwind, man.

The next two trading days are layups. The day before and after Thanksgiving are usually strong. However, don’t expect the same grace next week. I do recall plenty of ‘cyber mondays’ gone astray. There is a solid chance we rally into year end, only because retail stocks are already appreciably lower this year. But don’t count on it.

The best trade here is to be very long now, then lighten up on Friday. It might sound short sighted and without balls; but 2015 has been a year marked with penis chopping expeditions and really bad karma…man.

Fuck 2015 and fuck my 16% gains. I hated this year and I will not get all giddy and shit, just because I’m within 24 hours of stuffing my face with protein.

Smile. National Festival is upon you (extra bipolar).

This one is slightly less amusing, only because I’m actually long VRX now. Nonetheless, the comedy I am entreated to, as VRX dives lower, much to Bill Ackman’s chagrin, due to some connect the dots whodunnit gambit–by some blogspot addressed website– is very fulfilling for me.

I enjoyed this one quite a bit.

Apparently, VRX has other pharamcies named after chess moves and Stephem King references.

I would like to get to the bottom of this. I am sure VRX has a solid explanation.

Uh, he mentioned the “f” word. Now everyone, like good little lemmings, pile into the short trade.

FML

Negative yields are persisting in Europe, with German 2yr now -0.41%. We’re seeing negative yields in most developed european nations, with Spainish and Italian yields lower than ours.

What gives?

European QE has crushed the euro and helped ease the credit crisis that was unfolding, rapidly, back in 2011. Heading into December, both the ECB and Federal Reserve are looking to make a move. The only difference is we’re looking to do the exact opposite of one another.

Speculation of further stimulus from the ECB has mounted ever since President Mario Draghi indicated in October that the Governing Council would act if needed to drive up inflation to its 2 percent target, a view echoed by several policymakers.
The ECB will next decide policy on Dec. 3, less than two weeks before a Federal Reserve meeting in which the U.S. central bank is widely expected to raise rates from zero for the first time in nearly a decade.

The likely outcome of both meetings has already been priced in by financial markets, which is why the euro has weakened over six percent against the U.S. dollar since Draghi’s comments last month.

Inflation, meanwhile, rose to 0.1 percent last month and a core measure is showing signs of strengthening over the past few months.

Still, a poll of over 50 economists taken this week showed forecasters predict an 80 percent probability of the ECB announcing further easing next Thursday – roughly the same result as the previous two polls.

“It (the ECB) cannot run the risk of disappointing markets, having raised expectations of action. Action in some form or other looks like a racing certainty; it’s merely a question of the form it takes,” said Ken Wattret at BNP Paribas in London.

How can the Fed look to tighten at a time when the ECB is set to ease further? Clearly, they’re both looking into the same deflationary vortex, one that is exacerbated by a strong dollar. It’s not like the US has some special kind of growth here, or inflationary pressures are simply too much to bear.

No.

This is sheer fuckery, largess. The only logical explanation for all this leads to an illogical conclusion: The Fed wants to expedite the crash in commodity related stocks and clear the market of weak balance sheets.

Morgan Stanely is out with a report, highlighting income inequality in developed nations. The frenched fried eat scoundrels of Portugal took the 1st place trophy, followed by a series of southern european knaves. Juat behind Spain was the good old US of A, fucking people hard since Reagan left office.

“Past generations of middle-class families, emerging from the post-WWII period, could aspire to improving living standards, with a reasonably sized house, a good education for their children” and dependable pensions, Morgan Stanley economists said in their report Tuesday. “In contrast, middle-class aspirations are now running up against the wall of job and retirement insecurity.”

At least the stock market is within an ear shot of all time highs, no?

The Federal Reserve has $29 billion in surplus reserves. The drug addled degenerates in Congress, instead of doing their job and balancing a budget, have their eyes fixed on the Fed’s money–like the greedy little bank robbers they are.

Lawmakers are trying to pass a $325 billion highway bill to fix America’s crumbling roads and bridges. And Congress wants part of the funds to come from the Fed’s emergency stash of money.

In fact, Congress wants to take the $29 billion from the Fed and close the account for good too.

The Fed created this “surplus account,” shortly after it began operating in 1914. The idea was that it would serve as a cushion to absorb any potential losses the Fed incurs.

However, many members of Congress believe that the Fed doesn’t need the money any more and should be put to better use.
“It is appropriate to liquidate [the Fed’s surplus] account to meet today’s realities,” Randy Neugebauer, a Republican Congressman from Texas, told the House earlier in November.

The House agreed, and overwhelmingly voted to include the Fed’s billions in the highway bill.

The Fed doesn’t want to look like Congress’ bank account.

“To the extent that they’re seen as a piggy bank, threatens them,” says David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

And last week, two Republicans proposed a bill that would require the Fed to operate its monetary policy based on a defined rule — something the Fed believes would hamper its ability to act during times of crises.

Fed officials say all of these actions, including Congress reaching into its piggy bank, jeopardizes the Fed’s independence from politics.

“Using a central bank as a source of revenue to cover the cost of a fiscal program is dangerous to its independence,” Fed Vice Chair Stanley Fischer said earlier in November.

So, let’s set the record straight. Our elected officials have all but ruined this countries balance sheet, amassing almost $20 trillion in debt and that number is growing daily. Now that they’ve exhausted all sources of capital, through fucked up tax hikes and surcharges on everything but soup cans, they want to dip their beaks into the Fed’s pot, like mafiosa.

Times are changing, lads. The dichotomy between a bankrupt and corrupt Federal government, coupled with rich corporate and Federal Reserve balance sheets is leading us to a point where the people with the guns, ultimately, take what they want–just like any decent banana republic worth its salt.

I do this every late year, and without fail, there are always monster turn arounds the following year in the mega-cap space. Large asset managers need mega-caps to thrive and will pile into these things at the first sign of strength.

The following stocks are the worst performing mega-cap stocks of 2015, as defined by market caps in excess of $50 billion.

Which one do you think will have a great 2016?

I sold out of my COST trading position and redeployed those assets into more FCX, SHAK, PAH and I started a new position in VRX.

There’s too much smart money in VRX for this to be a scam. The most likely scenario is, the big scam are the lies that are being purported by the media. If it was just Ackman in VRX, I’d consider the fact that he might be Ron Johnson wrong on VRX.

But there’s too many very capable and competent managers long the stock.

It goes higher.

I sold out of my trading position in COST, which was my largest position. I don’t have time for poisonous chicken salad.

Via CDC site:

Read the Advice to Consumers »
CDC, the U.S. Food and Drug Administration, the U.S. Department of Agriculture Food Safety and Inspection Service, and public health officials in several states are investigating an outbreak of Shiga toxin-producing Escherichia coli O157:H7 (STEC O157:H7) infections.

As of November 23, 2015, 19 people infected with the outbreak strain of STEC O157:H7 have been reported from 7 states.
The majority of illnesses have been reported from states in the western United States.

5 ill people have been hospitalized, and 2 have developed hemolytic uremic syndrome, a type of kidney failure. No deaths have been reported.

The epidemiologic evidence available at this time suggests that rotisserie chicken salad made and sold in Costco Wholesale stores in several states is a likely source of this outbreak.

14 (88%) of 16 people purchased or ate rotisserie chicken salad from Costco in the week before illness started.
The ongoing investigation has not identified what specific ingredient in the chicken salad is linked to illness.

On November 20, 2015, Costco reported to public health officials that the company had removed all remaining rotisserie chicken salad from all stores in the U.S. and stopped further production of the product until further notice.

Consumers who purchased rotisserie chicken salad from any Costco store in the United States on or before November 20, 2015, should not eat it and should throw it away.
Even if some of the rotisserie chicken salad has been eaten and no one has gotten sick, throw the rest of the product away.

This product has a typical shelf life of 3 days and is labeled “Chicken Salad made with Rotisserie Chicken” with item number 37719 on the label.

A picture of the product label is available on the Advice to Consumers page.

This investigation is ongoing. CDC and state and local public health partners are continuing laboratory surveillance through PulseNet to identify additional ill persons and to interview them.
November 24, 2015

The party is over. Just stay away from this stock. It’s 100% scam.

That’s what they call a ‘widow maker’ in my business. Do yourselves a favor and stick to market caps greater than a billion, just as a rule of thumb. You’ll save yourself a lot of heartache.

First off, “BofA/Merrill” is a really stupid name. Why don’t you pick one: Bank of America or Merrill? Second, when was the last time the market has gently glided higher for 16 years? Becaue that’s what BofA/Merrill is suggesting now, with their harebrained research note.

“Based on current valuations, a regression analysis suggests compounded annual returns of 8 percent over the next 10 years with a 90 percent confidence interval of 4-12 percent. While this is below the average returns of 10 percent over the last 50 years, asset allocation is a zero-sum game. Against a backdrop of slow growth and shrinking liquidity, 8 percent is compelling in our view. With a 2 percent dividend yield, we think the S&P 500 will reach 3500 over the next 10 years, implying annual price returns of 6 percent per year.”

Their regression analysis suggests, with 90% confidence, that you’re gonna be bored to pieces with this market, all the way out to the year 2025.