PANIC IS IN THE AIR

Some analyst issued a report on Apple today, saying that Apple cut back on its Asian component orders by 10%, due to lackluster Apple 6s sales. Hence, the stock is dropping and everyone is freaking out like it’s the end of the world.

So?

We played out this movie role before, scared investor running in the woods, tripping over Apple cores, trying to escape the boogeyman.

Pardon me if I’m not overly concerned about Apple 6s sales, ahead of what is going to be a huge iPhone 7 rollout.

Moving on.

Stocks are off a bit; but the current is a lot rougher than -30 suggests. Once again, Wall Street is throwing a temper tantrum over the prospect of higher interest rates. Weak balance sheet companies will be affected. It’s not so much the 25 bps raise that has people freaking out. It’s the fact that, once the Fed starts raising, they may not stop. Rates could go back to 1-1.5% over the next year, which would definitely hurt some fucked up companies who are dependent on cheap credit to stay alive.

Short sellers have total control of this market. Look at MNK and VRX bending to the will of Citron, a small website with 28k followers on Twitter. It’s hilarious that they’re breaking numerous hedge funds, in a dark macabre way, over very specious allegations.

“Look at how much they charge for their drugs. Isn’t that nuts?” That’s, in nutshell, Citron’s case against MNK.

Wayfair, ticker W, posted much better than expected results, guided way up, and the stock is screaming lower.

There’s no reason to get worked up about this sordid market action. We are going through a squall, after many years of uninterrupted upside. Eventually, this will pass and speculation will return. For now, panic is in the air.

What can go wrong? Corporate balance sheets are laden with twice the amount of debt since the pre-crisis levels of 2007. In retrospect, that worked out well for the market, so I imagine this debt bubble will too.

“Companies in the United States have taken advantage of low interest rates to issue record levels of debt over the past few years to fund buybacks and M&A,” Goldman analysts led by Robert Boroujerdi wrote in the note. “This has driven the total amount of debt on balance sheets to more than double pre-crisis levels.”

I can tell you first hand, since the housing bubble burst and the market recovered, investment banks’ favorite go to product has been oil and gas debt instruments. If, by chance, we are to be blessed with a tipping point event, one that ravages and consumes the entire market and swallows it whole, odds are it will begin in the asinine oil sector.

“The Fly” isn’t big on 2nd chances. I did tell you I’d find and kill anyone who didn’t attend the 2nd annual iBC conference; now you get a second chance to avoid such a fate.

The Option Addict, AKA Jeff Kohler, will be hosting a special 5 day online version, starting next week. Before your life gets downgraded even further, BEHOLD and sign up now.

NOTE: Members of any iBC service will get 25% off the price listed.

WTF is this shit?

Dennis took to the airwaves today of offer his expertise on gold. He told us it basically sucked, really, really bad, over every time frame for 5 years. He furthered that it should continue to get hammered into clown dust because the dollar was in the 4th inning of a 9 inning ballgame (what the fuck does that even mean? Is there like 50 mins left in the game?).

Then he mixed it up a bit and straight mind fucked all watchers of the teevee by suggesting gold had been a great buy in euro terms or even better in yen. Does this motherfucker know he’s on U.S. tele?

He concluded that everyone should own a little gold, in all portfolios, effectively defecating on all of his previous comments regarding gold.

Chinese CPI just came out and it was below expectations. For an economy allegedly growing at 6.9%, to have a CPI below 1.5% sounds freaking ridiculous.

I bet if real accountants looked into China, they’d find the GDP growth to be more in line with America, around 2%.

The consumer-price index rose 1.3 percent in October from a year earlier, according to the National Bureau of Statistics. That compared with a 1.5 percent median estimate in a Bloomberg survey and 1.6 percent in September. The producer-price index fell 5.9 percent, extending its streak of negative readings to 44 months.

The lingering deflation risks, along with declines in trade, flag the need for additional stimulus as inflation remains about half the government’s target pace. The People’s Bank of China — which has cut interest rates six times in the past year — is seeking to stabilize the economy without fueling a renewed surge in debt.

“The risk of deflation has accentuated,” said Liu Li-Gang, the chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “This requires the PBOC to engage in more aggressive policy easing.”

Food prices rose 1.9 percent from a year earlier, from 2.7 percent in September. Non food prices climbed 0.9 percent. Prices of consumer goods increased 1 percent, while services increased 1.9 percent, the data showed.

The inflation reading follows a tepid trade report that suggested the world’s second-biggest economy isn’t likely to get a near-term boost from global demand.

Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, while weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8 percent, leaving a record trade surplus of $61.6 billion.

Muted inflation gives the PBOC additional room for further easing. The central bank will maintain stable monetary policy and create a neutral monetary and financial environment for economic restructuring, according to the third-quarter Monetary Policy Implementation Report it released Friday. The PBOC said the economy faces downward pressure and inflation is likely to be low.

China’s economy grew 6.9 percent in the three months through September from a year earlier, the slowest quarterly increase since the start of 2009. For the full year, growth is set to be the slowest since 1990.

Top leaders have signaled that they won’t tolerate a sharp slowdown in coming years. President Xi Jinping said last week that average annual growth should be no less than 6.5 percent in the next five years to realize the nation’s goal to double 2010 GDP and per capita income by 2020.

“Declining prices, a heavy debt burden and still high interest rates will likely weigh on corporate balance sheets, undermining their debt servicing capacity and investment demand, and worsening banks’ asset quality,” UBS Group AG analysts led by Wang Tao wrote in a report ahead of the data. “The negative feedback loop needs to be broken with more serious restructuring, helped by further monetary easing.”

Pair the woefully weak Chinese economy with ours and one has to wonder if the Fed is purposely trying to cause an equity rout. I can see no other rational explanation for hiking interest rates at a time devoid of any semblance of inflation.

Gundlach is like the 3x inverse Rick Santelli, giving mad shade to Grandma Yellen’s naive Fed. The clam-fuckers at the Fed are either the stupidest motherfuckers to have ever walked the planet. Or (and this is my working theory), they are purposely trying to bankrupt CHK.

“I have a hard time believing a Fed tightening will help the economy,” Gundlach, whose Los Angeles-based company manages about $80 billion, said Monday on a conference call with investors. “I think volatility will increase and the economy will weaken.”

Do any of you people actually believe Fed tightening will help the economy? Being honest with yourselves, you know damned well it’s going to expedite liquidations in the 100 billion plus distressed oil and gas debt and ruin so many people who invest in stocks; this shit is going to get comical–like 2008 funny.

One of my partners on the site hates when I cuss and rant on the headline title, as he likes to show friends and family the site. iBankCoin isn’t a family site. This isn’t Disneyworld. Speaking of which, one of my favorite attractions at Disney is the Tower of Terror, broken elevator pin action for the entire family to enjoy.

My sister is absolutely mortified of elevators. She actually opts out and climbs up stairs, like an ape. I’d love to get her into that Tower of Terror ride, so that I could video record her terror.

“The Fly” isn’t scared of anything, not even ruinous stock prices. I’m down 1.3% today, led by the fuckheads at COST. Retail is truly shit.

Do you what’s not shit?

Biotech.

Who could’ve figured that out, eh? The market rips through the fucking floor boards and the best performing sector, aside from gold, is biotech. If you tried to create a more diabolical tape, you could not. This is the perfect trap.

Pray pardon, keep sending money into your 401k plans, so that your local Blackrock fund managers can spread that shit, like creamed cheese, across the capital landscape.

LISTEN TO ME. The Option Addict is holding a 5 day clinic for those who missed out on the iBankCoin Conference. Actually, conference attendees are more than welcomed to join too, since lots of new material will be touched upon, as the markets have been making some big moves since then. The iBC Online conference will take place from November 16th to the 20th, each session lasting anywhere from 60-90 mins, all live.

ACT NOW

NOTE: Members of any iBC service will receive a 25% rebate.

Filthy, Asian, bugs are to blame.

Just when you thought it was safe to head on over to the store for a box of orange’d juice, all of the fucking groves get destroyed and prices spike.

When will the inflation subside?

“The market is scrambling to find a new equilibrium price to reflect what’s happening on the ground,” Joe Nikruto, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “You may see speculators entering this market in anticipation that prices are going to go much higher.”

Futures have soared 35 percent from a three-year low of $1.0345 a pound on Sept. 29 as investors weighed slowed demand against declining output. Brazil is the world’s top orange-juice producer, followed by Florida.

No Solution

There’s no solution the citrus disease, which has caused billions of dollars in losses across Florida since 2005. By some estimates, “the industry needs to put more than 20 million trees in the ground over the next 10 years to support existing infrastructure and get production back to where it was” before greening, Michael W. Sparks, chief executive officer of Florida Citrus Mutual, the state’s biggest producer group, said in an e-mail on Friday.

The most “pessimistic” scenario in a recent study by the Florida Department of Citrus has the crop falling to 27 million boxes by 2026. A box weighs 90 pounds or 41 kilograms.

What else could be added? NO SOLUTION. Kiss your orange sliced dessert, at your local chinese restaurant, goodbye.

This is lost puppy, starving in the woods, sad.

Year-end compensation will be lower by 5 percent to 10 percent broadly throughout the financial services industry, the report said on Monday, with fixed-income traders experiencing an even larger drop as bond trading revenue continues to be weak.
Payouts to investment bankers who advise companies on mergers could rise 15 percent to 20 percent as the global market for dealmaking remains strong.

Compensation for debt traders, meanwhile, could fall as much as 20 percent from a year ago as doubts about Federal Reserve interest rate policy and China’s economic slowdown have negatively affected banks’ bottom lines.

Morgan Stanley said last quarter that bond trading revenue had fallen 42 percent, while Goldman Sachs Group Inc reported a 33 percent decline.

Investment bankers who help companies underwrite initial public offerings may experience a pay decline of 5 percent to 15 percent. Many companies have decided to stay private for longer amid choppy markets.

Banks are setting aside less money for pay. Goldman said it had earmarked 16 percent less money for compensation in the third quarter than it had for the same period last year. JPMorgan Chase & Co also said it had set aside 13 percent less money for compensation.

One could argue this is Fred Wilson’s fault too. Had Fred and his San Fransican friends not been so damn greedy, hoarding all of the cool, kick ass, tech companies in private holdings, our beloved Wall Street bankers could be making enough money to treat Tiny Tim and maybe even buy a nice turkey for the holidays.

Instead, Tiny “fucking” Tim is hobbling about the room, on the verge of death. Bankers are sad, without cocaine. All the while, Fred wilson and his San Franciscan friends get fatter (gluten free range, organically) and richer.

What is this world coming to?

MNK is now down 17% after Citron fucking Tweeted that they had more downside than VRX, at these levels.

Pray tell, how does one have more downside than “the next Enron?”

It must be good to be a Citron gangster.

Citron’s tweet regarding MNK has erased more than $1.5 bill in market capitaliation in 5 minutes, now off by 22%.