Not Done Yet

Overseas markets have continued to melt down unabated for weeks now. The Yen carry trade is dead and anyone caught in it has been trapped. And now numbers coming out of Europe continue to reinforce sustained recession with no exit strategy in sight.

The million barrel oil drawdown was confirmed by the Energy Department, which has so far kept crude prices elevated. But the summer demand will continue to slump shortly, reversing the pricing and exacerbating melancholy market sentiment into depression.

Oil futures are solidly in backwardation. Demand is slacking, as indicated by the ISM numbers and European country statistics. Throw on top of it all the energy revolution taking place in North America, and this summer sometime we’ll see a hemorrhage.

For the moment, I’m taking it two ways, as my long sell off and my “hedges” lose me money every single day. But EUO and SCO will prevail, into a summer selloff. I’ve been here before.

It turns out the IMF, despite assuring depositors that it has never lost money placed with the institution, decided to sink what could be unrecoverable billions into an obviously overindebted country, breaking many of their own rules along the way, in the largest bailout of its kind ever.

The first red flag might have been that they were cutting billion dollar checks to a woman holding a Louis Vuitton…

Per the course, some dipshit(s) is loading up on oil going into the teeth of the summer slowdown, keeping steady pressure on the contracts. Who exactly it is that thinks buying crude oil while inventories are undergoing surprise builds and PMI is missing expectations, I cannot say. All I know is that this is cliché.

The market is rolling over and some genius is trying to strip down my shield and use it for a wake board on a lake somewhere.

The euro is also hitting pressure around that 1.3 area. Look, Europe is inevitably at the heart of this slowdown. Their unemployment and economy issues are what is derailing China. Japan is front and center, but Europe is always lurking in the background.

If we slow down, there is zero chance that the euro can hold this strength.

On the positive side, CLP shook off analyst downgrades and lawyer harassment and rallied more today; mostly because it’s a good deal.

I don’t know what it is about the bar exam that turns people into sociopaths – I don’t want to know. The truth is, I actually hope these law firms piling on fiduciary inquiries succeed in getting MAA to pump up the offer, just to seal the deal. But when it’s all said and done, the lawyers pushing this harassment of CLP’s management should seek professional help.

You don’t need to a shop a deal that involves a merger partner paying you to cut your price/FFO by ~25% ~15-18%…

Fucking lawyers…

My God yes…get me more money…

SAN DIEGO–(BUSINESS WIRE)–

Shareholder Rights Law Firm Johnson & Weaver, LLP is investigating whether members of the board of directors of Colonial Properties Trust (CLP) breached their fiduciary duties in connection with the proposed acquisition by Mid-America Apartment Communities Inc. (MAA).

On June 3, 2013, Mid-America announced that it had entered into a definitive merger agreement to acquire Colonial Properties. Colonial Properties shareholders will receive 0.36 of a Mid-America share for each share of Colonial Properties owned. Based upon Friday’s closing price this represents $24.47 per share.

The investigation will determine whether the board of directors breached their fiduciary duties to stockholders by failing to satisfactorily shop the company before entering into this agreement. Jim Baker, lead analyst for Johnson & Weaver, stated that, “Mid-America’s offer appears to be inadequate and not in the best interest of Colonial Properties shareholders.” Baker noted that this real estate investment trust (REIT) has been steadily increasing dividends to shareholders as a result of its superior performance. Additionally, many analysts have a price target greater than the buyout price.

I grabbed more CLP for $23.32. The merger offer is good for at least another 4% of upside, in MAA stock. Of course, the deal is more volatile than, say, the BXG buyout (which was all cash) so maybe I get burned here. But I love the multifamily space and CLP’s apartment communities are golden.

As for whether or not I want to stick around and be a part of the new company, I’ll make that call later as things progress along.