Dear Martin Shkreli: This Is How You Hike Drug Prices

"In the Twitter-storm furor over Turing’s recent one-drug price gouge attempt, the media has overlooked the reality that Martin Shkreli was created by the system. Shkreli is merely a rogue trying to play the gambit that Valeant has perfected." And there you have it: boost the prices of dozens of drugs in the span of 1-3 years anywhere between 100% and 800% and nobody notices (thank you insurance companies). But hike the price of one drug by 5,500% and suddenly all of America thinks you are satan incarnate.

Glencore Implodes: Stock Plunges Most Ever, CDS Blow Out To Record Up On Equity Wipeout Fears

Update: And there it is: GLENCORE DEBT INSURANCE COSTS SURGE TO RECORD HIGH; 5-YR CREDIT DEFAULT SWAPS RISE 207BASIS POINTS FROM FRIDAY'S CLOSE TO 757 BASIS POINTS

Those who listened to our reco to buy Glencore CDS at 170 bps in March 2014 can take the rest of the year off. As of this moment, GLEN Credit Default Swap were pushing on 600 bps, 4 times wider, and on pace to take out the 2011 liquidity crunch highs. After that, it's smooth sailing to all time wides and the start of a self-fulfilling prophecy which leads to the Companys's IG downgrade and the collapse of trillions in derivative notionals as what may be the trading desk of the biggest commodity counterparty quietly goes out of business.

Why Did Ted Cruz's SuperPAC Give Carly Fiorina's SuperPAC $500,000?

On June 18, a donation of $500,000 was made to the Fiorina-supporting PAC by Keep The Promise I. Not only is Keep The Promise I a generous contributor who believes in Fiorina’s presidential aspirations enough to fork over half a million dollars — it also happens to be a Super PAC set up to fund a political rival of Fiorina’s and fellow presidential candidate, Senator Ted Cruz.

Liquid Alts - The World's Most Popular Hedge Fund Strategy Explained

Today's most popular hedge fund strategy among institutional investors globally is "Alternative Global Macro Funds". Also known as a “go anywhere” investment style, active managers employ opportunistic trading tactics across asset classes, financial instruments, and geographic regions. Like many liquid alts, global macro funds grew rapidly following the financial crisis as investors looked for strategies that could diversify their portfolios in the midst of volatility in the global marketplace and historically high sector correlations against the S&P 500, thereby improving their risk-return profiles. Ultimately, success in this classification resides in selecting the right active manager given the strategy’s wide dispersion of returns.

Bernanke & Yellen Have Engineered A Financial Markets Neutron Star

Absent some entirely magical economic developments, Janet Yellen looks set to be an unlucky Fed chairman. There is a growing risk that the fabric of the financial system may start to unravel during her tenure. Today’s investors are not exactly a lucky generation. Assuming they’ve survived two precipitous declines in stock markets in the course of a decade, they’re now faced with overpriced stocks, overpriced bonds, overpriced everything.

Goldman Warns VIX Is Priced For Extreme Moves Ahead Of Payrolls

VIX is "searching for a new home" according to Goldman Sachs as the current elevated level of implied risk lies at the high side (around 24) of the current business cycle (~18) and recession-esque volatility (~26) range. Current options prices imply a 7% chance of a 10% crash in the next month and uncertainty is running twice as high ahead of this week's jobs data than on a normal payrolls week...

Monetary Policy "Psy-Ops" - Why Central Bankers Should Be Seen And Not Heard

The Fed’s policy of forward guidance and radical transparency is not working. It turns out that letting the market peer over its shoulder as it makes monetary policy sausage is, in some ways, worse than the opaque process that existed prior to the arrival of Bernanke and Yellen. It pulls back the curtain and shows the human, error prone side of the Fed. Every time the Fed’s dots move, it is an admission of failure and undermines the very confidence it was trying to inspire.

And The Market Breaks...

Stocks are down hard, JPY momo is not working, nor is VIX... time to break something...

  • *NYSE ARCA SUSPENDS ROUTING TO CHICAGO STOCK EXCHANGE
  • *NYSE ARCA HAS DECLARED SELF-HELP AGAINST CHICAGO STOCK EXCHANGE

Confusion-nado - 2015 Rate-Hike Odds Plunge To Record Lows After Fed's Evans Dovish Comments

We have had "bad cop" Dudley and so now "good cop" Evans unleashes more uncertainty, confusion, and farce:

*EVANS: BEST APPROACH IS FOR LATER LIFTOFF, GRADUAL TIGHTENING
*EVANS SAYS `EXTRA-PATIENT APPROACH' TO TIGHTENING IS WARRANTED

The reaction was very clear, Fed Funds Futures dipped to record lows for October (16%) and December (41%). And worse still, "dovishness" did nothing for stocks at all...

The Next Looming "Commodity" Failure: Social Media

The social media space is beginning to make one wonder if they’re looking at an iron ore chart, or bulk shipper, rather than “the hottest space it all tech.” i.e., everything social. And it’s just the beginning in my opinion. Sooner or later Wall Street is going to come knocking for either its promise of profits. Or, its money back. And when that starts (which I believe has already begun) the mad-rush to cash-in what ever value a share might have that day will be assailed with stunning speed... much like the commodity space where stalwarts of an entire sector can find themselves struggling for solvency in mere months.

Ackman Loses $700 Million Instantly After Democrats Demand Subpoena

Yet another nail in the Biotech Bubble's coffin as Bloomberg reports House Democrats demand a subpoena for Valeant over "massive price increases." The stock is down 12 % on the news extending the collapse of the last few days and weighing very heavily on the broad Biotech index. Very bad news for Bill Ackman and his 20 million shares...

The Echo Bubble In Housing Is About To Pop

The Federal Reserve-induced Echo Housing Bubble is finally starting to roll over, and the bubble's pop won't be pretty. Why is the bubble finally popping now? All the factors that inflated the Echo Housing bubble are running dry.

Currency Warfare: Ruble Plunges As Putin Speech Ends

We are sure it's just a coincidence but seconds after Vladimir Putin concluded his speech at The UN calling for a broad anti-terrorist coalition, the Russian Ruble was sold aggressively (after a relatively news-less and quiet day in the currency)...

Glencore Default Risk Surges Above 50%

Glencore is in total free-fall across all markets today. Most worrying for systemic risk concerns is the rush into credit protection that has occurred, as counterparties attempt to hedge their exposures. Forthe first time since 2009, Glencore CDS are being quoted with upfront pricing (something that happens as firms become seriously distressed). Based on the latest data, it costs 875bps per year (or 14% upfront) to buy protection against a Glencore default (which implies - given standard recoveries - a 54% chance of default).

Obama: "America Has Few Economic Interests In Ukraine"... And This Very Big One

As part of his UN speech seeking to restore a crumbling Pax Americana, president Obama, eager to cover up US involvement in the Ukraine presidential coup of early 2014 (who can forget Victoria Nuland "strategy" interception in which she laid out the post-coup lay of the land, while saying to "fuck the EU"), just said that "America has few economic interest in Ukraine." Few, perhaps, but quite substantial.