The market may be surging again, but that will hardly comfort Bill Ackman who later today is expected to report later today that his hedge fund remains roughly 20% YTD, or perhaps even worse following news from the NY Post, that his most hated stock ever, Herbalife, has reached "an agreement in principle with the Federal Trade Commission to settle a years-long probe into whether it was a pyramid scheme", as a result of which the stock is soaring.
Last Friday we first reported on two surprising developments: one was a record accumulation of crude tankers just off the coast of Singapore in the Straits of Malacca, awaiting higher oil prices to offload their precious cargo; the second was that as a result of previously profitable contango trades now flattening and making storage no longer profitable, oil shippers are now forced to ask for bank loans to fund offshore storage costs. Over the weekend none other than Morgan Stanley noticed precisely these two developments.
Cash is a proxy for the freedom to maintain some privacy in an era of Big Brother repression, surveillance and the suppression of dissent. Ultimately, the war on cash is all about increasing control by eliminating privacy and the freedom to abandon the debt-serf rat-race.
"The worst fear I have is that Mrs. Hillary Clinton will become president. That is my worst fear. I would vote for anyone in the world before I would choose Hillary Clinton. She’s dishonest, she’s a liar and she has deceived people..."
Another week, and another quiet exodus by the "smart money" clients of Bank of America (hedge funds, institutionals and private money), who collective sold $218 million in stocks, the 17th consecutive week of selling completely oblivious of a market that "wants to go higher" according to Bob Pisani, and as BofA notes, "continuing the longest uninterrupted selling streak in our data history (since '08)."
There was a lot of headscratching in today's New Home Sales reported released moments ago by the Census Bureau, according to which there was a whopping 619K new home sold in April, up from the upward revised 531K (was 511K), and smashing expectations of a 523K print, driven by a surge in Northeast home sales which soared unexpectedly from 36K in March to 55K in April, a completely unexplained 53% spike.
Having spiked mysteriously to 6 year highs in March (from 4 year lows in Feb), Richmond Fed's manufacturing survey crashed back into contraction in May (printing -1 against =14 prior and +8 expectations). Weakness was broad-based across the entire set of subcomponents with New Orders plunging, shipments crashing, employees and workweek tumbling, and worse still future employment and capex expectations dropped precipitously. The drop in the last 2 months is the largest in the 23 year history of the survey.
"In our retirement account here at TGL we have simplified our position taking in the equity market: we have only a position in derivatives on the short side, and although it is not a material position it is one-sided. We’ve cast our long positions aside. We’ve simplified; we’ve gotten smaller; but we are bearishly inclined, and we are intent upon adding to those bearishly inclined positions..."
"Hedge fund portfolio density rose to record levels in March, exceeding even the Financial Crisis highs. Hedge fund returns continue to grow more dependent on the performance of a few key stocks. The typical hedge fund has 68% of its long-equity assets invested in its 10 largest positions."
Dow futures are up 130 points since Europe opened helped by a drop in JPY and EUR and a buying spike in crude oil once again...
For the bank with the tens of trillions in derivatives, being seen as an increasingly more distressed counterparty was not good news and explains why the CEO took the unexpected step of having to defend his firm following the downgrade. "We are very disappointed," Cryan said in an interview on the sidelines of the Institute of International Finance’s conference in Madrid. "We have enough capital to repay all of our debt four-times over."