Archive - Oct 13, 2015

After losing 7% in September, and down 20% for 2015 as of Oct. 1, the question is will Andy Hall be the only hedge fund manager with the distinction to have blown up not once but twice in one year, on the very same bet?

So what's left in the toolbag of central banks and states to stimulate recessionary economies if QE has been discredited? The answer: Helicopter Money.

When looking at JNJ's EPS line, things were not nearly as bad, because despite a 7% slide in revenues and a whopping 40% collapse in pretax net income, somehow JNJ reported Q3 non-GAAP EPS of a solid $1.49, actually beating consensus of $1.45, and only 7% lower than a year ago. Hardly terrible... until one looks at the detail and finds the "oldest accounting gimmick in the book": adjusting the tax rate.

"Sell the rumor, buy the news" appears to be the meme for now as TWTR delivers on the chatter:

*TWITTER CUTTING UP TO 8% OF JOBS, UP TO 336 JOBS
*TWTR SEES 3Q ADJ EBITDA AT/ABOVE TOP END $110-$115M,EST $116.7M

So drastic job cuts, lowered revenue and EBITDA guidance, and "tough but necessary" decisions - TWTR up 5% in the pre-market.

As Asia opened last night, gold and silver came under pressure (ahead of China's biggest Yuan strengthening since November 2014). As US re-awakens from Columbus Day vacation, it appears demand is back (and in heavy volume) for precious metals...

"If the Russian army kills the people of Syria, then kill their people. And if they kill our soldiers, then kill their soldiers. An eye for an eye. The war in Syria will make the Russians forget the horrors that they found in Afghanistan. They will be shattered, with God's permission, on Syria's doorstep."

• Playboy to Drop Nudity as Internet Fills Demand (NYT)
• Stock futures fall on weak China trade data (Reuters)
• Any Hall is down 20% YTD (WSJ)
• Global Stocks Slide With Metals After Chinese Imports Tumble (BBG)
• Clinton's tack to the left to be on display in Democratic debate (Reuters)
• Switzerland Said to Impose 5% Leverage Ratio on Big Banks (BBG)
• AB InBev, SABMiller brew up $100 billion deal (Reuters)

With JNJ about to announce - what are almost certain to be very bad - earnings in just over an hour, the company decided it was prudent to set the mood by preannouncing, less than an hour before earnings, good days are back again and that the company will do all in its power to not only increase the buyback pardon equity-linked compensation of CEO Alex Gorsky, but to reward shareholders for sticking with a company that hasn't announced a major buyback plan in recent months.

Marc Faber is an eloquent advocate of owning physical gold which he describes as being a way to become “your own central bank.”  He believes an allocation to physical gold will serve as vital financial insurance and that Singapore is the safest place to own gold in the world today.

For the past two weeks, the thinking probably went that if only the biggest short squeeze in history and the most "whiplashy" move since 2009 sends stocks high enough, the global economy will forget it is grinding toward recession with each passing day (and that the Fed are just looking for a 2-handle on the S&P and a 1-handle on the VIX before resuming with the rate hike rhetoric). Unfortunately, that's not how it worked out, and overnight we got abysmal economic data first from China, whose imports imploded, then the UK, which posted its first deflation CPI print since April, and finally from Germany, where the ZEW expectation surve tumbled from 12.1 to barely positive, printing at just 1.9 far below the 6.5 expected.