Archive - Oct 30, 2015

Having lost an estimated $1.7 billion in his Valeant 'investment' Bill Ackman's almost-four-hour press conference this morning has done nothing to save the stock after yesterday's endless-whammies.  Having bounced up near $110 at the start of the call, VRX is now trading back near the after-hours lows last night, back under $100, after Citron Research warned Valeant is "dirtier than anyone has reported."

Investors are aware that the market is manipulated... and it doesn’t seem to worry them. They don’t fight the Fed; they sit down at the table with it. They play the game. And so far, they have done well. But now... She will signal that, soon, the central bank will begin the long return to “normalcy.” Don’t believe it. The entire system depends on abnormality.

It appears President Obama, not wanting to provide every alternative-media site with a perfect 'compare and contrast' from September 2014's "putting U.S. troops on the ground would be a profound mistake,"  has handed the responsibility for announcing American "boots on the ground" in Syria to his Press Secretary. "If you like your boots on the ground, well, you can keep them.. in Syria."

10-year Puerto Rico general obligation bond yields spiked to 12.3% - the highest on record - as the island’s Government Development Bank's $354 million of principal and interest due on December 1st looms. Puerto Rico is now 450bps 'riskier' than Greece, which means Treasury Secretary Jack Lew was wrong again in not taking the German FinMin's offer in July to swap Puerto Rico for Greece...

The bearish thesis for gold rests on four key assumptions in the process of being disproven. Recent gold skepticism has generally arisen from some combination of expectations for i) protracted U.S. dollar strength, ii) significant Fed tightening, iii) escape velocity U.S. economic performance and iv) further increases in U.S. equities. Since the end of the first quarter, the logic supporting each of these projections has dissipated significantly.

Buy high, sell low. The definition of stupid.

For America to come home and untangle itself from the Imperial Project, it will have to do more than not meddle in everyone else's affairs; it will have to learn to live within its means--what it earns from producing goods and services, not what it skims from global financialization.

The US Federal Reserve is obsessed with market reactions to its policies. Because of this, anytime the Fed plans to announce a major change in policy, it preps the markets via numerous leaks and hints… oftentimes for months in advance.

Even though Chevron said in July that its cost-cutting initiatives would be "completed by mid-November of 2015" it decided to surprise everyone moments ago when on its earnings call it announced it would not only slash its capex by another 25%, but will shortly distribute another 7,000 pink slips. The reason: another terrible quarter in which the $2 billion in earnings were a 73% plunge from a year earlier.

Gold is up 3.1% in October and had even larger gains in other currencies. Entering gold’s “seasonal sweet spot” in November, December, January and February.

"A disinflationary mindset is taking hold," warns UMich's Curtin explaining, "Consumers are demanding discounts to spend, and are disappointed... have lower aspirations to spend."

Looks right!!?

"No brainer"? Seems to us like there’s only one way for things to go right and lots of ways for things to go wrong.

"Putin is winging it..."